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Apple WWDC23 to begin at the top of the hour

Mon, Jun 5, 2023 4:46 PM

<p>The Apple WWDC23 will begin at the top of the hour. </p><p class="text-align-start">Apple is set to introduce its most groundbreaking hardware product in years at the Worldwide Developers Conference since the Apple Watch. The company is anticipated to introduce a "mixed reality" headset, merging augmented and virtual reality technologies.</p><p class="text-align-start">Apple CEO Tim Cook has long championed the potential of augmented reality to enhance communication and collaboration. However, the success of the headset is not guaranteed as past attempts by tech companies to popularize headsets have struggled to gain mass acceptance, and the market remains relatively niche.</p><p>The conference will also feature a range of announcements, including software updates for devices like the iPhone and Apple Watch. The company may also hint at plans to integrate more AI across its products and services.</p><p>How can you stay away?</p><p>Meanwhile, in the markets:</p><p>US yields are moving back toward the middle of the trading range. The US session started the day with yields higher, then reversed lower after the week and expected ISM nonmanufacturing data. The yields are now back near the middle of the ranges.</p><ul><li>2 year yield 4.499% -0.4 basis points</li><li>5 year 3.845% +0.4 basis points</li><li>10 year yield 3.696% +0.3 basis points</li><li>30 year 3.887% +0.5 basis points</li></ul><p>In the US stock market, NASDAQ shares or higher, S&amp;P index is higher as well but the Dow is trading down:</p><ul><li>Dow industrial average -0.18%</li><li>S&amp;P index +0.29% </li><li>NASDAQ index +0.56%</li></ul><p>In other markets</p><ul><li>Crude oil is higher but off their highest levels after Saudi Arabia said that they would decrease production in the several months. Oil currently trades at $72.85. The high price reached $75.06. The low price was down $72.02</li><li>Spot gold is up $11.18 or 0.57% at $1958.50. The price is reacting to the lower dollar.</li><li>Silver is trading down $0.07 at $23.54</li><li>Bitcoin is now trading at $25,795 after reaching a intraday low of $25,483. That took the price below the May low of $25,790. The next target comes at the 50% midpoint of the move up from the March low at $25,302</li></ul><p>In the forex, the CHF is the strongest of the majors, while the GBP is the weakest. The USD is mixed. </p> This article was written by Greg Michalowski at

Down day for the European major indices

Mon, Jun 5, 2023 3:36 PM

<p>The major European indices are closing lower on the day.</p><ul><li>German DAX -0.54%</li><li>France CAC -1.0%</li><li>UK's FTSE 100 -0.12%</li><li>Spain's Ibex -0.31%</li><li>Italy's FTSE MIB -0.90%</li></ul><p>The declines come after 2 days of gains.</p> This article was written by Greg Michalowski at

Saudi Arabia raises all July crude prices for Asia

Mon, Jun 5, 2023 2:32 PM

<p>Saudi Arabia set Arab light crude for July at +$3 to Asia, up from $2.55 previously.</p><p>Oil has largely given back the post-OPEC gains in what will be a painful blow to the group. WTI crude oil was last up $0.49 to $72.17.</p> This article was written by Adam Button at

