- Streak of downbeat US data
- PMIs decline in Europe, US and Asia
- Australian dollar pressured by RBA’s dovishness
US - PMIs within a striking distance of contraction threshold
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Open account Try demo Download mobile app Download mobile appA few important readings from the United States were scheduled for this week and they showed quite a downbeat picture. The PMI indices took a major dive lower in May and the US manufacturing gauge now sits at the lowest level since mid-2016 (50.6 pts). The preliminary durable goods orders showed a bigger than expected drop and housing market data released this weak also turned out to be weaker than forecasted. Such results does not bode well for the future but Fed seems to be devoted to its “patient approach” as highlighted in Minutes from the latest meeting. However, that meeting took place before the latest escalation of the trade war and central bankers may address the issue as well as deterioration in the domestic data during the next meeting (19 June).
US durable goods orders dipped into the negative territory on the annual basis. Source: Macrobond, XTB Research
Asia - Japanese PMI plunges into contraction area
When it comes to the hard macroeconomic data from Asia released this week, we were only offered some noteworthy readings from Japan. Trade data for April came in mixed and machinery orders for March improved. Nevertheless, those were overshadowed by a plunge of the manufacturing PMI into the contraction area. While such an outcome can be seen as currency-negative, the Japanese yen managed to move higher throughout the week fuelled by trade war concerns. Elsewhere, Australian dollar moved lower on Wednesday as RBA minutes showed a dovish tilt.
Europe - German manufacturing sector’s suffering continues
Just like in the other parts of the world, the release of the PMI indices was also the focal point of the European economic calendar. Any hopes of improvement were smashed with the release of the German manufacturing PMI. The German index deepened decline to 44.3 pts and remained near levels not seen since late-2012. On the other hand, ECB Minutes released on Thursday did little to move markets and were largely overlooked by investors.
DE30 pulled back to the upward sloping trendline and 50-session moving average. However, given recent domestic data the decline is more than justified. Source: xStation5
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