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03.07.2013 12:00

European session: the British Pound has increased markedly


01:00 Australia HIA New Home Sales, m/m May +3.9% +1.6%

01:30 Australia Retail sales (MoM) May +0.2% +0.4% +0.1%

01:30 Australia Retail Sales Y/Y May +3.1% +2.3%

01:30 Australia Trade Balance May 0.03 0.05 0.67

01:45 China HSBC Services PMI June 51.2 51.3

07:50 France Services PMI (Finally) June 46.5 46.5 47.2

07:55 Germany Services PMI (Finally) June 51.3 51.3 50.4

08:00 Eurozone Services PMI (Finally) June 48.6 48.6 48.3

08:30 United Kingdom Purchasing Manager Index Services June 54.9 54.6 56.9

08:30 United Kingdom BOE Credit Conditions Survey Quarter II

The euro exchange rate fell sharply against the dollar, but later was able to recover some lost positions. Note that the dynamics of trading was influenced by weak PMI data in the service sector in the eurozone. Only Spain and France was able to make positive note in today's report services PMI, but the Germany and the eurozone as a whole have disappointed investors, which helped strengthen the bearish sentiment.

As the results of the final studies, which were presented to Markit Economics, the results of last month to reduce activity in the private sector of the euro area has slowed down, which was associated with a slower decline in employment and the number of new orders.

According to the report, the composite output index, that measures activity in the manufacturing and services sectors, rose in June to a level of 48.7, up from 47.7 in May. However, despite this significant improvement, the latter figure, after all, was slightly below the pre-assessment at the level of 48.9, indicating that the rate of decline was greater than anticipated. Recall that the value of this index is below 50 suggests contraction in activity. The composite index remains below this threshold for 17 consecutive month, but recent rate of decline in business activity in the private sector were the weakest in the past 15 months. Meanwhile, the data showed that the index of business activity in the services sector rose in June to the level of 48.3 from 47.2 in May, which was lower than the preliminary estimate at around 48.6.

Also note that the recent events in Portugal and Greece have added a negative. News about the growth of bond yields in the debt markets boosted concern among traders ahead of tomorrow's ECB meeting. As it became known, the yield on 10-year Portuguese bonds exceeded the psychologically important level of 7% (after Monday was less than 6.5%) and continues to grow, now residing at 8%. Portugal shares lost 5.6% this morning.

Value of the pound has increased significantly against the U.S. dollar, which has helped to publish a report on Britain. As the results of recent studies that have been presented Markit Economics and the Chartered Institute of Purchasing and Supply, at the end of last month, the growth in the British service sector accelerated to the highest level in more than two years, which was supported by a significant increase in new orders, which was the highest since 2007.

According to the report, in June, the index of business activity in the services sector climbed to 56.9 - the highest level since March 2011. Note that by the end of May, the index rose to a level of 54.9. A reading above 50 indicates expansion in the sector of activity.

We also add that with the last read it already was the sixth consecutive month extension. Many economists had forecast a slight drop in the index - to 54.6.

The data also showed that the growth in the number of new orders were the highest since June 2007, which encouraged the company to increase the number of jobs. It should be noted that this growth was the highest since August 2007.

Meanwhile, it was reported that the level of trust between service providers in June reached a 14-month high. Note also that the increase in purchase and selling prices accelerated during the last month. But despite the increase in selling prices inflation was moderate, and was much lower than the cost price.

The Japanese yen strengthened against the dollar and the euro amid renewed tension in the periphery of Europe. Purchasing Managers Index PMI become an additional catalyst. In all countries except Italy, in June was marked improvement in the service sector than in May.

Also, the currency's expectations related to the release of U.S. data on changes in the number of employees from ADP, jobless claims and trade balance. Recall that in April, the U.S. trade deficit widened to $ 40.3 billion from $ 37.1 billion in March. In general, the trade deficit declined last year, which was associated with a slight decrease during the year of import and modest export growth. However, we do not expect that trade can make a significant contribution to overall growth. We add that the EU is mired in recession, and growth in the rest of the world is slowing down, as concerns about the economy of China is growing. Recovery of the U.S. economy also remains modest, keeping the consumer and business demand for imports at bay. Note that inbound and outbound container traffic fell by internal ports, and ISM manufacturing index for May showed that international trade has weakened during the month, especially exports.

EUR / USD: during the European session, the pair fell to $ 1.2921, and then recovered to $ 1.2972

GBP / USD: during the European session, the pair rose to $ 1.5273

USD / JPY: during the European session, the pair fell to Y99.24

At 12:15 in the U.S. will change ADP Employment for June. At 12:30 the U.S. and Canada will publish its trade balance. In the U.S., will be released at 12:30 number of initial applications for unemployment benefits and the number of continuing claims for unemployment benefits in 14:00 - a composite index of ISM non-manufacturing activity in June, and at 14:30 - the data on stocks of crude oil from Department of Energy.

03.07.2013 11:45


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  • U.S. commercial crude oil inventories decreased by 4.7 million barrels from the previous week
  • Australian unemployment rate stable at 5.6% in June
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