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Euro soars as US burns

Euro soars as US burns

The Euro is trading at two-month highs against the US dollar as traders zero in on a 750 billion Euro stimulus fund as an important driver of the continental economy. In the US more than 20 cities have imposed curfews in response to widespread rioting, pushing US stock futures into the red this morning. Oil markets continue to climb on reports the OPEC+ grouping will meet earlier than planned to extend production cuts.

A full market calendar will keep analysts busy today. The CBA Australia manufacturing PMI showed a modest improvement this morning, but remains in contraction territory. Australian house prices dropped 0.5% in May, and company profits in Japan slumped 32% in the first quarter. The numbers could prompt cautious trading. 

The Caixin China manufacturing PMI is due around mid-session. The consensus estimate is 49.6, up from last month’s 49.4. Any positive surprise could lift sentiment as it would support the post-lockdown “snapback” narrative.

On Friday night the US President promised strong action on Hong Kong, but provided few details. It’s widely expected that the US will withdraw Hong Kong’s special trading status, but other sanctions are also on the table. The back and forth between Beijing and Washington will likely drive markets this week.

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