Data on Friday revealed that unemployment in the euro zone rose to a record high, causing the euro to fall off from its three week highs against the US dollar.

Alongside the unemployment rate rising to a record 12.2% in April, further pressure fell on the euro as retail spending in Germany fell in April. The rate of inflation however rose to 1.4% in May.

Data on Friday revealed that unemployment in the euro zone rose to a record high, causing the euro to fall off from its three week highs against the US dollar.

Alongside the unemployment rate rising to a record 12.2% in April, further pressure fell on the euro as retail spending in Germany fell in April. The rate of inflation however rose to 1.4% in May.

Data from the US showed that consumer spending fell by 0.2% in April for the first time in almost a year. Initially the US dollar weakened off the back of the news but losses were limited as the drop in spending partly reflects a drop in gas prices. Later in the afternoon, the dollar erased its losses and strengthened as consumer sentiment rose to its highest in 6 years.

First quarter GDP figures revealed that Canada grew by 2.5%. However the data did little to relieve recent pressure on the Canadian dollar as investors continue to be cautious on the outlook on the nation amid speculation that exports may well fall in the second quarter. Uncertainty surrounding the appointment of the new Bank of Canada Governor can also be credited to the weakness of the Canadian dollar.

Looking ahead to the week, interest rate decisions from the Bank of England and European Central Bank will be in focus. But investors will no doubt pay particular attention to Friday’s non-farm payroll figures from the US, which are expected to show that 168,000 new jobs were added in May. A good print here would once again incite speculation of tapering of the Fed’s monetary stimulus programme.

Overnight we had data reveal that manufacturing in China contracted in May to its lowest level since October 2012, as a result we have seen risk appetite demise, with stock markets falling across the world.

Today the manufacturing sectors of the UK, euro zone and the US will be in the spotlight with data from all three economies set to show an improvement.

Key Announcements:

8.43am – EUR – Italian Markit Manufacturing PMI (May): Expected to improve to 45.8.

8.48am – EUR – French Markit Manufacturing PMI (May): Expected to improve to 45.5.

8.53am – EUR – German Markit Manufacturing PMI (May): Expected to improve to 49.

8.53am – EUR – Euro zone Markit Manufacturing PMI (May): Expected to remain at 47.8.

9.30am – GBP – Markit Manufacturing PMI (May): Expected to improve to 50.1.

13.58pm – USD – Markit Manufacturing PMI (May): Expected to improve to 49.

15.00pm – USD – Construction Spending (April): Expected to improve to 1%.

15.00pm – USD – ISM Manufacturing PMI (May): Expected to weaken to 50.5.