Measures of activity in the US manufacturing and services sectors unexpectedly rose in January, as price pressures eased and demand strengthened.
The S&P Global manufacturing PMI flash index jumped to a reading of 50.3 from 47.9 in December, surpassing economist expectations for a flat reading. That marked the highest reading since October 2022 as operating conditions improved and inflation pressures cooled. But manufacturers still reported a drop in production.
The services index jumped to a reading of 52.9 from 51.4 for its highest level since June last year. Economists expected a slight decrease.
The stronger readings, all things equal, could help tame expectations that the Federal Reserve will soon start cutting rates to support the economy. Accordingly, yields on US government bonds bounced from session lows, with that on the 2-year Treasury note trading flat at 4.35 per cent in mid-morning trading on Wednesday.