US factory PMI surprises to the downside in April

America's factory sector shrank rapidly last month, indicative of a record pace of contraction in the broader economy during the second quarter.

The Institute for Supply Management's manufacturing sector Purchasing Managers' Index fell from the 49.1 point level for March to 41.5 in April.

That was slightly better than the print of 37.5 which economists were anticipating, but according to analysts at Capital Economics was consistent with a 5% annualised pace of contraction in the second quarter.

However, incoming 'hard data' were pointing to a pace of contraction in the US economy during the second quarter closer to 40% on annualised basis, the consultancy warned clients, although it added that the second quarter was expected to mark the low point of the economy.

A key sub-index of new orders was especially weak, plummeting by 15.1 points to 27.1, alongside a 16.3 point drop for another sub-index tied to hiring that fell by 16.3 points to 27.5.