EUR/usd
The US S&P 500 keeps suffering losses. Yesterday it decreased by other 1.3%. The stock bulls have a cause for concern. First of all, the ADP statistics proved to be worse than expected, showing employment growth in the private sector by 135K in May against the forecasted 171K. Of course, it's better than the increase reported in April – 113K (revised down from 119), but it is too little to speak with confidence about steady growth. Anyway, in the Fed's Beige Book, which was published later yesterday, market observers noted a surer growth, varying “from modest to moderate”, in 11 regions. Dallas distinguished itself with “strong” growth. We get a dangerous situation, when fresh economic indicators start limping, but lagging indicators in the meantime paint a pretty picture. The most remarkable thing in the report, in our opinion, is a comment that reduction of government spending at the end of the last year and at the beginning of this one didn't lead to a sharp decrease in business and consumer activity. Of course, it's not bad, but what shall we do with employment which keeps growing at the below-the-trend pace? With such growth unemployment will decrease equally due to creation of new jobs and to reduction in the number of job seekers. Probably, the Fed expected an even worse scenario and are now going to speed up job creation in the coming months, or to toughen the policy not to cause disbalance in some markets. ISM Non-Manufacturing PMI, published yesterday, indicates that things are good rather than bad. Growing from 53.1 to 53.7, this index marked increase in business activity. Today attention of the markets will be focused on the ECB press conference and statistics on unemployment claims.
GBP/USD
We keep getting good news regarding the sterling. In May the Services PMI unexpectedly grew to 54.9, the highest rate since March 2012. Undoubtedly, the fact, that all the three PMIs for the key economic sectors (services sector, manufacture, construction) indicate growth, promises positive results in the second quarter. Besides, already now these data support the pound. Confidence, that the MPC doves will exhaust all arguments if not at the next meeting, then in the coming months, is growing. gbpusd is already at 1.54, which is the highest level since May 10. If good news keeps coming, the pair will probably test 1.56 again.
USD/JPY
Vigilance regarding the stock market and the dollar doesn't allow usdjpy to resume growing. The pair is now close to 99.10 and NIKKEI is sliding down, following the US exchanges. In the first decade of May the pair hit the support at 98.50. Let's see if it will find it again.
AUD/USD
Selling of the aussie didn't stop after reaching the lows of the end of May. The pair is now at 0.9450. The decline is mainly driven by the slump of the Asian exchanges and strengthening of the yen. Even the trade balance stats, where the surplus made 30bln against the expected 200, didn't help here. Remember that the nearest target of the bears is the low of 2011 at 0.9387 – now the pair is 70pips away from it.
