02.06.2014 - Markets are waiting for the ECB meeting on June 5
of euro rose slightly on Friday on the background of statistics from America,
where personal consumer spending fell in April by 0.1%, compared with an
expected a 0.2% rise. At the same time, consumers’ personal income increased by
0.3%, in line with analysts' forecasts. Among the important statistic is also
worth noting the drop in retail sales in Germany by 0.9%, which caused a
decline of the euro at the beginning of the trading session on Friday, and the
growth of Chicago manufacturing PMI to 65.5, which is 2.5 higher than the
forecast. Today, the course of trading may be affected by the data on the
consumer price index in Germany, the manufacturing PMI in the euro area (08:00 GMT)
and the USA in May (14:00 GMT), as well as data on construction spending in the
U.S. (14:00 GMT). This week in the center of attention will be the ECB meeting
on June 5 at which may be decided to apply new measures to combat the low
inflation, which will lead to further decline of the euro. We keep medium and
long term neg
The price of the British pound followed the euro and rose on Friday, but at this point is corrected downwards. Today, the focus will be on data concerning the UK manufacturing PMI, the volume of mortgage approvals and lending to individuals (8:30 GMT). There are no fundamental reasons for further decline of the British pound and considering growth indicators of the economy, a positive trade balance and the reduction of unemployment, we maintain long-term and medium-term positive outlook for the pound.
The Japanese yen weakened on Friday, and again is consolidating near the strong level of 102.00. On Friday was released the big block of statistics, according to which the volume of industrial production in April fell by 2.5%, while household spending declined by 4.6%. The key indicator has become the data on inflation, which rose to 3.2% that was triggered by an increase in the sales tax by 3% to 8%. According to today's data, the manufacturing PMI in Japan remained unchanged at 49.9, indicating a slight deceleration. Tonight (23:50 GMT), we should pay attention to data on money supply in May. We expect a further weakening of the yen in the medium and long term, but do not exclude the price correction today.
The price of the Australian dollar resumed a downward movement after the release of data on the construction sector, where the number of new construction permits fell in April by 5.6%, against an expected growth by 2.1%. It should be noted that the Reserve Bank of Australia is expecting the growth in the construction sector while falling in the mining sector. At the same time manufacturing PMI rose in May to 49.2, against 44.8 April. Increase in volatility is expected tomorrow after the release of data on retail sales in April and the balance of payments of Australia in the 1st quarter, as well as statements of the Reserve Bank of Australia. We expect a further decline in the Australian dollar in the medium term.
The price of the New Zealand dollar fell slightly against the weakening of the Australian currency. Traders expect increased volatility of a pair tomorrow, after the release of data on the non-manufacturing and manufacturing PMI in China. The growth of the New Zealand currency is limited because of the statement of the Reserve Bank of New Zealand on its readiness to fight the high exchange rate of the national currency amid the low export prices. We expect a further decline in the medium term.