Slowing US manufacturing data raises the chances of a Fed rate cut

Today’s US ISM July manufacturing index was very weak. The overall balance fell to 46.8 from 48.5 (consensus 48.8), meaning it has been below the 50 threshold in 20 of the past 21 months.
Employment was very weak, falling from 49.3 to 43.4, the worst reading since the epidemic (June 2020) and foreshadowing a potentially very disappointing non-farm payroll number tomorrow.
Meanwhile, new orders fell from 49.3 to 47.4 and production fell from 48.5 to 45.9.