Previous Day's Market Highlights
Sterling fell in the morning before recovering later in the session. The pound has been broadly under pressure recently as opinion polls shower a closer race ahead of next week’s elections. As for UK data, Manufacturing PMI fell less than forecast, but the release overall had a relatively limited impact on the pound.
Overnight, sterling-dollar briefly broke 1.2900 and sterling-euro briefly broke 1.1500. Euro-dollar held above 1.1200 besides a brief dip in the afternoon session.
The ADP Employment Change figure surprised significantly to the upside at 253K versus 174K. The dollar strengthened on the release. Initial Jobless Claims were higher than forecast but still well below the 300K mark consistent with an improving labour market. Manufacturing PMI unexpectedly rose.
A dip in China’s Caixin Manufacturing PMI below 50 and lower oil prices weighed on commodity currencies.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1464||1.1929||1.1426||4.22%|
|GBP / USD||1.2860||1.3048||1.2768||2.15%|
|EUR / USD||1.1218||1.1269||1.0839||3.82%|
|GBP / NZD||1.8173||1.8964||1.7990||5.14%|
|GBP / CAD||1.7385||1.7856||1.7195||3.70%|
Today's Market Highlights
Given yesterday’s strong ADP release, expectations will be high for today’s NonFarm Payrolls figure (13:30 BST). Also of interest this month will be the Average Earnings figures as the Fed considers the strength of inflation heading into its mid-June meeting.
Positive data could support rate hike expectations and strengthen the dollar, while if market expectations are disappointed, the dollar could instead weaken. According to the CME FedWatch Tool, investors see around a 96% chance that the Fed will hike rates.
This morning, the UK releases Construction PMI (09:30 BST), which typically has the most limited market impact of the three PMI figures. The Services index will come out on Monday.
Other releases to keep an eye on include the Eurozone’s Producer Price Index (10:00 BST) and Canadian trade data (13:30 BST).
Today's Economic Calendar
|09:30||GBP||Markit Construction PMI (May)||52.7||53.1|
|10:00||EUR||Producer Price Index MoM (Apr)||0.3%||-0.3%|
|10:00||EUR||Producer Price Index YoY (Apr)||4.5%||3.9%|
|13:30||USD||Unemployment Rate (May)||4.4%||4.4%|
|13:30||USD||Average Hourly Earnings MoM (May)||0.2%||0.3%|
|13:30||USD||Average Hourly Earnings YoY (May)||2.6%||2.5%|
|13:30||USD||NonFarm Payrolls (May)||185K||211K|
|13:30||CAD||Trade Balance (Apr)||$-0.07B||$-0.14B|