• Chinese stocks rise 3.4% to 10 month closing high
  • Russian May manufacturing PMI 45.3 from 43.4 in April, 7 month high
  • Spanish May manufacturing PMI 39.8 vs 34.6 in April, 9 month high
  • Swedish May PMI 43.7 from 38.8 in April, better than median forecast of 40.2. Fifth monthly rise in a row
  • Irish May manufacturing PMI 39.4 from 39.1 in April, 7 month high
  • Italian May factory PMI 41.1 from 37.2 in April, better than median forecast 39.5. Highest read since September 2008 and biggest monthly rise ever
  • Final reads for French, German, Euro zone May manufacturing PMI all came in better than flash numbers/median forecasts. French 43.3 vs 43.1 flash/median forecast, German 39.6 vs 39.1 flash/median forecast, Euro zone 407 vs 40.5 flash/median forecast
  • UK May manufacturing PMI 45.4 vs revised 43.1 in April, better than median forecast of 44.0 and highest in a year
  • Spain’s May car sales -38.7 y/y vs -45.6% in April. Hey, another improvement
  • Fed’s holdings of treasuries on behalf of central banks and insitutions rose by $68.8 bln, or 3.3%, in May – Bloomberg

USD saw further across the board weakness in a lively morning session. Risk appetite is strong with equities (S&P futures up over 14 points at writing) and commodities seeing good gains.

We had a run of European PMI data which all exceeded expectations (see above.), bolstering sentiment. This has benefitted the likes of sterling, aussie, euro.

The USD is also being underminned in it’s own right by worries concerning the burgeoning US budget deficit, it’s funding, steep US yield curve. The USD even lost a fair amount of ground to the JPY.

EUR/USD started around 1.4130 and reached a session high 1.4246 before settling back a little. Aggressive Russian buying was noted early on. Stops triggered just above 1.4200 accelerated the move.

Cable just took off like a rocket, right from the get go. At one stage it was up a full two cents, before settling back a little, presently at 1.6375 from an opening around 1.6230.

AUD/USD saw an early rally slow on approach of .8100 and barrier option interest, but it didn’t take too long before that was taken out and buy stops just above triggered. We’ve been upto .8135 before retracing lower, presently at .8105.

USD/JPY saw losses accelerate when sell stops at 94.80 were triggered sending the pairing to a session low 94.46. Sources had reported buy orders down at 94.40/60 and they’ve been enough to soak up the pressure and we’re back up at 94.80. That’s still down some 35/40 points on the day.