The Institute for Supply Management’s manufacturing index for June released Monday morning climbed to 57.8 from 54.9 in May. That was the highest level of the index, where anything above 50 signals expansion, since 2014. Economists surveyed by Briefing.com had projected a slight uptick to 55 for June. The new orders index jumped to 63.5 from 59.5.
The unexpectedly strong results from the ISM survey raised bets in the financial markets that the U.S. economy was running strong enough for the Federal Reserve to raise rates for a third time in 2017, possibly as early as September.
The yield on the 10-year Treasury— which hit a six-week high last week–moved up again as bond prices fell. At 12:50 p.m. New York time Monday the yield was 2.34%. The Bloomberg Dollar Spot Index rose 0.5% Monday morning after dropping 1% last week to the lowest level since October. Gold continued its recent decline with gold futures falling 1.6% to $1,222.40 an ounce.