5/31/2021 10:18:36 AM GMT
Notes/Observations
- CPI reading from Spain and Germany saw the YoY above ECB target level.
- Various German States saw their May inflation data registered its biggest increase since fall 2018 mainly due to the base effect from higher energy prices.
- China PBoC takes action to curb recent CNY currency strength.
- US and UK markets closed for holidays.
Asia:
- China May Manufacturing PMI (Govt Official) registered its 14th month of expansion (51.0 v 51.1e).
- China PBOC sets the Yuan reference rate at 6.3682 for its strongest fixing since mid-May 2018).
- Former China PBOC official Sheng Songcheng said fast yuan appreciation probably will not last, suggests the Yuan is overbought ; says the rise in CNY suggests short-term speculation.
Deficit to -USD 85.2 billion, from a previous -
USD 92.0 billion. US Personal Income in May was at
-13.1%, beating median forecasts at -14.2%. Chicago’s PMI rose
to 75.2 from
67.9.
EUR/USD – The Euro initially slid to an overnight low at 1.21326 in early trade following the release of the US PCE inflation report. Other US economic reports were mixed and saw the single currency rally to close at 1.2190, near its overnight high but little changed from Friday’s 1.2197.
GBP/USD – Sterling, like the Euro dipped to 1.41361 overnight low before lifting toward the close of trade to a 1.4190 finish, from 1.4200 in early Friday. The Pound, like the Euro closed near its overnight peak (1.42056).
5/28/2021 3:26:19 PM GMT
US inflation continues heating up, but the Fed will stay on hold.
Economic progress at both shores of the Atlantic spurs optimism.
EUR/USD is under strong selling pressure and poised to extend its slump.
The EUR/USD pair surged to 1.2266 this week, its highest since January, but trimmed gains ahead of the close, to end it in the red around 1.2180. A scarce macroeconomic calendar and the absence of explosive news maintained major pairs within limited ranges.
Financial markets rotated around US inflation expectations and their possible effects on the current monetary policy. However, Federal Reserve officials succeeded in cooling hopes for a soon-to-come tightening, leaving speculative interest without its main motto. On the other hand, the little American data published these days showed that the economic recovery is underway. Weekly unemployment claims fell to 406,000, its lowest reading since March 2020, while the Q1 Gross Domestic Product was confirmed