Forex Flash: ISM manufacturing index to retreat a little further to 50.5 - RBS

FXstreet.com (San Francisco) - The Institute for Supply Management (ISM) is scheduled to publish its April US Manufacturing Index in Wednesday at 14 GMT (10h EST) and the market is expecting a decline to 50.9 in April from the March's figure of 51.3. However, the RBS analyst team sees a deeper contraction to 50.5.

"The ISM manufacturing index fell in March by 2.9 points to 51.3, a level more consistent with its average during the second half of 2012 (50.9) than the elevated readings during January and February (53.1 and 54.2, respectively)," points the RBS team.

"As with other indicators in the manufacturing sector (and indeed, the economy as a whole), the March result suggested that the burst of strength seen in the beginning of the year had faded and the economy had decelerated to a more modest pace of growth," the bank adds.

The RBS analyst team believes "this softness persisted in April, with the ISM manufacturing index retreating a little further to about 50.5."