The market’s anxiety ahead of the US Nonfarm Payrolls (NFP) for June joins mixed concerns over the Fed’s next moves to probe the pair sellers. However, upbeat US data and hawkish Fedspeak, recently backed by the International Monetary Fund (IMF), keep EUR/USD sellers hopeful. Also adding to the market’s cautious mood are the mixed signals from Thursday’s US ISM Manufacturing PMI and Jobless Claims. US ISM Manufacturing PMI came in a touch softer than 61.00 expected and 61.2 previous readouts to 60.6 in June. This also joins the details relating to the employment component that dropped to 49.9 but the prices-paid sub-component jumped to the highest since 1979. On the contrary, Initial claims for last week fell to 364K, dragging down the four-week average to 392.75K, which in turn backs a strong NFP print that is expected to rise from 559K to 690K in June.
It’s worth noting that the US Federal Reserve (Fed) policymakers remain hawkish and back the tapering of bond purchases. That said, Philadelphia Federal Reserve Bank President Patrick Harker told the Wall Street Journal that he supports the start of bond-buying pullback later this year. His hawkish statements precede the IMF’s comments suggesting an upward revision to 2021 GDP and rate hike calls during the second half of 2022, not to forget the start of monetary policy adjustments, via bond purchase limits, in early 2022.
On a different page, Jens Weidmann, European Central Bank (ECB) Governing Council member and Bundesbank President, said on Thursday that he is skeptical about tolerating inflation overshoot. The same increases importance of today’s speech from ECB President Christine Lagarde titled “What have we learned in 2020?” The speech also becomes the key as the regional central bank holds a surprise meeting the next week.
EUR/USD Long (Buy)
ENTER AT: 1.18210