NY Empire State Manufacturing Index Preview – 15th Dec

The first meaningful U.S. data point of Monday’s New York session is the NY Empire State Manufacturing Index for December, due 15 December 2025 at 13:30 UK time (08:30 ET). While it’s “just” a regional survey, it often punches above its weight in markets because it lands early, moves fast, and can jolt rates and FX when positioning is one-sided.

Last month’s release reminded everyone why this print matters: the headline index jumped to 18.7 in November, signalling a solid expansion in reported activity across New York state manufacturers.

The numbers that matter:

• Previous (Nov): 18.7

• Consensus (Dec): 10.6

• Street forecast: 11

• Our Call: 9.5 (slightly below consensus)

In plain English: the market already expects a step down from November’s strength. Our view is that the “cooling” expectation is right, and the deceleration may be a little larger than priced.

What changed since the last print?

1) November was genuinely strong – but expectations cooled

The New York Fed’s November report showed new orders and shipments rising significantly, helping lift the headline to 18.7. But the same report flagged that six-month expectations fell meaningfully (i.e., firms felt better about “now” than “later”). That forward-looking softening is a classic setup for a December cool-down.

2) The national manufacturing backdrop is still heavy

Outside New York state, the broader manufacturing picture remains fragile. Reuters reported that U.S. manufacturing contracted for the ninth straight month in November, with factories facing slumping orders and higher input prices, in part tied to the drag from tariffs.

Meanwhile, ISM’s own November summary painted a similar “weak demand & cost pressure” mix, with the headline PMI at 48.2 and New Orders and Employment still contracting.

In other words: it’s hard for a regional survey to sustainably print near the high-teens when the national cycle is still stuck below 50.

3) Policy uncertainty is hitting ordering behaviour

A key late-year theme has been tariff uncertainty and the way it changes procurement behaviour. The Wall Street Journal reported U.S. manufacturers slowing orders for parts and raw materials amid uncertainty around tariffs and forthcoming legal scrutiny.

Our Call: 9.5 – Mild Downside Skew

We expect the headline to retrace toward the low-double digits and potentially a touch below the Street’s 11.

Why we’re slightly under consensus:

• Mean reversion risk after a sharp November jump (18.7 is strong by recent standards).

• Forward expectations softened in the prior survey, a clue that momentum may be fading into year-end.

• Tariff/policy uncertainty is consistent with softer new orders.

• National manufacturing remains in contraction, keeping a lid on sustained upside surprises.

Why we are not calling for a collapse:

• November’s internals showed genuine strength in activity measures (not just sentiment), which can carry over even if the headline cools.

Our base case is still expansionary (>0), just less punchy than markets expect.

Market impact: why this print can move USD and rates

The December Empire lands in a market already leaning toward “dovish Fed / softer USD.” The Fed has recently cut rates by 25bp and the policy debate is increasingly about how far easing goes from here.

Technically, the U.S. dollar index (DXY) is sitting near the 98.3–98.5 region, which some technicians describe as a critical support zone.

How we’d frame the reaction function:

• Upside surprise (≥15): risks a quick USD bounce / yields firmer, as “manufacturing isn’t rolling over” pushes back against aggressive easing expectations.

• In-line (7–13): likely muted; markets may fade the move as “noise.”

• Downside miss (<0): increases the odds of USD softness and a test/break of nearby DXY supports, especially if weakness is driven by new orders, not just random volatility.

Conclusion

The Street is positioned for a cooler December Empire State print,  and we agree with the direction. Where we differ is magnitude: We expect 9.5, a modest downside tilt versus the Street’s 11 and consensus of 10.6.

If we’re right, the “surprise” won’t be dramatic,  but with DXY sitting near widely watched support levels and the market leaning dovish, even a small miss can have an outsized price impact in FX and front-end rates.

Risk note: This is a single regional survey and can be noisy. The most important tell is not just the headline, but whether new orders and the pricing components confirm a broader cooling trend.