It seems that no news is good news for the Greenback as the U.S. currency got back on its feet to wait for the FOMC minutes coming up.
- U.S. flash manufacturing PMI down from 52.8 to 52.5 vs. 53.2 forecast
- U.S. flash services PMI rose from 53.1 to 54.0 vs. 53.3 forecast
- Richmond manufacturing index slumped from 20 to 1 vs. consensus at 15
- U.S. new home sales slipped from 642K to 569K vs. 611K estimate
- FOMC member Kashkari: Needs to see more data before June decision
- Kashkari: Inflation is going in the wrong direction
Mostly downbeat U.S. data
Uncle Sam’s numbers didn’t look so good lately, but this did very little to cast doubts on June rate hike expectations. New home sales slipped to 569K versus the 611K estimate, but the earlier reading was upgraded from 621K to 642K.
The flash manufacturing PMI for May slipped from 52.8 to 52.5 to reflect a slower pace of industry growth instead of rising to the consensus at 53.2. On the other hand, the services PMI improved to 54.0, outpacing the forecast at 53.3. To top it off, the previous reading was upgraded from 52.5 to 53.1.
The Richmond manufacturing index posted a steeper drop from 20 to 1 instead of dipping to 15. Underlying data revealed that the decline was mostly due to lower shipments and new orders. The index for employment was relatively flat while majority of firms included in the survey reported higher wages.
Kashkari still on the fence for June
If you’ve been keeping tabs on the latest FOMC decisions, you’d probably be familiar with Neel Kashkari who has been dissecting the rate hikes. In his testimony this week, the dovish FOMC member said that he’s still waiting for more economic data before figuring out his bias for the June Fed statement.
In particular, he acknowledged that the U.S. economy is moving closer to full employment but that inflation is going in the wrong direction. He pointed out that wage growth has been slow but that it might be enough to pull in more workers and absorb the remaining slack in the labor market.
Major Market Movers:
Newswires have been pretty mum about the probe on Trump’s intelligence leak so traders are turning their attention to economic data and the odds of a June hike.
USD/JPY recovered from the 111.00 area to a high of 111.99, EUR/USD retreated from 1.1250 to a low of 1.1187, USD/CHF popped up from .9705 to .9753, and GBP/USD fell from 1.3033 to 1.2955.
Watch Out For:
- 2:30 am GMT: Australia construction work done q/q (-0.5% expected, -0.2% previous)