Risk stays pressured to start the session

The dollar continues to benefit from the softer risk tones


  • France May flash services PMI 29.4 vs 28.2 expected

  • Germany May flash manufacturing PMI 36.8 vs 39.4 expected

  • Eurozone May flash services PMI 28.7 vs 25.0 expected

The euro area PMI releases didn't offer much insight on what to expect next as all it did is basically tell us that economic conditions in May are not as bad in April, but still some way off pre-coronavirus crisis levels.

The market had a more 'sensible' reaction as investors looked past the headline beats in the services and composite prints to digest the details instead.

As such, the risk mood is staying on the defensive as we have seen from Asia Pacific trading with US-China tensions stealing the headlines at the start of the day.

European stocks are down near the lows now, with the DAX falling by roughly 1.4%, as we see US futures also keep lower by around 0.7%. The S&P 500 remains a pivotal chart to watch, as the index closed in on a test of its key daily moving averages yesterday.

It is still early in the session to be drawing conclusions about how risk trades will play out for the rest of the day but for now, there isn't any change after the euro area PMI releases.