Article Highlights

  • European PMI data lower: 53.2 vs. 53.5 forecast/previous; Composite PMI   53.5  vs. 53.9 forecast/previous
  • U.K. Markit Services PMI: 58.6 vs. 58.2 forecast, 58.7 previous
  • European PPI m/m inline with -0.1% forecast, -0.2% previous
  • European GDP (2nd Est.) q/q inline with 0.2% forecast/previous
  • U.S. ADP Employment lower-than-expected: 179K vs. 210K forecast, 215K previous
  • Canadian Merchandise Trade weaker: -0.64B CAD vs. 0.2B CAD forecast, 0.77B previous
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Volatility was tight but picked up from Asia during the morning London session thanks PMI data from both Europe and the U.K. We saw whipsaw reactions to both the strong U.K. and weak European data, ending up with both the euro and Sterling seeing support within a few hours after their respective releases.

At 1:15 pm GMT, we kicked off the North American data deluge with the U.S. ADP Employment Survey.  This private payroll data is often seen as a glimpse of the monster data point of the month–U.S. Non-Farm Payroll–and it was a disappointment.  Fortunately for Greenback bulls, the sell off reaction was pretty weak and quickly faded to bring USD slightly up on the session:

USD/JPY is up 8 pips (+0.08%) to 102.57, EUR/USD is down 11 pips (-0.08%) to 1.3615, and USD/CHF is up 5 pips (+0.06%) to .8966

For the rest of the afternoon London trading session we’ve got a couple more tier one events at 3:00 pm GMT. First is the ISM non-manufacturing survey data, which will give as a view into economic conditions in the services sector; the forecast is for a slight tick higher to 55.5 vs. 55.2.  And released at the same time as the ISM data, it’s the big event of the day in the form of the Bank of Canada’s monetary policy decision.  The Canadian dollar traded up against its peers in May despite mostly weak economic data, so it’ll be interesting what the BOC has to say about that and how the market prices it in.

Finally, we’ll get the Federal Reserve’s Beige Book report at 7:00 pm GMT. It’s not normally a market mover, but has been known to change market sentiment a time or two in the past as it does give us a view of economic conditions from the eyes of banks, business leaders, economists, etc. We’ve got a packed economic calendar this week, all starting today, so stay safe and stay frosty traders!

See also:

Asia Session Recap

U.S. Session Recap

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