Rates as of 0400 GMT
Is the European recovery already priced in? Most of Fridays preliminary purchasing managers indices PMIs beat expectations handily, except for German manufacturing, which at 64.0 is pretty strong, nonetheless. The leaps in Eurozone and US servicesector PMIs were particularly notable as was the dismal underperformance of Japan, which is likely to weigh on the yen going forward.
Yet the muchimproved Eurozone PMIs werent enough to support the euro. This suggests that the recovery of the Eurozone economies as lockdown restrictions are lifted may already be priced in.
Similarly, the UK had a massive beat on the manufacturing PMI and only a small miss on the servicesector PMI, which in any case was already high and moved even higher. Plus, UK retail sales beat estimates too. Yet GBP was generally lower as well.
CAD was the outperformer on a day when the dollar rose against most everything. A sharp rise in oil prices combined with a betterthanexpected retail sales figure 4.3 mom ex autos vs 2.3 mom expected The preliminary retail sales data for April showed a downturn, but thats only to be expected as there was a stayathome order in Ontario for much of the month.
Oil was up as the US and other Western countries continue to make progress on the virus front, suggesting stronger demand to come in the future as people start traveling and moving around again.
AUD on the other hand was under pressure from falling iron ore prices. The…