Previous Day's Market Highlights
The euro has firmed as fresh Italian elections seem increasingly unlikely. Overnight, the president approved a government formed by the populist parties.
After a brief test of 1.14, sterling-euro again traded below 1.14, and euro-dollar held in the upper half of the 1.16-1.17 band after a brief break above 1.17. Sterling-dollar again tested 1.33 before falling below the key level as the dollar gained in the afternoon session. Personal Consumption Expenditures and Personal Spending figures beat expectations.
As for the day’s main data, Eurozone inflation surprised to the upside. Headline inflation accelerated to 1.9% from 1.2% in March and core inflation returned to 1.1% from 0.7%. Rising inflation adds support to the case for the ECB to normalise monetary policy, providing the effect is lasting and not just temporary. The ECB targets an inflation rate of just under 2%. However, the release’s impact on the euro was relatively limited; markets had likely already priced in a surprise to the upside after the previous day’s German inflation print had come in better than forecast.
The Canadian dollar weakened in the afternoon session after GDP data were mixed. The economy slowed less than expected from February to March but more than expected on an annualised basis from Q4 to Q1. Alongside the euro and the Mexican peso, the loonie weakened after the US announced it would proceed with tariffs on aluminium and steel.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Attention shifts back to economic data today. A dip in the UK’s Manufacturing PMI in May could weaken the pound this morning (09:30 BST).
The main focus of the day is this afternoon’s US May jobs report, particularly the Nonfarm Payrolls and Average Hourly Earnings figures (13:30). A pick-up in wages and the number of jobs added to the economy could see the dollar strengthen this afternoon. Gains in the ISM Manufacturing PMI could also see dollar strength this afternoon (15:00).
Highlights next week include the UK’s Construction and Services PMIs, the Reserve Bank of Australia’s latest interest rate decision, Australian GDP, and the next estimate of the Eurozone’s Q1 GDP.
Today's Economic Calendar
|09:30||GBP||Markit Manufacturing PMI (May)||53.5||53.9|
|13:30||USD||Nonfarm Payrolls (May)||188K||164K|
|13:30||USD||Average Hourly Earnings MoM (May)||0.2%||0.1%|
|13:30||USD||Average Hourly Earnings YoY (May)||2.7%||2.6%|
|13:30||USD||Unemployment Rate (May)||3.9%||3.9%|
|13:55||USD||Fed's Kashkari Speaks|
|14:30||CAD||Markit Manufacturing PMI (May)||55.4||55.5|
|14:45||USD||Markit Manufacturing PMI (May)||56.6||56.6|
|15:00||USD||ISM Manufacturing PMI (May)||58.1||57.3|