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The pound shrugged off the tragic terror attacks in London and continued to claw its way higher. The euro, meanwhile, was under bearish pressure throughout the session.

The Loonie is also noteworthy because it’s the second worst-performing currency, likely because it got dragged down by the slide in oil prices.

  • Some major European markets out on Whit Monday holiday
  • Spanish services PMI: 57.3 vs. 57.5 expected, 57.8 previous
  • Italian services PMI: 55.1 vs. 55.4 expected, 56.2 previous
  • French final services PMI: 57.2 vs. unchanged at 58.0 expected
  • German final services PMI: 55.4 vs. unchanged at 55.2 expected
  • Euro Zone final services PMI: 56.3 vs. unchanged at 56.2 expected
  • U.K. services PMI: 53.8 vs. 55.1 expected, 55.8 previous

Major Events/Reports

U.K. services PMI disappoints

Markit’s services PMI reading for the month of May came in at 53.8, which is a big miss from the consensus that it would only ease from 55.8 to 55.1.

Also, this is the worst reading in three months, but it’s still above the 50.0 neutral level at least, so the service sector still expanded, albeit at a slower pace.

According to Markit, “Anecdotal evidence from survey respondents mainly cited weaker new business growth in May” for the weaker reading. Furthermore, new business growth “was the least marked for three months.”

And this slowdown in business growth “reflected a softer pace of new order growth, which survey respondents linked to squeezed household budgets and, in some cases, delayed decision making among clients ahead of the General Election.”

Conservative Party’s lead widens

There were a few poll results that were released during the weekend. And the most disappointing one (for Theresa May’s Conservative Party) was this one.

That’s right! A lead of one measly point. Thankfully for the Conservative Party (and probably for the pound), the results of newer poll was released earlier during the session and it showed that the Conservative Party’s lead widened to 11 points.

Oil resumes slide

After staging a recovery on Friday and then jumping higher on news about Qatar earlier today, oil benchmarks erased their gains and resumed last week’s oil slide during today’s morning London session.

  • U.S. WTI crude oil was down by 0.67% to $47.34 per barrel
  • Brent crude oil was down by 0.76% to $49.57 per barrel

Aside from wavering in OPEC’s oil cut deal extension because of the continuing rise in U.S. oil output, market analysts also say that the quarrel between Qatar and some of its neighbors may end up disrupting OPEC’s oil cut deal, negating whatever positive effects the extended oil cut deal may have on the oil market.

Some risk aversion to start the week in Europe

Some of the major European markets were away on holiday during the session, but those markets that were open had a rather risk-off vibe to them.

  • The pan-European FTSEurofirst 300 was down by 0.11% to 1,540.41
  • The U.K.’s FTSE 100 was down by 0.26% to 7,527.75

U.S. equity futures also were also feeling the risk-off vibes.

  • S&P 500 futures were up by 0.12% to 2,434.75
  • Nasdaq futures were up by 0.13% to 5,878.62

Market analysts say the aversion to risk during the session was due to worries over Spanish banks, thanks (or no thanks) to the possibility that Spain’s embattled Banco Populare may get wound down.

Major Market Mover(s):


The pound was the best-performing currency of the session, despite the U.K.’s poor services PMI reading and the terror attacks over the weekend, very likely because pound bulls were relieved to find out that the most recent poll results showed a bigger lead for the Conservative Party.

GBP/USD was up by 39 pips (+0.30%) to 1.2912, GBP/JPY was up by 32 pips (+0.23%) to 142.72, GBP/CHF was up by 52 pips (+0.42%) to 1.2465


Despite a bunch of mostly positive PMI reports, the euro ended up being the worst-performing currency of the session. No clear reason why, but profit-taking after last week’s rally and ahead of this week’s ECB statement is a possibility.

EUR/USD was down by 17 pips (-0.16%) to 1.1246,  EUR/JPY was down by 29 pips (-0.24%) to 124.31, EUR/GBP was down by 40 pips (-0.46%) to 0.8709


The poor Loonie got whupped during the session and ended up as the second weakest currency after the euro, very likely because oil reversed course and plunged, dragging the poor Loonie with it.

USD/CAD was up by 15 pips (+0.12%) to 1.3490, AUD/CAD was up by 26 pips (+0.27%) to 1.0083, NZD/CAD was up by 20 pips (+0.21%) to 0.9618

Watch Out For:

  • 12:30 pm GMT: U.S. revised quarterly non-farm productivity (no change from -0.6 expected) and unit labor costs (unchanged at +3.0% expected)
  • 1:45 pm GMT: Markit’s final U.S. services PMI (revision from 54.0 to 54.1 expected)
  • 2:00 pm GMT: ISM’s U.S. non-manufacturing PMI (57.1 expected, 57.5 previous)
  • 3:00 pm GMT: U.S. factory orders (-0.2% expected, 0.2% previous)