While range trading may have set in from the duration of the summer, there is plenty of economic data this week that could bring fresh direction. In particular, US payrolls data are due on Thursday this week due to the US holiday on Friday and there are plenty of European PMI numbers due. In Japan the key Tankan survey is due on Wednesday. This morning's Japanese May Industrial production data showed signs of stabilisation registering a 5.9% m/m rise, -29.5% y/y However, this was below the market median and is still reflective of a struggling economic backdrop. UK May mortgage approvals data at 43.4K was also consistent with stabilisation, but this also was below expectations and consistent with reports over continued difficulties with the supply of credit. Eurozone June consumer confidence registered a better than expected -25, business confidence also climbed to -2.97. While these numbers are likely to ensure that the term 'stabilisation' is included within the rhetoric of the ECB following Thursday's policy meeting, they are still well below their long-term averages suggesting the continuation of weak conditions in the Eurozone for some months to come.
Vs the USD, the EUR found little lasting support on the release of the confidence data.
Sterling has also crept higher vs the EUR despite the poor UK mortgage approvals data, though EUR/GBP remains above its recent low at 0.8400. EUR/CHF remains in central view following last week's reported SNB interventions. The EUR is edging higher towards EUR/CHF1.5280 this morning which should reduce the likelihood of any further near-term action from the SNB.
The rhetoric of the SNB has been oriented towards the want to reduce SNB appreciation rather than to ensure weakness.
This afternoon the Chicago Fed activity index and the Dallas Fed manufacturing index are due.
