The ISM report indicated the overall economy contracted in October for the first time in 83 months as the rate of the decline in the manufacturing sector became significantly faster. The overall reading (38.9) was the lowest since September 1982. Inflationary pressures receded sharply for the month as demand waned, with the prices index (Actual 37, Expected 49.0, Previous 53.5)) falling to the lowest since December 2001. Export orders contracted for the first time following 70 months of growth.
The Euro (Eur/Usd) had traded higher by as much as 150 pips in the overnight sessions but found strong resistance at the 1.2900 area. Once in N.Y., the pair fell as oil declined and traders showed little enthusiasm for risk.

The PMI showed the euro-area manufacturing side of the economy contracted for the fifth consecutive month. The October number of 41.1 is slightly smaller than analysts' expectations of 41.3. The Euro-zone PMI survey is at a multi-year low, pointing out that the economic contraction may be stronger and even more prolonged than previously thought.