US May employment trends 116.15 vs 116.18 prior

Mon, Jun 5, 2023 2:00 PM

<ul><li>Prior was 116.18</li></ul> This article was written by Adam Button at

US April factory orders 0.4% versus 0.8% expected

Mon, Jun 5, 2023 2:00 PM

<ul><li><a href="" target="_blank" rel="follow">Prior</a> +0.4% (was revised from 0.9% in the preliminary). Revised to +0.6%</li><li>Factory orders April 0.4% vs 0.8% expected</li><li>Factory orders Ex transportation -0.2% versus -0.7% last month.</li><li>Durable goods orders (revised) 1.1% versus 1.1% preliminary. Last month +3.3%</li><li>Durable goods ex-defense -0.7% versus -0.6% preliminary. Last month +3.2%</li><li>Durable goods ex-transportation -0.3% vs -0.2% preliminary. Last month +0.3%</li><li>Nondefense capital goods ex-air 1.3% vs 1.4% preliminary. Last month -0.6%</li></ul><p>Shipment Data:</p><p class="text-align-start">In April, shipments of manufactured durable goods, down for two of the last three months, fell by $2.1 billion, or 0.7%, to $277.6 billion. This aligns with the previously published decrease and follows a 0.7% increase in March. The decrease was predominantly driven by transportation equipment, which was down for three of the last four months, with a decline of $1.6 billion, or 1.8%, to $87.4 billion.</p><p class="text-align-start">Meanwhile, shipments of manufactured nondurable goods, which have been declining for five of the last six months, also decreased in April by $0.4 billion, or 0.1%, to $294.7 billion. This drop follows a substantial 1.8% decrease in March. The decrease was led by food products, which dropped for the second consecutive month, with a decrease of $0.3 billion or 0.4% to $79.8 billion.</p><p>Inventory Data:</p><p class="text-align-start">In April, inventories of manufactured durable goods, which include long-lasting items like machinery, vehicles, and equipment, rose for four out of the last five months. They increased by $5.1 billion, or 1.0%, to $521.8 billion, matching the previously published increase. This rise comes after a 1.0% decrease in March. The increase was led by transportation equipment, which has seen growth three of the last four months, with a rise of $5.1 billion or 3.2% to $164.1 billion.</p><p>In contrast, inventories of manufactured nondurable goods, which include items with a shorter life span, such as food, clothing, or petroleum products, declined for five out of the last six months. They decreased by $1.0 billion, or 0.3%, to $334.9 billion following a 0.7% decrease in March. The decrease was primarily due to petroleum and coal products, which fell $0.7 billion or 1.4% to $46.8 billion.</p><p>Looking at the stage of fabrication, materials and supplies for durable goods increased by 0.3% in April, while nondurable goods saw a decrease of 0.6%. Work in process for durable goods increased by 2.5%, while nondurable goods decreased by 0.4%. Finished goods for durable items increased slightly by 0.1%, and for nondurable goods, they were essentially unchanged.</p><p>For the full report <a href=";utm_content=&amp;utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="nofollow">CLICK HERE</a></p> This article was written by Greg Michalowski at

