Today, market participants finally got some post-Brexit referendum economic data to reflect on. The Eurozone’s preliminary composite PMI dipped to over a one-year low level in July. On the other hand, German private sector growth registered its highest level so far this year, brushing off Brexit concerns. In the UK, the just out data showed that Britain’s manufacturing and services sectors sharply contracted in July for the first time in at least three years. Across the Atlantic, the US manufacturing PMI will be out later in the day.

During the weekend, the G-20 finance ministers and central bank governors will meet in Chengdu, China, to discuss the deteriorating global outlook after Britain’s decision to leave the European Union (EU).

Pound Sterling – UK Markets

The Pound surrendered its early session gains against its major peers this morning after the just out data showed that the preliminary reading of UK’s service sector PMI recorded its steepest drop since March 2009. Additionally, in July the manufacturing PMI fell to its lowest level since February 2013.

Yesterday Sterling initially dropped against the greenback, falling below the crucial 1.32 mark in a knee-jerk reaction to the weaker-than-expected British retail sales data. However, the Pound recovered during the latter part of yesterday’s session after the US Dollar weakened following the release of a mixed set of US data. Meanwhile, UK public sector net borrowing continued to post a deficit in June. Separately, UK Prime Minister (PM) Theresa May had a tough encounter with French President Francois Hollande at the Elysee Palace yesterday. The newly-appointed British PM was issued a stark warning that Britain cannot have its cake and eat it too i.e. it cannot keep its lucrative access to the European Union single market while curbing immigration from Europe.

US Dollar – US Markets

The greenback lost ground against the shared currency and the Pound yesterday after a mixed batch of US economic data crossed the wires. A couple of data releases surprised on the upside, signaling the inherent strength in the US economic recovery. The number of applications for US unemployment benefits declined slightly to a three-month low level last week, indicating that the nation’s labour market remains on a steady footing. Additionally, the sale of previously-owned homes in the nation advanced at the strongest pace in nearly a decade, rising for the fourth consecutive month in June buoyed by low mortgage rates and an improving economy. Further, the US Chicago Fed national activity index rebounded in June. The only disappointment yesterday came in the form of the Philadelphia Fed manufacturing index for July - data showed that activity of US manufacturers in the Philadelphia region plunged to its lowest level since January this year.

The US Markit flash manufacturing PMI is due later today and is expected to post a slight uptick in July.

Euro – European Markets

The Euro found renewed strength against the US Dollar yesterday after the European Central Bank (ECB) opted to keep its record-low interest rate on hold. The shared currency especially gained after the ECB President, Mario Draghi, stated that the European financial markets had weathered the post-Brexit volatility with “encouraging resilience”. This was completely in contrast to the pessimistic view expected by most market participants. However, he also quickly reiterated that the ECB stands ready to act using all its instruments if necessary.

Earlier this morning, a slew of Eurozone economic data points saw the light of the day. The Eurozone’s composite PMI dipped to an eighteen-month low level in July as the nation’s manufacturing PMI fell more than expected this month. On the other hand, German private sector growth hit its highest level in July so far this year. Meanwhile, French business activity surprisingly held up better than expected in July, despite the Bastille Day truck attack in Nice and Brexit. The resilience came largely from the service sector, while the nation’s manufacturing index remained in contraction territory.

Other Currencies – Highlights

The Canadian Dollar is trading lower against the greenback this morning, falling for the fourth consecutive session due to low oil prices. Later today there will be a couple of Canadian economic data reports for investors to digest. First up, the nation’s retail sales are expected to register a flat reading in May after hitting a three-month high level last month, as the Canadian economy has slowed down due to lower commodity prices as well as overall uncertainty in global markets. Secondly, Canada’s consumer price index (CPI) for June is expected to come in lower than the previous month’s reading.

Earlier in the session, Canada’s wholesale sales blew past expectations and rose at their fastest pace in more than a year, buoyed by a strong demand for food and automobiles. Separately, the Conference Board of Canada downgraded Canada’s GDP forecast for 2016, indicating that the Alberta wildfires, low energy prices and the significant deterioration in business investment have dimmed the growth outlook for the nation.