EUR/USD, USD/JPY: Risk-On World; GBP/USD: Not Turning Bullish Soon - SocGen
Upside surprises continue for the US economic data calendar, meanwhile. The manufacturing Ism wasn’t as weak as feared and the price component was stronger. On we go to the ADP employment survey tomorrow, which we expect to show a 225k increase, i.e. a little above the recent trend. We’ll also get a Beige book.
The overall tone should be enough to keep Treasury prices under pressure and that in turn, keeps the dollar bid within G3FX at least.A riskon world with rising Treasury yields is not going to help the yen, and the contrast between the US and Eurozone data is going to keep up the pressure on the Euro, even if EUR/USD 1.08 remains a significant hurdle.
A poor UK manufacturing PMI should be followed by a better construction PMI tomorrow (expect 55.6 vs. 55.0) and a catalyst for the next leg lower in GBP/USD is absent at the moment. But I’m not sure the EU referendum debate is getting less toxic, and I’m certain the outcome is as unclear as it could be. I won’t be getting bullish of GBP any time soon.
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