US ISM May services index 50.3 vs 52.2 expected

Mon, Jun 5, 2023 2:00 PM

<ul><li><a href="" target="_blank" rel="follow">Prior </a>was 51.9</li><li>employment index 49.2 versus 50.8 prior</li><li>new orders index 52.9 versus 56.1 expected</li><li>prices paid index 56.2 versus 59.6 prior -- lowest since May 2020</li><li>new export orders 59.0 versus 60.9 last month</li><li>imports 50.0 versus 51.3 last month</li><li>backlog of orders 40.9 versus 49.7 last month</li><li>inventories 58.3 versus 47.2 last month</li><li>supplier deliveries 47.7 versus 48.6 last month</li><li>inventory sentiment 61.0 versus 48.9 last month</li></ul><p>Bad news is good news as the market cheers a softer reading. The odds of the Fed staying on hold rose with this report to 27% from 30%. The US dollar has fallen across the board as both the headline and price metrics dip.</p><p>Comments in the report:</p><ul><li>“Restaurant sales continue to track positive year over year, up an average of 8 percent past month. Employment needs have leveled off, and we are in a position to evaluate and upgrade rather than just maintain. Supply chain pressures have eased overall with some categories still hot spots. We are in a position to continue investing in technology upgrades and restaurant remodels.” [Accommodation &amp; Food Services]</li><li>“Overall slowing growth and market conditions dragging on some construction sectors.” [Construction]</li><li>“As a higher-education institute, enrollment will have a major impact on our institution. Factors to consider will be the economy (state and national), as well as continued funding for education. Our enrollment is currently projected to drop 2.5 percent, which will have a negative effect on our budget.” [Educational Services]</li><li>“Pent-up demand for services is driving strong revenue performance, but expenses (labor and supplies) continue to put pressure on margins, hindering the financial forecast. There is modest improvement in financial metrics, but it is becoming clear we will have to find ways to do more with less. Supply chains are stabilizing, though some segments remain choppy. The overall outlook, however, suggests the forecast is good for the next quarter. Pent-up demand for services is also causing capacity constraints, but we appear to be managing appropriately at this time.” [Health Care &amp; Social Assistance]</li><li>“Electronic components supply is strong, and lead times are nearly back to pre-pandemic.” [Information]</li><li>“Economy is slowing amid increased financial banking and leasing activity. Credit standards have increased, and approvals have fallen — thus, a tight credit situation.” [Management of Companies &amp; Support Services]</li><li>“Everything seems to have leveled off: not getting any worse, not getting any better.” [Professional, Scientific &amp; Technical Services]</li><li>“Lead times are starting to shorten, due in part to greater transportation availability. Prices, in general, are continuing to increase but at a slower pace. Supply chain is becoming much more reliable.” [Public Administration]</li><li>“Overall business is good, and there has not been a significant change in direction.” [Retail Trade]</li><li>“Business has significantly increased, with more orders, newer customers and more activity in general. More end users are getting back to business as usual, fighting for lower prices and taking a few more days to pay. The leverage point seems to have shifted back to end users, which is healthy.” [Transportation &amp; Warehousing]</li><li>“Business conditions continue to remain elevated as CapEx (capital expenditures) spending in clean energy follows regulatory demands.” [Utilities]</li><li>“Supply is plentiful, freight is moving quickly and costs are coming down. This is a 180-degree change from a year ago. Also, sales demand is down.” [Wholesale Trade]</li></ul> This article was written by Adam Button at

S&P Global final May US services PMI 54.9 vs 55.1 prelim

Mon, Jun 5, 2023 1:45 PM

<ul><li>Fourth consecutive increase</li><li>Best services reading in 13 months</li><li>Prelim was 55.1</li><li>Prior was 53.6</li><li>Composite PMI 54.3 vs 54.5 prelim</li><li>Prior composite 53.4</li><li>Both input and output price inflation softened</li></ul><p>This is a slight downgrade and adds a small negative bias to the ISM services data at the top of the hour.</p><p>Chris Williamson, Chief Business Economist at S&amp;P Global Market Intelligence, said: </p><blockquote>"The US continued to see a two-speed economy in May, with the sluggishness of the manufacturing sector contrasting with a resurgent service sector. Businesses in sectors such as travel, tourism, recreation and leisure are enjoying a mini post-pandemic boom as spending is switched from goods to services.</blockquote><blockquote> "The survey data are indicative of <a href="" class="terms__secondary-term" id="22438661-6aff-4854-bfc8-fcc2084a48f0">GDP</a> growing at an annualized rate of just over 2%, and an upturn in business expectations points to growth remaining robust as we head further into the summer. </blockquote><blockquote>"However, just as demand has moved from goods to services, so have inflationary pressures. While goods price inflation has fallen dramatically in May to register only a marginal increase, prices charged for services continue to rise sharply. Although down considerably on last year's peaks, service sector <a href="" class="terms__main-term" id="ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa">inflation</a> remains higher than any time in the survey's 10-year history prior to the pandemic, bolstered by a combination of surging demand and a lack of operating capacity, the latter in part driven by labor shortages. </blockquote><blockquote>"However, while rejuvenated service providers will make hay in the summer season, the weakness of manufacturing raises concerns about the economy's resilience later in the year, when the headwind of higher interest rates and the increased cost of living is likely to exert a greater toll on spending." </blockquote> This article was written by Adam Button at

