The closure of much of mainland Europe for May Day, the wind down of London ahead of Monday's holiday and of Tokyo ahead of the forthcoming Golden Week holiday ensured thin conditions this morning. Sterling took advantage of the thin conditions with EUR/GBP dropping to the 0.8900 area on the better than expected UK manufacturing April PMI data (42.9 vs. 39.1 in March). The move once again highlights how sensitive sterling can be to good news given the weight of short positions that have been built on months of bad UK news. However, the PMI data, while better than expected, is not particularly good news insofar as any number below 50 is still hinting at contraction in the sector. Similarly the releases of lending and mortgage approvals data from the BoE this morning highlights continued weakness in lending to individuals. At GBP0.9 bln, the overall figure was below that printed in Feb as was the net lending on dwelling. In view of this data sterling looks vulnerable to profit-taking.
While GBP and the AUD have been headed higher (towards the AUD/USD0.7230 level), EUR/USD and EUR/JPY are trading only a touch higher from the open. The flat tone of the EUR and of the FT-SE index this morning suggests that the market is maintaining a lack of enthusiasm with respect to ''risky'' positions ahead of the long weekend. This afternoon, the US ISM manufacturing survey will draw attention. Following the recent wave of better than expected confidence data the market is looking for this number is also show signs of bottoming (consensus 38.0).
| 5/1/2009 | 14:00 | US | U. of Michigan Confidence | APR F | 61.9 | 61.8 |
| 5/1/2009 | 14:00 | US | ISM Manufacturing | APR | 36.3 | 38 |
| 5/1/2009 | 14:00 | US | Factory Orders | MAR | 1.80% | -0.80% |
| 5/1/2009 | 14:00 | US | ISM Prices Paid | APR | 31 | 33.5 |
| 5/1/2009 | US | Total Vehicle Sales | APR | 9.9M | 9.6M | |
| 5/1/2009 | US | Domestic Vehicle Sales | APR | 7.1M | 7.2M |
