Dollar is back under some mild pressure in early US session after mixed economic data. Inflation data missed expectations. Headline PCE was unchanged at 2.0% yoy in October versus consensus of 2.1%. Core PCE even slowed to 1.8% yoy, down from 2.0% yoy and missed consensus of 1.9% yoy. Though, personal income rose 0.5% while spending rose 0.6%. Both were above expectations.

Initial jobless claims rose 10k to 234k in the week ended November 24, above expectation of 221k. Four-week moving average of initial claims rose 4.75k to 223.25k. Continuing claims rose 50k to 1.71M in the week ended November 17. Four-week moving average of continuing claims rose 19.75k to 1.668M.

ISM non-manufacturing composite rose to 58.6 in May, up from 56.8 and beat expectation of 57.4. Business activity index rose 2.2 to 61.3. New orders rose 0.5 to 60.5. Employment index rose 0.5 to 54.1.

Dollar responses positive to the upside surprise. In particular USD/CAD finally takes out 1.3046 resistance to resume recent rally.

ISM noted in the release that “the majority of respondents are optimistic about business conditions and the overall economy.” But “there continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.”

Some quotes from respondents:

“Material prices have been difficult to predict this year, and suppliers have struggled to hold prices for any extended period on quotes, specifically on lumber and lumber-related products. The instability has proven frustrating, but a larger problem is that we are starting to see longer lead times in many of the same areas that could start impacting timelines if they continue to get worse as we get into the main building season.” (Construction)

“The trade discussions with NAFTA, Korea and the European Union will have critical impacts on our spend relating to steel products. Also, the potential of the U.S. pulling out of the Iran nuclear deal could push crude prices higher.” (Mining)

“Oil price stabilization in the (US) $60 to $70 per barrel [is] having a positive impact on hiring, both contract labor and direct employees, in the oil and gas industry and supporting industries.” (Professional, Scientific & Technical Services)

Full release here.

ISM manufacturing index dropped to 59.8 in September, down from 61.3 and missed expectation of 60.0. Price paid index dropped to 66.9, down from 72.1 and missed expectation of 0.8. Employment component, though rose 0.3 to 58.8.

ISM noted in the release that:

• Demand remains strong, consumption improved, inputs improved
• But continued supply chain inefficiencies led to an increased consumption of inventory and a slight expansion of imports,
• Export orders expanded, but four major industries are no longer contributing
• Price pressure continues, but the index softened for the fourth straight month
• Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations,

Full release here.