US equities are looking lifeless to start the week

Mon, Jun 5, 2023 1:25 PM

<p>S&amp;P 500 futures are up 3 points, or 0.08%, to 4291 in a market that appears to be in wait-and-see mode ahead of the ISM services data at the top of the hour.</p><p>The index had a strong finish last week to close at the best levels since last August.</p> This article was written by Adam Button at

Saudis are fed up with OPEC members not meeting oil output goals - report

Mon, Jun 5, 2023 12:52 PM

<p>The Saudis are fed up with OPEC members not meeting output goals, according to a Bloomberg report. The Saudi Energy Minister reportedly told Al Arabiya also seeking more transparency from Russia.</p><p>Those comments might be seen as a warning that if quotas and pledges aren't met, they will flood the market; or at least they won't continue with 1 mbpd cuts beyond July.</p><p>From where I stand, compliance hasn't been a big issue but there may be games played with exports and production below the surface.</p><p>I find it strange these stories of a rift are delivered month after month (usually in the WSJ) and they continue to work together.</p> This article was written by Adam Button at

ISM services survey highlights Monday's US economic calendar

Mon, Jun 5, 2023 12:38 PM

<p>The new week kicked off with a bang as OPEC+ delivered cuts through 2024 and Saudi Arabia pledged to lower production by 1m bpd in July, and maybe longer. WTI crude touched $75 only to fade back to nearly unchanged. It's up $1.82 to $73.55 now and it will be an interesting week for commodities.</p><p>What's holding them back is fear of a recession and a sluggish economy in China. Today's China services PMI from Caixin was at 57.1 in an improvement from 56.4 but many are looking for some real stimulus from Beijing.</p><p>In the US, the Fed is in the blackout period now and likely to skip hiking at the June meeting. The market is currently pricing a 30% chance of a hike and 70% chance of no change. That's likely to shift at 10 am ET when the ISM services report is released alongside factory orders. The ISM is the more-important release and forecast to improve to 52.2 from 51.9. Eyes will also be on the prices paid component, which was previously at 59.6.</p><p>For more, see the <a href="" target="_blank" rel="follow">economic calendar</a>.</p> This article was written by Adam Button at

ForexLive European FX news wrap: Dollar firms slightly, oil holds early gains

Mon, Jun 5, 2023 12:00 PM

<p>Headlines:</p><ul><li><a href="">Higher yields helping to underpin the dollar again in the new week</a></li><li><a href="">Eurozone June Sentix investor confidence -17.0 vs -15.1 expected</a></li><li><a href="">Eurozone May final services PMI 55.1 vs 55.9 prelim</a></li><li><a href="">Eurozone April PPI -3.2% vs -3.1% m/m expected</a></li><li><a href="">Germany April trade balance €18.4 billion vs €16.0 billion expected</a></li><li><a href="">UK May final services PMI 55.2 vs 55.1 prelim</a></li><li><a href="">Switzerland May CPI +2.2% vs +2.2% y/y expected</a></li></ul><p>Markets:</p><ul><li>USD leads, GBP lags on the day</li><li>European equities mixed; S&amp;P 500 futures flat</li><li>US 10-year yields up 6.1 bps to 3.754%</li><li>Gold down 0.3% to $1,941.37</li><li>WTI crude up 2.4% to $73.44</li><li>Bitcoin down 1.4% to $26,793</li></ul><p style="" class="text-align-justify">It was a decently slow session for the most part, with just a couple of economic releases to move things along in European morning trade.</p><p style="" class="text-align-justify">The dollar picked up from where it left off last week, moving higher as it is helped by the bond market once again. Treasury yields pushed higher and that is in turn helping to underpin the greenback during the session.</p><p style="" class="text-align-justify">Major currencies were initially lackluster in Asia but the dollar is now seeing slight gains on the day. EUR/USD is down 0.15% to 1.0690 while USD/JPY is up 0.2% to 140.25 at the moment.</p><p style="" class="text-align-justify">A more tentative risk mood isn't helping with commodity currencies, with the loonie also failing to enjoy the jump higher in oil prices today. In case you missed it, oil is benefiting from the OPEC+ surprise over the weekend <a href="" target="_blank" rel="follow">here</a>.</p><p style="" class="text-align-justify">USD/CAD is up 0.15% to 1.3445 and AUD/USD down 0.4% to 0.6585 on the day. The pound is the laggard, down 0.5% to 1.2380 near the lows as we look towards North America trading.</p><p style="" class="text-align-justify">There's still plenty to play for during the week as the central bank bonanza returns. The RBA will kick things off tomorrow before we get to the BOC on Wednesday. Thereafter, the focus will shift towards the Fed, ECB, and BOJ next week.</p> This article was written by Justin Low at

