Also called: ism manufacturing, ism services, ism pmi
The US version of PMI — manufacturing and services indices published by the Institute for Supply Management.
ISM is the original US business survey, published by the Institute for Supply Management. It comes in two versions: ISM Manufacturing PMI (released first business day of the month) and ISM Services PMI (released a few days later). Both use the same 50-line concept as global PMI surveys — above 50 = expansion, below 50 = contraction.
ISM is one of the most-watched US data releases. The Fed reads it. Bond traders read it. Equity traders read it. A surprise ISM Manufacturing or Services number can move EUR/USD 50+ pips in seconds.
The ISM also publishes sub-components: New Orders (forward-looking demand), Employment (a preview of NFP a few days later), and Prices Paid (inflation pressure at the wholesale level). Pros parse all three for hints about what's coming.
The Jul 2024 ISM Manufacturing print of 46.8 (much weaker than expected) triggered a sharp dollar selloff and pre-positioned the market for the recession-fear-driven NFP miss two days later that sent the yen surging.
Frequently asked about ism (institute for supply management)
What is an ism (institute for supply management) in trading?+
The US version of PMI — manufacturing and services indices published by the Institute for Supply Management.
When will I see ism (institute for supply management) used in real trading?+
First and third business days of every month. ISM Manufacturing first, ISM Services second.
What is the most common mistake traders make with ism (institute for supply management)?+
Treating ISM and PMI as different indicators. They're functionally the same concept — both measure expansion vs contraction in the same way. The difference is just the publishing organization.
What do experienced traders know about ism (institute for supply management) that beginners don't?+
Watch the ISM Employment sub-index in the days before NFP. If employment is below 50 in ISM Manufacturing AND ISM Services, expect a weak NFP. The two indicators are tightly correlated.
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