A very strong Chicago PMI and upward revision to May University of Michigan Confidence have USDJPY avoiding a collapse through support once again – but next week is the real test for USDJPY and most major currencies. USDJPY trying to rally again late today after coming close to challenging the 100.00 level again and having a peek below 100.50 local support as the strong US data knocked the stuffing out of treasuries again, which appeared to be staging an end-of-month rally. It’s readily apparent that the USDJPY zone between 100.00 and 100.50 is the critical zone of support technically.
The key data for almost all of the major currencies awaits next week, however, which could push bonds/risk appetite and JPY crosses any which way all week long. Just for a rundown of the major highlights, these include:
Saturday – China’s May official Manufacturing PMI (getting close to 50 again…hasn’t been decidedly strong since April of last year)
Monday – China’s May official Non-manufacturing PMI and US ISM Manufacturing (has the Chicago PMI today saved the month for this one?)
Tuesday – Australia RBA (only tiny minority expecting a cut. Any support from AUD likely from positioning and not from anything supportive the RBA might have to say…)
Wednesday – US May ISM Non-manufacturing – last month’s was the worst in 9 months.
Thursday – ECB (funding for lending noise – anything else worth mention?) and BoE (nothing expected – last meeting before Carney’s arrival)
Friday – US employment report (could be pivotal for whether this fixed income sell-off ends sooner or later)
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