With US hard data taking a beating (relative to expectations) last week (red line below), analysts remain hopeful that US Manufacturing will hold up (durable goods orders were solid) with this morning's Manufacturing PMIs set to signal stability.

• The final May S&P Global US Manufacturing rose to 55.1 (down from the 55.3 flash print) but the strongest since April 2022

• ISM's Manufacturing PMI survey also signaled improvement, up from 52.7 to 54.0 (better than 53.0 expected).

"At first glance, the manufacturing sector seems to be firing on all cylinders but lift the hood and the picture is not so clear," says Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

The headline PMI has hit a four-year high, with strong factory production growth for a second successive month in response to a further marked upturn in order books, but since the outbreak of war in the Middle East we have seen production and demand buoyed by stock building as companies worry over rising prices and supply difficulties.

This stockpiling was again widely evident in May and makes it hard to take an accurate reading on the underlying health of the manufacturing economy, as growth will cool once this stock build has run its course," Williamson noted.

"The incidence of supply chain delays is the highest since August 2022, with the buying of safety stocks not only adding to the supply squeeze from the closure of the Strait of Hormuz but also pushing prices higher for a wide variety of inputs.

Williamson ends on a more ominous - stagflationary - notes: warning that the resulting steep jump in producer costs sends a worrying signal that broader economy inflation has further to rise in the coming months.