02.06.2008 16:31

European session: the market is waiting ISM data

the next data was issued
07:45 Italy PMI (May) 48,0 48.2
07:50 France PMI (May) 51,5 51.3 51.1
07:55 Germany PMI (May) seasonally adjusted 53,6 53.5 53.6
08:00 EU(15) PMI (May) 50,6 50.5 50.7
08:30 UK Consumer credit (April), bln +0,9 +1.0 +1.2
08:30 UK M4 lending (April) final, bln +27,9 +26.0
08:30 UK M4 money supply (April) final Y/Y 11,1% 11.2%
08:30 UK M4 money supply (April) final 0,6% 0.7%
08:30 UK CIPS manufacturing index (May) 50,0 50.5 51.0

The pound dropped the most in four weeks versus the dollar after Bradford & Bingley Plc, the U.K.'s biggest mortgage lender to landlords, said it will raise more capital because of widening bad-debt provisions. The yen rose as stocks declined, eroding demand for higher-yielding currencies funded by purchases of the Japanese currency.

The euro reversed declines versus the dollar after European Central Bank council member Miguel Angel Fernandez Ordonez wrote in an editorial in Spain's El Pais newspaper that policy makers are committed to combating inflation.
The dollar snapped a five-day rally against the yen on speculation an industry report today will show U.S. manufacturing contracted for a fourth month. The Institute for Supply Management's factory index, due at 1400GMT, fell to 48.5 in May from 48.6 in the previous month, according to a separate survey. That would be the fourth month below 50, indicating a contraction.
EUR/USD: Opened in early Europe around $1.5531. European dealing was mixed, rate initially extending lows on the day down to $1.5515 as the dollar found early favour, a bounce from here taking the pair back to $1.5540. Asian demand later in the morning provided the momentum for a push to $1.5568, with euro-dollar easing back from here to go into US trade around $1.5530. Bids $1.5505/95, stops under $1.5480, bids $1.5460/50, offers $1.5580
GBP/USD: Opened early Europe at $1.9717. Sterling came under further pressure in Europe, while cable broke under $1.9700. Triggered stops took cable to $1.9720, release of disappointing CIPS PMI taking it to $1.9697. Cable recovered to $1.9650 but continued supply kept pressure on, closing the morning around $1.9718.
USD/JPY: Opened in early Europe around Y105.35. Dollar-yen also slipped back as UK financial stocks took a hit, risk-reduction creeping in as the pair triggered stops under Y104.90 en-route to Y104.66. Dollar-yen ended the morning around Y104.80 while euro-yen bounced from Y162.73 to end around Y163.00. Dlr-yen bids Y104.60, Y104.40, stops below, offers Y104.90/00, Y105.50The Institute for Supply Management's factory index, due at 1400GMT, fell to 48.5 in May from 48.6 in the previous month, according to a separate survey. That would be the fourth month below 50, indicating a contraction.