There are signs of de-dollarisation unfolding - JP Morgan

Mon, Jun 5, 2023 11:00 AM

<p style="" class="text-align-justify">The firm argues that while overall dollar usage is still holding within historical estimates, the usage was more "bifurcated under the hood". While the dollar's share of traded currency volumes is just a little off record highs, at 88%, there are other evident signs of de-dollarisation elsewhere.</p><p style="" class="text-align-justify">Of note, the firm notes that the dollar's share as part of global central bank FX reserves has dropped to a record low of 58%. That number is still by far and out the largest in the world but it has been slipping, not really helped by the challenges the dollar is facing in dealing with the likes of Russia and China in particular.</p><p style="" class="text-align-justify">An interesting thing to note in that pointer is that gold now comprises 15% of reserves as compared to just 11% five years ago.</p><p style="" class="text-align-justify">Besides that, JP Morgan also highlighted a decline in the dollar's role as part of global exports - in which the US share is now down to a record low of 9%. Meanwhile, for all the talk of countries wanting to be less dependent on China, their share has actually increased to a record high of 13%.</p><p style="" class="text-align-justify">Going back to the first paragraph on traded currency volumes, the euro is the biggest loser there as its share shrunk by 8% in the last decade to a record low of 31%. The yuan is once again a winner in that category, rising to a record high of 7%.</p><p style="" class="text-align-justify">However, JP Morgan says that the progress by Beijing to internationalise the yuan has been limited and that is unlikely to change much given the China's capital controls.</p> This article was written by Justin Low at

Dollar keeps in a good spot so far today

Mon, Jun 5, 2023 10:48 AM

<p style="" class="text-align-justify">Higher Treasury yields continue to play its part in underpinning the dollar today, as we continue from where we left off on Friday last week. The only difference is that equities aren't as enthusiastic but the technical picture for stocks is looking optimistic (see the charts below). Here's a snapshot of the Treasuries space at the moment:</p><ul><li>2-year yields up 4.9 bps to 4.551%</li><li>5-year yields up 6 bps to 3.901%</li><li>10-year yields up 5.4 bps to 3.746%</li><li>30-year yields up 4.9 bps to 3.931%</li></ul><p style="" class="text-align-justify">In turn, that is helping to keep the dollar bid this morning with EUR/USD down 0.2% to 1.0685 and USD/JPY in particular up 0.3% to 140.35 at the moment. But the moves are roughly similar to what we had at the start of the session <a href="" target="_blank" rel="follow">here</a>.</p><p style="" class="text-align-justify">Only the pound has slipped a little further alongside the antipodeans, with GBP/USD down 0.5% to 1.2385 and AUD/USD now down 0.4% to 0.6585 on the day.</p><p style="" class="text-align-justify">Elsewhere, gold <a href="" target="_blank" rel="follow">tested its 100-day moving average once again</a> and is seen holding above that - at least for now.</p><p style="" class="text-align-justify">In the equities space, the overall mood remains tentative with US futures keeping little changed in general. S&amp;P 500 futures are flat, Nasdaq futures down 0.2%, and Dow futures up 0.1%. However, the breakout move from Friday does provide scope for optimism:</p><p style="" class="text-align-justify">The S&amp;P 500 is looking towards testing the highs from August last year while the Nasdaq itself has broken that barrier, as tech stocks could be angling towards a stronger run to the upside on the back of the AI boom.</p> This article was written by Justin Low at

