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Bob Mason
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Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session. Japan’s May inflation figures and prelim June manufacturing PMI numbers provided direction early on.

For the Japanese Yen

The annual rate of core inflation came in at 0.8% in May, which was in line with forecasts, while softening from an April 0.8%. According to figures released by the Ministry of Internal Affairs and Communication,

  • Month-on-month, consumer prices remained unchanged, which was also in line with forecasts.

The Japanese Yen moved from ¥107.326 to ¥107.312 against the greenback upon release of the figures that preceded the PMI.

Japan’s manufacturing PMI fell from 49.8 to 49.5 in June, which was worse than a forecasted rise to 50.0. According to the latest Japan Manufacturing PMI Markit survey,

  • New orders fell at the fastest pace since June 2016, with new export orders also sliding at a faster pace.
  • While backlogs decreased at a faster pace, employment increased at a faster pace.
  • Output decreased at a slower pace in June.
  • In spite of the slide in new orders and the largest fall in backlogs since January 2013, firms remained optimistic.

The Japanese Yen moved from ¥107.341 to ¥107.357 against the greenback upon release of the figures. At the time of writing, the Japanese Yen was down by 0.05% to ¥107.35 against the U.S Dollar.


At the time of writing, the Aussie Dollar was up by 0.04% to $0.6926, while the Kiwi Dollar was up by 0.06% to $0.6591.


The Day Ahead:

For the EUR

It’s a busy day ahead for the EUR.

France, Germany and the Eurozone’s prelim June private sector PMI numbers are due out later this morning.

Any improvement in Germany’s manufacturing PMI would be positive for the EUR. With the ECB promising support and Trump and Xi meeting next week, the markets will likely be able to accept yet another month of contraction.

In May, the Eurozone’s composite PMI rose from 51.5 to 51.8, supported by the services sector. Service sector activity will need to remain resilient to support the EUR on the day.

From the U.S, prelim private sector PMI figures could also influence later in the day.

On the geopolitical front, any chatter from the Oval Office will need to be considered. There’s rising tensions between the U.S and Iran to consider and the ongoing U.S – China trade war.

It wouldn’t be the first time that Trump’s fires a curveball ahead of a high profile meeting…

At the time of writing, the EUR was up by 0.02% to $1.1295.

For the Pound

It’s a quiet day ahead, with no material stats due out of the UK today.

While monetary policy divergence provided the Pound with upside against the Greenback mid-week, the focus will likely return to Brexit and the leadership race.

Brexiteer Boris Johnson and Jeremy Hunt go head-to-head into tomorrow’s final vote.

At the time of writing, the Pound was up by 0.05% to $1.2708.

Across the Pond

It’s a relatively busy day for the Greenback.

Prelim June private sector PMI numbers will provide direction along with May existing home sales.

The Greenback is on the back foot going into the weekend and we can expect the Dollar to be sensitive to any weak numbers. Market focus will be on the service sector PMI, though expect manufacturing data and housing sector data to also influence.

Outside of the numbers, chatter from the Oval Office will also need to be monitored. The Art of the Deal leaves the markets exposed to unexpected Tweeting ahead of next week’s G20 Summit.

On the monetary policy front, FOMC members Mester and Brainard are also scheduled to speak.

At the time of writing, the Dollar Spot Index was down by 0.02% to 96.610.

For the Loonie

April retail sales figures will provide direction later in the day.

Outside of the stats, a rebound in oil prices has provided much-needed support as U.S – Iran tensions build.

Any further build up in tension would be another positive for the Loonie on the day.

The Loonie was up by 0.10% to C$1.3179, against the U.S Dollar, at the time of writing.

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