U.S. manufacturing PMI surges to 13-month high in Nov, fuels expectations of faster Fed tightening in 2017

The manufacturing sector of the United States remained upbeat during the month of November, jumping to 13-month high during the period, fueling expectations for a faster interest rate hike by the Federal reserve in 2017.

The flash Markit US PMI manufacturing index strengthened to 53.9 for November from 53.4 the previous month. The figure was higher than the consensus forecast of 53.4 and also the highest reading for 13 months. Production increased for the sixth consecutive month and the November reading was the strongest since March 2015.

Also, new orders grew at the fastest pace in 13 months, with major inputs coming from the domestic sector. There was a further increase in unfulfilled orders at the fastest pace since July as capacity pressures had a significant impact.

In addition, cost pressures remained relatively subdued with a slower rate of input prices than seen during the previous month and well below the long-run survey average. However, the subdued nature of price increases and signs of a negative impact from dollar strength will inevitably create some caution surrounding the outlook, especially as the Fed remains sensitive to export trends.

The US dollar index traded firmer 0.06 percent at 101.77, while at 6:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 27.40 (lower than the +75 benchmark for bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

Meanwhile, the benchmark 10-year bond yields rose nearly 5 basis points to 2.35 percent, highest in 11 months.