Daily Market News 2 June 2011

Yesterday's Market Movers

  • From the UK we had PMI Manufacturing figures which showed the biggest decrease for 20 months for May. Sterling dropped below 1.14 levels against the Euro from this information. The figure came in at 52.1 from 54.3 the figures have indicated that the bank of England will keep interest rates at a record low of 0.5% till early next year.
  • As well as this we had UK Mortgage approvals for April, this came in lower than expected at 45k from 47k approvals for the month this was the lowest levels since December last year. These figures had an impact on Sterling making it drop to a one month low against the Euro.
  • The US also had low readings such as the ADP employment change which only came in at an increase of 38k from an expected 178k this was the worst reading since September last year, this figure is very closely linked to the Non-Farm payroll figure so it is possible we could see a negative output for non-farm on Friday where it may not hit expectation also.
  • ISM Prices Paid, ISM manufacturing and Construction spending all fell showing that the US economy is slowing and could take a long time to recover. GBP-USD stayed in range between 1.6373-1.6495 as the markets went back to fundamentals from the figures. Surveys have also mentioned that from a string of poor figures from US this has added speculation that the US will not raise interest rates until the first quarter of 2012.

Today’s Market Movers

  • There are no figures in the Euro-zone as it is a bank holiday.
  • From the UK we have PMI Construction figures. This is expected to come out slightly better although the markets may anticipate a decrease as the PMI Manufacturing yesterday was so low. These figures are combined so it will be interesting to see the outcome. If the figures come out worse we could see Sterling fall again against the Euro and the US Dollar.
  • From the US we have Factory Orders for April; these figures are expected lower at -0.3% from a 3.0% previous. This is a manufacturing figure for the US so if the figures come out lower than expected we could see the US dollar weaken for a consecutive day if it comes out higher we could see it strengthen slightly.