ECONOMIC DATA BACK IN FOCUS ON MONDAY
The global financial markets will once again turn to the economic calendar on Monday with headline reports from Europe and the United States set to take precedence.
Action begins a 07:00 GMT with a report on Spanish unemployment. Spain’s unemployment levels plunged by nearly 87,000 for April. A similar reading for May would signal to investors that Spain’s economy is gradually improving.
Switzerland’s government is also expected to report on employment Monday, although no schedule has been announced.
Sentix will release its monthly investor confidence index at 08:30 GMT. The report is based on a survey of more than 1,600 financial analysts and institutional investors across the euro area.
At 09:00 GMT, the European Commission’s statistical agency will report on producer inflation for the month of April. Factory-gate prices are forecast to rise 0.4% month-on-month, which translates into an annualized rate of 2.4%.
Shifting gears to North America, NAPM-New York will release the ISM New York business conditions index for the month of May. The monthly report provides a snapshot of business conditions in the New York region.
At 14:00 GMT, the US Department of Commerce will report on factory orders, which is used to gauge overall demand for durable and non-durable goods. Orders for factory goods are projected to fall 0.3% in April after rising 1.6% the month before.
Economic data was a major catalyst for currencies and stocks on Friday after US nonfarm payrolls came in much better than expected. The US economy added 223,000 jobs for May as the unemployment rate dipped to a new multi-decade low of 3.8%.
The economic calendar heats up later this week with reports on Eurozone GDP, Chinese trade and Canadian employment.
Europe’s common currency edged higher on Monday, picking up where it left off last week. EUR/USD is trading at 1.1674, having gained 0.1% from the previous close. The pair touched a high near 1.1730 last Thursday but has been unable to replicate those levels. Immediate support is located at 1.1642, the low from 1 May. On the opposite side of the ledger, Thursday’s swing high represents the first line of resistance.
Cable was off to a positive start on Monday, as prices rose 0.1% to 1.3363. The currency pair is trading at its highest level since 24 May, though underlying momentum remains weak. GBP/USD faces immediate support at the 1.3300 level. On the opposite side of the ledger, the 22 May swing high of 1.3472 is likely to provide strong resistance.
The USD/CAD exchange rate stabilized on Friday following a series of volatile moves. The pair is currently trading in the mid-1.2900 range. The loonie is heavily influenced by commodity prices, whereas the greenback is still benefiting from expectations of rising interest rates.