Following the previous week’s choppy action, markets remain subdued on the first trading day of June.
Manufacturing PMI Data in Focus
S&P Global will release revisions to May Manufacturing PMI data for Germany, the Eurozone, the UK, and the US on Monday. Later in the day, the ISM Manufacturing PMI report will be featured in the US economic docket, alongside Construction Spending data for April.
Inflation Insights
The US Bureau of Economic Analysis reported on Friday that inflation, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose 2.7% on a yearly basis in April, matching the March increase and market expectations. In the same period, the core PCE Price Index increased 2.8% as forecast.
The US Dollar struggled to preserve its strength following the PCE inflation data. After registering small losses for the week, the DXY Dollar Index was holding steady above 104.50 in European markets. Meanwhile, US stock index futures are trading in positive territory at the beginning of the week.
Currency Market Movements
EURUSD edged higher on Friday and closed the week virtually unchanged. The pair held steady at around 1.0850 at the start of the European session.
GBPUSD failed to make a decisive move in either direction in the previous week. The pair fluctuates in a narrow channel slightly below 1.2750 early Monday.
Bank of Japan Executive Director Takashi Kato said on Monday that the BoJ has no plans to immediately unload its exchange-traded funds (ETF) holdings. USDJPY ignored those comments and was last seen trading flat near 157.30.
Global Market Reactions
The data from China showed that the Caixin Manufacturing PMI edged higher to 51.7 in May from 51.4 in April. This reading came in slightly better than the market expectation of 51.5.
The AUDUSD pair showed no reaction to this data and was last seen trading marginally lower at 0.6640, with the Australian Dollar flat, while US Dollar improves ahead of ISM PMI.
Gold spent the previous week moving up and down in a narrow channel. XAUUSD continues to move sideways above $2,320 to start the new week.
