INSTANT VIEW: Midwest business activity shrinks in June

NEW YORK (Reuters) - Business activity in the U.S. Midwest contracted in June for a fifth straight month but at a less severe rate than feared, a report showed on Monday.

KEY POINTS: * The National Association of Purchasing Management-Chicago business barometer rose to 49.6 from 49.1 in May. * Economists had forecast the index at 48.0. A reading below 50 indicates contraction. * The employment component of the index rose to 46.7 from 41.2 in May. Prices paid slipped to 85.5 from 87.5 and new orders fell to 52.0 from 56.1.

COMMENTS:

CARL LANTZ, U.S. INTEREST RATE STRATEGIST, CREDIT SUISSE, NEW YORK:

"The headline was stronger but the details were a little more mixed.

"It's below 50 for the fifth straight month but this is the best of the sub-50 numbers that we've seen.

"It had pushed the bond market a little lower in price initially on the headline but we've come back on the basis of the details."

NICK BENNENBROEK, HEAD OF FX STRATEGY, WELLS FARGO, NEW YORK:

"The currency reaction has been modest, and I think this number will be inconsequential. Even though it's stronger than expected, it doesn't really rank up there as a highlight this week, given that we get a nationwide manufacturing gauge from the ISM tomorrow and then the ECB decision and U.S. payrolls later in the week. So this will be old news by 10 a.m. tomorrow.

"Also, our view is we are probably not quite at a bottom yet as far as the dollar is concerned. Payrolls has the greatest potential for surprise, and we think the risks are weighted toward disappointment. So even after what was a big drop for the dollar last week, there is probably still room for it to fall further."

MARK VITNER, ECONOMIST, WACHOVIA SECURITIES, CHARLOTTE, NORTH

CAROLINA:

"It is stronger than expected, which is kind of interesting because the Chicago region seems to be more closely tied to the automotive sector. The fact that we are hanging around 50 is consistent with an economy that is hovering right above recession level but is not in a recession."

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES & ASSOCIATES, ST

PETERSBURG, FLORIDA:

"The Chicago PMI was close enough to expectations. I think people were braced for a weaker number. It's not that critical compared with the rest of the week's calendar, including the employment numbers and the European Central Bank meeting."