US Manufacturing Roars Back: ISM PMI Hits 52.6, Shattering Estimates

Market snapshot: The US manufacturing sector entered expansion territory for the first time in 12 months, posting a verified PMI of 52.6 in January 2026. This significant beat against the 48.5 estimate signals robust economic resilience, potentially delaying Fed rate cuts while strengthening the Dollar Index (DXY).

Summary: US ISM Manufacturing PMI surged to 52.6 (vs 48.5 est), signaling the first expansion in a year. New Orders jumped to 57.1. Stronger US growth supports Indian export demand but may keep global yields and the USD elevated.

Key Takeaways

• Expansion Confirmed: PMI > 50 (52.6) for the first time since early 2025.
• Demand Surge: New Orders index spiked to 57.1, indicating strong forward momentum.
• Market Impact: Reduced probability of immediate Fed rate cuts; DXY strength likely to pressure emerging market currencies including INR.

SAHI Perspective

A resurgent US manufacturing base is a double-edged sword for India. While it secures demand for Indian IT and auto-component exports, the accompanying rise in US yields reduces the allure of emerging market debt. Investors should watch for volatility in the Nifty IT index as the 'soft landing' narrative shifts to 'no landing' growth.

Closing Insight

Data dependency is back. With US manufacturing firing on all cylinders, the RBI may have less room to decouple from global rate trends. Watch USDINR levels closely near the 91.40 mark.

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