After a light macroeconomic calendar yesterday, market participants today woke up to a raft of flash manufacturing and service Purchasing Managers’ Index (PMI) releases from across the Eurozone. In France, while the manufacturing PMI disappointed this month, service sector activity registered a rise. However, the German economy exhibited the opposite pattern for August, with the services sector recording its weakest performance in fifteen months. Investors now await the Euro region’s consumer confidence index data for August, due later in the day.

In Britain, the Confederation of British Industry (CBI) will come up with its industrial orders data for August in a few hours, while across the Atlantic, manufacturing PMI for August and the July report on new home sales are up for release.

Pound Sterling – UK Markets

The Pound has extended its previous session gains against the US Dollar and the shared currency this morning. Today, UK’s CBI industrial orders data is scheduled for release in a few hours and is expected to decline further in August. Looking ahead, market participants eagerly await the preliminary reading of Britain’s second quarter GDP data later this week.

Yesterday, the Pound ended higher against the greenback, amid a broad weakness in the US Dollar, as investors remained cautious ahead of Federal Reserve (Fed) Chairwoman Janet Yellen's address at the Jackson Hole symposium later this week. Separately, leaders of the Eurozone's three biggest economies held talks on the Italian island of Ventotene yesterday, the second such meeting after Britain's shock decision to leave the European Union. The German Chancellor, Angela Merkel, along with the French President, Francois Hollande, and Italian Prime Minister, Matteo Renzi, stated that they respect the UK’s decision and that the remaining 27 member states look forward to living in a safe and prosperous Eurozone.

US Dollar – US Markets

The US dollar is trading on a weaker footing against the Euro and the Pound this morning. Uncertainty among investors continued to loom over the timing of an interest rate rise in the US. After last week’s hawkish comments from top Fed officials William Dudley and Stanley Fischer, the central bank policymakers now head to the annual Jackson Hole symposium which takes place later this week. The meeting will be closely watched by market participants for clues on the US economic outlook and the timing of another interest rate rise. US new home sales, the Richmond Fed index and the preliminary US Markit manufacturing PMI for August are all set to release later today. Last month the index jumped to its highest level since October 2015, suggesting that the nation’s manufacturing sector has regained momentum.

Yesterday, data showed that the Chicago Fed National Activity Index improved to a twelve-month high in July, thus offering reassurance over underlying economic trends. However, the three-month average of the regional economic activity is still below its potential.

Euro – European Markets

The shared currency has retained its bullish bias against the greenback this morning. Data released earlier during the session showed that while the preliminary reading of the Eurozone service PMI advanced in August, the region’s manufacturing PMI recorded a drop. Meanwhile, German private sector growth lost momentum in August as the nation’s manufacturing sector cooled and the services sector posted its weakest performance in fifteen months. Separately, in France, growth in the services sector helped offset weakness in the nation’s manufacturing activity - manufacturing PMI reached a two-month low level in August. Nevertheless, the improvement in services lifted the French flash composite PMI, which measures the combined output of both the manufacturing and service sectors, to a ten-month high in August.

Going ahead, market participants look forward to the Eurozone’s preliminary consumer confidence index for August, scheduled to release later today and expected to show a slight improvement this month.

Other Currencies – Highlights

The Japanese Yen is trading higher against the US Dollar this morning, as the greenback has weakened across the board. Data released earlier in the session showed that the preliminary reading of Japan’s Nikkei manufacturing PMI rose above expectations in August, but the nation’s manufacturing sector continued to remain mired in contractionary territory. Nevertheless, the output index swung to expansion for the first time since February 2016 and firms witnessed a slower reduction of total new work and export sales during the period. Japan’s so-called Abenomics programme has faced intense scrutiny over the past two years for its inability to produce timely results. Taking this into consideration, the Bank of Japan (BoJ) is expected to make a few bold moves at its next monetary policy meeting in September.

Tomorrow, Japan’s Cabinet Office is scheduled to release the nation’s leading economic and coincident indices data for June, while later this week Japan’s national consumer price index is up for release and the nation’s deflationary spiral is expected to enter its fifth consecutive month in July.