Eurozone April PPI -3.2% vs -3.1% m/m expected

Mon, Jun 5, 2023 9:00 AM

<ul><li>Prior -1.6%; revised to -1.3%</li><li>PPI +1.0% vs +1.4% y/y expected</li><li>Prior +5.9%; revised to +5.5%</li></ul><p style="" class="text-align-justify">Looking at the details, the large chunk of the decline on the month comes from energy (-10.1%) with a fall also observed in intermediate goods (-0.6%). That is offset by price rises in capital goods (+0.4%), durable consumer goods (+0.2%) and non-durable consumer goods (+0.3%). If you strip out energy, producer prices were only seen declining 0.1% on the month.</p> This article was written by Justin Low at

UK May final services PMI 55.2 vs 55.1 prelim

Mon, Jun 5, 2023 8:30 AM

<ul><li>Prior 55.9</li><li>Composite PMI 54.0 vs 53.9 prelim</li><li>Prior 54.9</li></ul><p style="" class="text-align-justify">Little change to the initial estimates as UK services activity continues to keep more robust in May. A strong rise in output and new work is helping to underpin the expansion. S&amp;P Global notes that:</p><p style="" class="text-align-justify">"Service sector businesses have experienced strong growth so far in the second quarter of 2023, fuelled by resilient demand for consumer and technology services, combined with a post-pandemic tailwind as households switched from spending on goods to services. Rising export sales were also reported in May, reflecting increased international visitor numbers and improving demand for business services from clients based in the US and Europe. </p><p style="" class="text-align-justify">"Job creation was maintained in May as service providers recruited additional staff in support of rising business requirements. Some firms noted a gradual improvement in candidate availability, likely reflecting a slowdown in hiring from the levels seen last year. </p><p style="" class="text-align-justify">"Intense wage pressures continued across the service economy, despite a moderation in employment growth. Higher salary payments more than offset lower fuel costs, which meant that overall input price <a href="" class="terms__main-term" id="ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa">inflation</a> edged up to its strongest for three months in May. Average prices charged by service sector companies nonetheless increased at the second-weakest pace since August 2021 amid some reports of greater price resistance among clients."</p> This article was written by Justin Low at

Eurozone June Sentix investor confidence -17.0 vs -15.1 expected

Mon, Jun 5, 2023 8:30 AM

<ul><li>Prior -13.1</li></ul><p style="" class="text-align-justify">Euro area investor morale darkens, dragged down by negative expectations for Germany. This won't do much to quell recession fears, especially when Europe's largest economy is showing notable softness as its manufacturing sector slumps heavily.</p> This article was written by Justin Low at

Gold runs into another test of key support to start the week

Mon, Jun 5, 2023 8:19 AM

<p style="" class="text-align-justify">A stronger dollar and higher yields have sent gold bugs reeling since the end of last week and the pressure is continuing today. The drop today now sees price run into yet another test of the 100-day moving average (red line), where we did see a bounce a week ago.</p><p style="" class="text-align-justify">It's not a good look to have seen the rebound last week so quickly invalidated. But from a technical perspective, buyers are still hanging in there at least.</p><p style="" class="text-align-justify">The key support pointed out above will act alongside the 50.0 Fib retracement level of the swing higher since March, seen at around $1,935. That will be an important region for sellers to try and break through in order to push the next downside leg towards $1,900.</p><p style="" class="text-align-justify">For now, <a href="" target="_blank" rel="follow">traders are quite convinced</a> that the Fed can stick with its narrative of keeping rates higher for longer. And as long as the conviction for a Fed pivot remains low, that should keep gold bugs at bay until the situation switches up.</p><p style="" class="text-align-justify">I'm still an advocate for buying the dip on gold in the long-term but you have to pick your levels. And this is perhaps one of the first few key tests of that conviction. I'd be more inclined on a further dip below $1,900 though, as that will really make an attractive proposition once the tide turns - which it should eventually, possibly in Q3 this year.</p> This article was written by Justin Low at

