US ISM manufacturing PMI dropped by 1.4pts MoM to 46.3 in March. This is its lowest level since May 2020, when it registered 43.5. The new orders index dropped by 2.7pts MoM to 44.3 in March, with new orders minus inventory levels now standing at -3.2 (nearly flat versus February and up from -7.7pts in January). The US Empire State manufacturing survey index also dropped by 18.8pts to -24.6 and the Philly Fed Forecast Capex index by 11 pts MoM to -3.8. In construction, residential spending was down 5% YoY in February, while non-residential spending rose by 17% YoY. New housing starts were down 18% YoY in February with a 3-month moving average of -21% YoY. The Architectural Billings Index (ABI) remains weak at 48 in February (vs 49.3 in January and 48.4 in December). Bank lending standards have tightened to near the levels typically preceding recessions and the DB recession probability model is back to around 90% after the banking turmoil. - Deutsche Bank
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