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01:00 Australia Consumer Inflation Expectation
May +2.2% +2.3%
01:45 China HSBC Manufacturing PMI (Preliminary) May 50.4 50.5 49.6
05:00 Japan BoJ monthly economic report May
The Dollar Index touched an almost three-year high before U.S. data forecast to show jobless claims decreased and home sales rose, adding to the case for the Federal Reserve to reduce monetary stimulus. U.S. government data due today may show the world's biggest economy is picking up. The number of applications for unemployment insurance payments probably fell to 345,000 in the week ended May 18 from 360,000 the prior week, according to the median estimate of economists surveyed by Bloomberg News.
Sales of newly built houses increased to a 425,000 annualized rate in April, a three-month high, from 417,000 a separate poll of economists shows.
The greenback strengthened against most major peers and Treasury yields rose to the highest in two months after Fed Chairman Ben S. Bernanke said yesterday the central bank may taper monthly bond purchases if it's confident of sustained gains in the economy.
Australia's dollar slid to an 11-month low as a private report showed China's manufacturing is contracting for the first time in seven months. The preliminary reading of a Purchasing Managers' Index for China's manufacturing declined to 49.6 in May from 50.4 the previous month, HSBC Holdings Plc and Markit Economics said today. The level of 50 is a dividing line between expansion and contraction.
Separate reports from Markit Economics will probably show today that contraction in the German and French manufacturing industries is continuing. The purchasing managers' index for Germany (PMITMGE) is estimated at 48.5 from 48.1 in April and that for France (PMITMFR) at 44.7 versus 44.4, according to economist projections.
The yen gained on speculation its two-day slide was excessive. The yen's 14-day relative strength index versus the dollar was 34, after yesterday touching 30, which indicates an asset's price has fallen too rapidly and may be poised to reverse course. The Japanese currency's RSI against the euro was 39.
EUR / USD: during the Asian session the pair fell to $ 1.2825
GBP / USD: during the Asian session the pair fell to $ 1.5010
USD / JPY: during the Asian session the pair fell below Y103.00
Focus this morning will be on the release of flash EZ PMI data (France at 0658GMT, Germany 0728GMT, EZ 0758GMT). Data viewed as more forward looking with market looking to see if it signals improvement in recently released soft GDP data in Germany and France. Fed Bullard speaks in London at 1005GMT, with US weekly jobless at 1230GMT to provide afternoon focus.
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