SNB total sight deposits w.e. 2 June CHF 519.0 bn vs CHF 516.7 bn prior

Mon, Jun 5, 2023 8:00 AM

<ul><li>Domestic sight deposits CHF 504.5 bn vs CHF 505.2 bn prior</li></ul> This article was written by Justin Low at

Eurozone May final services PMI 55.1 vs 55.9 prelim

Mon, Jun 5, 2023 8:00 AM

<ul><li>Prior 56.2</li><li>Composite PMI 52.8 vs 53.3 prelim</li><li>Prior 54.1</li></ul><p style="" class="text-align-justify">The lower revision was already predicated by the earlier readings. All of this just points to a slowdown in momentum in euro area services activity. This comes as demand conditions wane a little while higher price pressures are still weighing on sentiment. Looking at the overall performance, all the country releases today show an easing in activity (Spain: 4-month low, Italy: 4-month low, France: 4-month low, Germany: 2-month low). HCOB notes that:</p> This article was written by Justin Low at

Germany May final services PMI 57.2 vs 57.8 prelim

Mon, Jun 5, 2023 7:55 AM

<ul><li>Prior 56.0</li><li>Composite PMI 53.9 vs 54.3 prelim</li><li>Prior 54.2</li></ul><p style="" class="text-align-justify">The slight revisions lower aren't anything much as the German services sector continues to maintain a strong growth momentum in May. That said, high price pressures are still persistent and that is going to remain a headwind for the months ahead - as seen elsewhere across the region as well. HCOB notes that:</p> This article was written by Justin Low at

France May final services PMI 52.5 vs 52.8 prelim

Mon, Jun 5, 2023 7:50 AM

<ul><li>Prior 54.6</li><li>Composite PMI 51.2 vs 51.4 prelim</li><li>Prior 52.4</li></ul><p style="" class="text-align-justify">A slight revision lower to the initial estimates but it still shows a slowdown in French services activity. Demand conditions are seen waning while an acceleration in output price inflation isn't helping to lift the mood. HCOB notes that:</p> This article was written by Justin Low at

Italy May services PMI 54.0 vs 57.0 expected

Mon, Jun 5, 2023 7:45 AM

<ul><li>Prior 57.6</li><li>Composite PMI 52.0 vs 54.0 expected</li><li>Prior 55.3</li></ul><p style="" class="text-align-justify">Despite the miss on estimates, Italy's services sector continues to reflect modest growth even as overall conditions have softened. Business confidence remains positive but cost inflation remaining high is still a factor weighing on the mood. HCOB notes that:</p> This article was written by Justin Low at

