Forex news and trading headlines 1 June 2015

The data

  • May 2015 Spanish manufacturing PMI 55.8 vs 54.5 exp
  • May 2015 Swiss manufacturing PMI 49.4 vs 47.8 exp
  • May 2015 Italian manufacturing PMI 54.8 vs 53.6 exp
  • May 2015 French Markit manufacturing PMI final 49.4 vs 49.3 exp
  • May 2015 German Markit BME manufacturing PMI final 51.1 vs 51.4 exp
  • May 2015 Eurozone Markit manufacturing PMI final 52.2 vs 52.3 exp
  • May 2015 UK Markit CIPS manufacturing PMI 52.0 vs 52.5 exp
  • May 2015 Brandenburg CPI 0.6% vs 0.3% prior y/y plus Hesse and Bavaria
  • May 2015 Saxony CPI 0.8% vs 0.6% prior y/y
  • May 2015 North Rhine Westphalia CPI 0.7% vs 0.3% prior y/y

The news

  • RBA's Edey says the Sydney housing market is a risky situation
  • It's 5 minutes to midnight for Greek banks says ECB's Dombret - Livesquawk
  • EU's Junker says Hungary death penalty law is grounds for EU expulsion - Livesquawk
  • Phone call yesterday between Merkel, Hollande and Tsipras took place in a "constructive atmosphere"
  • Germany's Roettgen says he can not see EU treaty change as a "realistic option" within 2 years
  • Eurogroup ready to meet early on Greece if needed

The analysis

  • Better data, lower euro, what's going on?
  • Upbeat manufacturing is of no comfort to the euro
  • The pound is closing in on some interesting tech levels
  • Option expiries for the 10am (15.00gmt) New York cut 1 June 2015

A sedate start to European trading saw moderate dollar selling and USDJPY slip from the Asia highs at 124.34 to 123.94 as Japanese vehicle sales came in weaker than the 5.0% gain seen in April, and came in only up 1.4% y/y. The Euro and pound both ran higher up to the first of the EU session data and then it was all down hill

Spain was first of the majors out of the gate with manufacturing data, and an 8 year high was posted. The first of the German regional inflation data showed a decent year on year jump and together the numbers should have pushed the euro higher. The opposite happened and EURUSD fell. European bond yields were the likely culprit as they rose as the data came flooding out, Netherlands, Italy, Switzerland all showed manufacturing improving and EURUSD carried on falling. Only misses for Germany and the main Eurozone number stopped the rot for a while and after breaking below 1.0900 to the 1.0892 low ,did we bounce back to 1.0927

The pound followed suit and the slight miss on the manufacturing PMI saw drop from 1.5270 to 1.5220 before we headed lower to test 1.5200 as I write this. We've nudged 3 pips below and have a clutch of technical levels just under the big figure

USDJPY has been doing nothing after the initial drop and is not straying far from the 124.00 level. They yen has been in demand all morning in the crosses with both EUR and GBP vs JPY both down a hefty chunk. GBPJPY has lost nigh on 150 pips from a fail at 190 and EURJPY lost just under 100 pips from around 136.00

US manufacturing and price data tops the bill in the US session with both the Markit final and ISM out after PCE data. You can find the data due here