EUROPEAN session review (01.07.2013): european currencies show modest growth

Data released (actual, consensus, previous):                 

07:30 GMT Switzerland SVME - Purchasing Managers' Index (Jun) 51.9    51.8    52.2         

07:43 GMT Italy Markit Manufacturing PMI (Jun) 49.1    47.8    47.3         

07:48 GMT France Markit Manufacturing PMI (Jun)  48.4    48.3    46.4         

07:53 GMT Germany Markit Manufacturing PMI (Jun)  48.6    48.7    49.4         

07:58 GMT EMU Markit Manufacturing PMI (Jun) 48.8    48.7    48.3               

08:28 GMT UK Markit Manufacturing PMI (Jun) 52.5    51.5    51.5      

08:30 GMT UK Consumer Credit (May) £0.7B    £0.600B    £0.6B        

08:30 GMT UK M4 Money Supply (YoY) (May)  -0.1%   _     -0.1%         

08:30 GMT UK  M4 Money Supply (MoM) (May)   -0.1%    0.0%    0.3%         

08:30 GMT UK Mortgage Approvals (May)   58.242K    55.05K    54.354K     

08:30 GMT UK Net Lending to Individuals (MoM)  £1B    £1.4B    £1.4B    

09:00 GMT EMU Consumer Price Index - Core (YoY) (Jun) Preliminar 1.2%   _     1.2%         

09:00 GMT EMU Consumer Price Index (YoY) (Jun) Preliminar  1.6%    1.6%    1.4%         

09:00 GMT EMU Unemployment Rate (May)  12.1%    12.3%    12.0%

The european currencies show modest gains versus dollar before a U.S. report forecast to show manufacturing rebounded, adding to signs the Federal Reserve may begin to trim bond purchases. 

Also investors wait for ECB meeting this Thursday. Any careless word from Draghi may lead to euro sell-off.

EURO:

Euro rose a bit after Eurozone PMI Manufacturing grew to 48.8 points in June, from 48.3 points in May, according to data released. Market consensus pointed to slightly less increase to 48.7. 

Other data released showed the Eurozone Unemployment Rate increased to 12.1% in May, from 12% in April. This result is more positive than forecasts of a rise to 12.3%. 

EUR/USD trades around $1.3040 with initial support comes at recent lows on $1.2980. Below support comes at $1.2960 (Apr 24 and Jun 3 lows) и $1.2840 (May 29 lows). Key support remains at $1.2800 (May 17 low). Resistance comes at $1.3100 (Friday’s high). Above gains may extend to $1.3160 (Jun 20 lows), then - at $1.3255/60 (Friday’s high) and $1.3300 (Jun 6 high).

POUND:

The pound reversed when UK activity surprised to the upside. 

PMI came in as 52.5 beating expectations of 51.5. Mortgage Approvals for May 58.242k vrs expectations of 55.05k. Net Lending to Individuals was lower at £1b vrs £1.4b consensus. 

GBP/USD remains under pressure, despite the recovery from Friday’s lows on $1.5160 (initial support). Below losses may widen to $1.5140 (May 24 high and May 31 lows), then - to $1.5000 (May 29 lows). Initial resistance comes at Friday’s high on $1.5280, then - at $1.5340 (Thursday’s high), then - at $1.5400 (Wednesday’s high), then - at $1.5450/60 and $1.5530 (Jun 21 high).

YEN:

The yen continues to slide despite the Bank of Japan’s quarterly tankan survey showed a sharp improvement in sentiment at large businesses. 

USD/JPY trades around Y99.70. Above resistance comes at Y99.90/00 (61.8%). Below Y98.80 support comes at Y97.20, with a break under targets last Friday’s lows near Y96.90.

DATA AHEAD:

US data include May Construction Spending at 14:00 GMT with 0.7% expected after 0.4%. The same time Jun ISM Manufacturing PMI comes (median 50.1 after  49.0). 

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