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Wall St. finished marginally higher overnight with the Nasdaq the outperformer, up 0.30% despite a weak lead from European and Asian bourses. Oil managed modest gains while wheat and sugar both traded over 3.5% higher. AUD/USD continues to be rangebound, managing just .6640/.66725 on the day. USDJPY continues to change hands above 160, as we look for the next catalyst for a leg higher.Into the London lunch and AUD/USD was softer, trading back to 0.6651 while NZD/USD climbed to 0.6104. EUR/USD and GBP/USD were a touch higher to 1.0704 and 1.2654 while USD/JPY traded either side of 160.50.US weekly jobless claims data was largely as expected with initial claims at 233k against forecasts of 235k while continuing claims were 1.839 mio against forecasts of 1.828 mio. May Durable Goods Orders rose 0.1% to beat expectations of a 0.5% decline though there were significant negative revisions. Conversely, the core measure fell by 0.1% compared to expectations of a 0.2% gain though. Finally and Q1 GDP was revised up to 1.4% as expected with Personal Consumption revised down to 1.5% from 2.0% and Core PCE was revised up to 3.7% from 3.6%.The USD was modestly weaker in early NY trade with EUR/USD and GBP/USD rising to new highs of 1.0726 and 1.2670 while NZD/USD moved up towards 0.6110. USD/JPY fell to lows under 160.30 while USD/CAD dipped to 1.3676. The local unit rising slightly though generally holding mid-range on the day to underperform other majors.Day Ahead
In China, the NBS manufacturing PMI for May will be released, markets expect it to remain steady at 50.3 (April: 50.4). High-frequency data suggest that overall production remained robust in May, supported by strong track of the two-speed recovery, namely exports and new energy.Eurozone CPI for May will be closely watched today ahead of the ECB meeting on June 6. Although core prices are unlikely to show further progress with disinflation in the month, this is unlikely to deter the ECB from cutting rates next month. However, upside surprises, particularly on services price inflation, would influence market pricing for additional cuts later in the year.
Canada real GDP for 1Q will also be released today and consensus expects an improvement to an annualized rate of +1.8%, which would mark the strongest growth rate since 1Q23. The BoC policy outlook could be impacted by the underlying detail, including growth in final domestic demand and the preliminary estimate for real GDP in April.
US core PCE for April could shape expectations for Fed policy. Analysis of inputs from the CPI and PPI suggests a reading of about +0.25% MoM, marking a deceleration from March. US personal income and outlays for April data will help inform impressions of the health of the consumer. Recent data have suggested some softness in consumer confidence and retail sales were weak for the month. Consensus expects a flat reading for real personal consumption, a figure that may weigh on tracking estimates of 2Q real GDP growth.
Economic data to watch out for.
• JP – May. Jobless Rate
• JP – Jun. Tokyo CPI y/y
• JP – May. Industrial Production y/y
• AU – Apr. Private Sector Credit y/y
• CN – May. Composite PMI
• CN – May. Manufacturing PMI
• UK – Apr. Housing Credit y/y
• EU – May. CPI Core y/y
• EU – May. CPI m/m
• CA – Mar. GDP y/y
• US – Apr. PCE Deflation y/y
• US – Apr. Real Personal Spending
• US – Fed’s Bostic Gives Commencement Speech (edited)
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6650 |
| AUD/NZD | 1.0928 |
| AUD/JPY | 106.87 |
| AUD/CNY | 4.8571 |
| AUD/EUR | 0.6209 |
| AUD/GBP | 0.5258 |
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