Market Outlook for the Week of 5-9 June

Mon, Jun 5, 2023 7:17 AM

<p class="MsoNormal">Next week is anticipated to be relatively calm, although there are several significant economic events that warrant attention.</p><p class="MsoNormal">The week kicks off on Monday with two key events for the United States: the release of the ISM Services PMI data and the factory orders month-on-month (m/m) report. On Tuesday, all eyes will be on the RBA as they announce their decision on the cash rate and release the rate statement. RBA Governor Philip Lowe is scheduled to deliver a speech Wednesday at the Morgan Stanley Australia Summit in Sydney. This event might involve questions from the audience. Additionally, the GDP quarter-on-quarter (q/q) data for Australia will be published the same day.</p><p class="MsoNormal">For Canada, Wednesday brings the BoC rate statement, along with the announcement of the overnight rate. Thursday will see the final release of the GDP q/q data for Japan, which will provide a comprehensive assessment of the country's economic performance in the last quarter. In the United States, the focus will be on the weekly unemployment claims report.</p><p class="MsoNormal">Lastly, on Friday, Canada will release the employment change data and the unemployment rate, offering insights into the overall labor market conditions in the country.</p><p class="MsoNormal">The ISM Services Index printed above 50 in the past four months following a contraction period registered last year. For this week's data the consensus is for 52.6, which suggests that the services sector remains resilient to the economic headwinds. On the other hand, the outlook for the ISM manufacturing index is not as positive with the index contracting further in May, a trend seen for the past 7 months in a row.</p><p class="MsoNormal">At this week's RBA meeting the expectation is for the bank to maintain rates on hold. As a reminder, the RBA surprised the market last month with a rate hike even though inflation showed signs of cooling down. ING analysts think the Bank might hike again by 25bps this week, but others believe it's more likely the bank will wait until August for the quarter CPI data to come in, which seems to now weigh more than the monthly data in its decisions. Analysts from Citi expect two more hikes this year, in July and August, for a new final rate of 4.35%, up from 4.1%.</p><p class="MsoNormal">In Canada, the consensus for this week's meeting is for a hawkish hold. Lately the inflation data for the Canadian economy has proven to be more persistent and above expectations. The GDP was also strong and the labor market remains tight. The Governor stressed that if inflation poses upside risks they are prepared to hike again, but is also aware that monetary policy impact can be lagging. All eyes will be on any potential hints about a hike in July. As a reminder the BoC last hiked its interest rates in January and has been holding rates at 4.5% since then. Analysts from Scotiabank believe a 25bps is warranted for this week due to the high core inflation and economic growth.</p><p class="MsoNormal">USD/CAD expectations</p><p class="MsoNormal">On the H1 chart, USD/CAD looks good for selling opportunities from a technical perspective. The pair ended the week near the 1.3410 level of support and, if rejected, can go to test the resistance at 1.3550. If the price doesn’t manage to break through the resistance it could resume its downtrend and test the support at 1.3330.</p><p class="MsoNormal">Last week the CAD was supported by the rise in commodity prices, especially crude oil, with which it has a strong correlation.</p><p class="MsoNormal">This article was written by Gina Constantin.</p> This article was written by ForexLive at

Higher yields helping to underpin the dollar again in the new week

Mon, Jun 5, 2023 7:16 AM

<p style="" class="text-align-justify">The bond market was the one dictating the mood among major currencies at the end of last week. And that narrative is continuing today as well. USD/JPY caught a strong bounce on Friday towards 140.00 and is building on that, climbing another 0.3% to 140.39 at the moment:</p><p style="" class="text-align-justify">This comes as Treasury yields are moving higher again, with 10-year yields up 4.4 bps to 3.737% on the day. This builds on the momentum from late last week and we can see how that has shifted the curve in Fed funds futures from Friday (before the US jobs report) to today:</p><p style="" class="text-align-justify">And when you compare it to four weeks ago i.e. 11 May, you can see how the market thinking has shifted considerably. And that has been a pivotal factor in driving dollar gains over the past few weeks.</p><p style="" class="text-align-justify">For today, it's mainly a continuation to what we saw from Friday. It seems like even with all the "skip" talk by the Fed, traders are believing that they will stick to the higher for longer narrative.</p><p style="" class="text-align-justify">EUR/USD is down 0.2% to 1.0685 and GBP/USD down 0.4% to 1.2400 currently, with AUD/USD also seen down 0.3% to 0.6590 on the day.</p> This article was written by Justin Low at

Spain May services PMI 56.7 vs 56.9 expected

Mon, Jun 5, 2023 7:16 AM

<ul><li>Prior 57.9</li></ul><p style="" class="text-align-justify">The expansion in Spain's services sector remains robust, even if it is a slight moderation to April activity. The more favourable demand in services is helping to keep things more optimistic at least so far in Q2. HCOB notes that:</p> This article was written by Justin Low at