Daily Update - 2nd June 2020
U.S. manufacturing activity eased off an 11-year low in May, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen, though the recovery from the COVID-19 crisis could take years because of high unemployment. It comes after China’s Caixin/Markit Purchasing Managers Index (PMI) showed a marginal but unexpected improvement in factory activity last month. In the euro zone, the manufacturing PMI recovered somewhat in May from April’s record low, although factory activity still contracted heavily. Japan and South Korea, however, saw the sharpest falls in activity in more than a decade. AUD - RBA Rate Decision For the EUR, it’s a relatively quiet day ahead on the economic calendar. Unemployment figures are due out of Spain later this morning. We don’t expect the numbers to have a marked impact on the EUR, however. The markets expect the COVID-19 recovery plan to support a pickup in hiring in the months ahead. Spain is likely to be a major beneficiary of funds from the EU. Away from the economic calendar, risk aversion could pin the EUR back in the early part of the day. For the Pound, it’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction. A lack of stats will leave market sentiment towards COVID-19, Brexit and the economic outlook to be the key areas of focus. Across the Pond, it’s also a particularly quiet day ahead on the U.S economic calendar. There are no material stats due out of the U.S to provide the Greenback with direction. A lack of stats will leave the market focus on geopolitics as China and the U.S continue to face off. There will also be increased concern over the extended riots and the possible use of military force.Yesterday’s Market
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