Europe Roundup: Euro gains against dollar on economic recovery hopes, European shares rise,Gold gains, Oil steady as OPEC+ considers extension to output curbs-June 1st ,2020

Market Roundup

• Spanish May Manufacturing PMI 38.3, 38 forecast.0,30.8 previous

• Italian May Manufacturing PMI 45.4, 37.1 forecast,31.1 previous

• French May Manufacturing PMI 40.6, 40.3 forecast, 31.5 previous

• German May Manufacturing PMI 36.6, 36.8 forecast, 34.5 previous

• Greek May Manufacturing PMI 41.1, 29.5 previous

• EU May Manufacturing PMI 39.4, 39.5 forecast, 33.4  previous

• UK May Manufacturing PMI 40.7, 40.7 forecast, 32.6 previous

Looking Ahead Economic Data

• 13:00 French 12-Month BTF Auction -0.517% previous

• 13:00 French 6-Month BTF Auction -0.519% previous

• 13:00 French 3-Month BTF Auction-0.526%-0.526%

• 13:30 Canada May RBC Manufacturing PMI 33.0 previous

• 13:45 US May Manufacturing PMI 39.8 forecast, 36.1 previous

• 14:00 US May ISM Manufacturing PMI 43.0 forecast, 41.5 previous

• 14:00 US May Construction Spending (MoM)  -6.0% forecast, 0.9% previous

• 14:00 US May ISM Manufacturing Employment 35.0 forecast, 27.5 previous

• 14:00 US May ISM Manufacturing New Orders Index 27.1 previous

• 14:00 US May ISM Manufacturing Prices 37.0 forecast, 35.3 previous

• 18:00 Brazil May Trade Balance 4.70B forecast, 6.70B previous

Looking Ahead Economic Data

• No economic data ahead

Looking Ahead - Events, Other Releases (GMT)

• No significant events

EUR/USD: The euro gained against dollar on Monday  as investors took cheer from signs that some economies may be through the worst of the coronavirus downturn.  Investors were also relieved that U.S. President Donald Trump made no move to impose new tariffs on China during a news conference on Friday when he outlined his response to Beijing’s tightening grip over Hong Kong. In the euro zone, the manufacturing PMI recovered somewhat in May from April’s record low, although factory activity still contracted heavily. The euro gained, rising 0.4% to $1.1154 before falling back to trade flat at $1.1115.Immediate resistance can be seen at 1.1166 (61.8% fib), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1067 (50 % fib), a break below could take the pair towards 1.0995  (9 DMA).

GBP/USD: Sterling gained against dollar on Monday as Britain eased some lockdown restrictions, but the market’s net short position on sterling is the largest in more than five months. The new rules do not apply to Wales, Scotland and Northern Ireland. A fourth round of trade talks on relations with the European Union following Britain’s departure from the bloc will start this week. Britain has until July 1 to ask for an extension to the current transition period which is due to end in December. The pound is being weighed down by a number of factors: Britain’s high COVID-19 death rate, a lack of progress in Brexit negotiations, a bleak economic outlook, and the Bank of England (BoE) considering negative interest rates. Immediate resistance can be seen at 1.2446 (Higher BB), an upside break can trigger rise towards 1.2532 (61.8% fib).On the downside, immediate support is seen at 1.2319 (50% fib), a break below could take the pair towards 1.2235 (11 DMA).

USD/CHF: The dollar strengthened against the Swiss franc on Monday as optimism over economies opening up again boosted risk appetite, despite worries over riots in the United States and unease over Washington’s standoff with Beijing. Investors were also relieved that President Donald Trump left a trade deal with China intact despite moving to end Washington’s special treatment for Hong Kong in retaliation for Beijing seeking to impose new security legislation on the city. Immediate resistance can be seen at 0.9628 (61.8% fib), an upside break can trigger rise towards 0.9659 (9 DMA).On the downside, immediate support is seen at 0.9596 (Daily low), a break below could take the pair towards 0.9544 (50 % fib ).

USD/JPY: The dollar edged lower against the Japanese yen on Monday dollar was also on the back foot as riots in major U.S. cities against police brutality rattled investors and offered additional support for Japanese yen. U.S. cities were cleaning up streets strewn with broken glass and burned out cars as curfews failed to stop confrontations between activists and law enforcement. The turmoil was a fresh setback for the economy which was only just emerging from a downturn akin to the Great Depression. Following poor data on spending and trade out on Friday. The dollar was 0.2% softer on a basket of peers at 98.018 having touched an 11-week low of 97.944 on Friday. It was steadier on the yen at 107.70. Strong resistance can be seen at 107.90 (38.2% fib), an upside break can trigger rise towards 108.30 (Higher BB).On the downside, immediate support is seen at 107.25 (21 DMA), a break below could take the pair towards 106.91 (61.8% fib).

Equities Recap

European shares rose on Monday on hopes of a post-coronavirus global recovery, with investors relieved that the U.S. response to China’s national security law in Hong Kong was not as bad as feared.

At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading up at 1.05 percent, Germany's Dax was down by 1.64 percent, France’s CAC finished was down by 1.25 percent.

Commodities Recap

Gold prices rose on Monday as the dollar weakened and jitters over riots in U.S. cities, as well as rising tensions between Washington and Beijing, boosted demand for the safe-haven metal.

Spot gold was up 0.5% to $1,735.47 per ounce at 0946 GMT, having surged 1% earlier. U.S. gold futures eased 0.2% to $1,748.40.

Oil prices were steady on Monday helped by reports that OPEC and Russia were closer to a deal on extending oil cuts but held back by renewed tension between the United States and China.

Benchmark Brent crude  was up 19 cents, or 0.5%, at $38.03 a barrel at 1126 GMT. U.S. crude  had dipped 11 cents, or 0.3%, at $35.38 a barrel.

Treasuries Recap

Italy’s bond yields posted their biggest monthly fall in four months in May, boosted by the likelihood the country will get grants from the European Union to support its coronavirus-hit economy.on relief over Trump's China response.

The country’s 10-year yield fell 29 basis points in May , the biggest monthly fall since January. They remained at near two-month lows early Monday, down 3 bps to 1.46%.