Intraday Market Thoughts

UK Manuf PMI at 3-yr low, NFP Is Next

by Patrik Urban
Jun 1, 2012 12:57

China PMI fell; UK manufacturing PMI dropped; Swiss retail sales and PMI declined; Eurozone unemployment steady and PMI revised higher. Market turns to NFP, Ashraf's prediction is +70K. unemployment rate, personal spending and Canadian GDP. See the latest on our current Intermarket Insights below.

Trading during the Asian session was influenced by manufacturing PMI from China that fell in May to 50.4 from 53.3. The Aussie was initially sold across the board but later recovered. Otherwise ranges were relatively narrow.

USD buying started yet again right after the London session began.

Fundamentals did not provide a reason why the sentiment should change so all majors were quickly sent below their yesterday's lows against the buck.

GBPUSD dropped to 20 week low at 1.5269 on the back of much weaker than anticipated UK manufacturing PMI data that fell sharply in May to 45.9 from 50.2, reaching the weakest print in three years. Manufacturers cut back output and employment as new orders dropped at the fastest pace since 3/2009. Orders slowed not only from Europe but also from Asia and the US. More QE now seems nearly inevitable.

From other news we learned that Swiss retail sales declined in April to 0.1% from previous 4.7% y/y and SVME PMI fell to 45.4 from 46.9. Eurozone unemployment rate remained unchanged in April at 11% and manufacturing PMI was revised marginally higher to 45.1 from initial 45.0.

The result of the Irish referendum on the fiscal pact will be announced later today.

The US session starts at 8:30 am with May NFP report that is expected to rise to 151K from previous 115K while the unemployment rate is seen steady at 8.1%. Personal spending is anticipated stable at 0.3%.

ISM manufacturing is due at 10:00 am ET and it is anticipated lower in May at 54 from previous 54.8. See Ashraf's IMT for detailed explanation why it is likely to disappoint.

Canadian data is limited to March GDP which is expected to grow 0.4% from previous -0.2% m/m and 1.9% from 1.6% y/y.

Ashrafs Premium Intermarket Insigts stick with the 2 outstanding shorts in EURUSD and AUDUSD; 1st objective in EURUSD short is at 1.23. USDCAD long is done at 1.0360. For direct access to our remaining trades, click here ; Non Subscribers can join here:


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