UK and Eurozone PMIs disappoint, greenback takes advantage…
Yesterday saw weaker PMIs across the board in Europe. UK manufacturing PMI fell to the lowest level in 78-months while Eurozone numbers remained near their recent lows.
The greenback performed well yesterday, bolstered by the weekend’s positive outcome as well as softer external data. In addition US economic figures surpassed expectation, alleviating some of the pressure on the Federal Reserve to cut rates at the end of the month. The US dollar should be much more responsive to domestic data over the coming weeks as each release will contribute to the Fed’s decision making.
Overnight, the Reserve Bank of Australia have once again cut interest rates from 1.25% to 1%. This is the second rate cut in the same amount of months and pushes Australia’s cash interest rate to a new all-time low. The Aussie’s reaction has been a surprising one. It’s actually strengthened on the back of this move, the logic being that the market had already anticipated this action and it’s unlikely the RBA will cut for a 3rd time.
Today’s calendar is rather light – UK construction PMI will be the highlight along with German retail sales. In addition we’ll have speeches from Bank of England governor, Mark Carney, as well as Fed members Mester & Williams.
Written by Viv Savani. 8:29am, July 2nd 2019
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