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Many currency pairs were bound in tight ranges during today’s morning London session. Also, most of the currency pairs that showed some volatility didn’t really go anywhere.

Yen pairs were an exception, though, since the yen showed slight yet broad-based weakness, likely because of the risk on vibes during the morning London session.

  • Swiss GDP q/q: 0.3% vs. 0.5% expected, 0.2% previous
  • Nationwide U.K. HPI m/m: -0.2% vs. 0.2% expected, -0.4% previous
  • RBA’s index of commodity prices y/y: 32.6% vs. 40.5% previous
  • Swiss retail sales y/y: -1.2% vs. 2.4% expected, 2.1% previous
  • Swiss manufacturing PMI: 55.6 vs. 57.8 expected, 57.4 previous
  • Spanish manufacturing PMI: 55.4 vs. 54.9 expected, 54.5 previous
  • Italian manufacturing PMI: 55.1 vs. 56.1 expected, 56.2 previous
  • French final manufacturing PMI: 53.8 vs. unchanged at 54.0 expected
  • German final manufacturing PMI: 59.5 vs. unchanged at 59.4 expected
  • Euro Zone final manufacturing PMI: unchanged at 57.0 as expected
  • U.K. manufacturing PMI: 56.7 vs. 56.5 expected, 57.3 previous

Major Events/Reports

U.K. manufacturing PMI beats consensus

It’s a brand new month, so it’s time for another set of U.K. PMI reports from Markit. And as usual, the U.K.’s manufacturing PMI got released first, and the reading for May slid lower from 57.3 to 56.7. This is a slightly softer tumble compared to the consensus that the reading will ease to 56.5.

Even so, it’s a poorer reading compared to the previous month. But on a more upbeat note, the reading is still above the 50.0 level, so the U.K.’s manufacturing sector continue to expand, albeit at a weaker pace compared to the previous month.

Commentary from Markit was also generally upbeat, as can be seen below:

“Manufacturing production and new orders both expanded at above survey average rates. Companies benefited most from the continued strength of the domestic market. There was also a solid increase in new export business as well.”

Conservative Party’s lead narrows further

The Conservative Party’s lead narrowed to a nail-biting five points last week. And a YouGov poll released earlier today managed to beat that since the new poll results showed that Theresa May’s Conservative Party now only leads Labour by a measly 3 points. Yikes!

Risk-taking persists in Europe

Another round of risk-taking sent most of the major European equity indices moderately higher during the session.

  • The pan-European FTSEurofirst 300 was up by 0.33% to 1,537.26
  • Germany’s DAX was up by 0.36% to 12,661.00
  • The blue-chip Euro Stoxx 50 was up by 0.27% to 3,564.21

U.S. equity futures also got a bullish boost.

  • S&P 500 futures were up by 0.08% to 2,413.00
  • Nasdaq futures were up by 0.20% to 5,805.12

Market analysts say that Italian shares led the way because of positive Italian data, which enticed buyers to return after political uncertainty in Italy caused a selloff of Italian shares during the past few days.

And this renewed optimism in Italy caused overall risk sentiment in Europe to improve.

Major Market Mover(s):


Not much in terms of action during today’s morning London session. Even so, the yen did show modest weakness across the board, very likely because of the risk-on vibes.

It should be noted, however, that the yen began clawing its way back up on some pairs as European equity indices came off their highs, which could be a sign of returning risk aversion.

USD/JPY was up by 16 pips (+0.15%) to 111.14, NZD/JPY was up by 6 pips (+0.08%) to 78.56, GBP/JPY was up by 22 pips (+0.15%) to 142.87


The pound had two-way action and was mixed for the session. Nonetheless, the pound is worth mentioning because price action on the pound was rather uniform.

The pound got an initial bullish boost when the session opened. No clear reason why since, but preemptive buying ahead of the U.K.’s manufacturing PMI report is a possibility.

The pound then got another bullish infusion when the U.K.’s manufacturing PMI report was released. However, pound bears were apparently waiting in the bushes and they came out and pounced on the pound bulls.

Aside from profit-taking, market analysts pointed to political uncertainty in the U.K., especially since poll results show that the Conservative Party’s lead is shrinking.

GBP/USD was down by 7 pips (-0.06%) to 1.2854 with 1.2889 as session high, GBP/CHF was up by 16 pips (+0.13%) to 1.2468 with 1.2507 as session high, GBP/NZD was up by 13 pips (+0.07%) to 1.8186 with 1.8219 as session high

Watch Out For:

  • 12:15 pm GMT: ADP’s U.S. non-farm employment change (181K expected, 177K previous)
  • 12:30 pm GMT: U.S. initial jobless claims (239K expected, 234K previous)
  • 12:30 pm GMT: U.S. revised non-farm productivity (no change from -0.6% expected and unit labor costs (no change from 3.0% expected)
  • 1:30 pm GMT: Markit/RBC Canadian manufacturing PMI (55.9 previous)
  • 1:45 pm GMT: Markit’s final U.S. manufacturing PMI (no change from 52.5 expected)
  • 2:00 pm GMT: ISM’s U.S. manufacturing PMI (54.7 expected, 54.8 previous)
  • 2:00 pm GMT: U.S. construction spending (0.5% expected, -0.2% previous)
  • 3:00 pm GMT: U.S. crude oil inventories (-2.7M expected, -4.4M previous)