European markets moved higher on Tuesday, with the pan-European Stoxx 600 climbed to a new all-time high in early trade after a quiet session due to public holidays in the U.K. and the U.S. On the data front, the Eurozone manufacturing activity expanded at a record pace in May. IHS Markit's final manufacturing PMI rose to 63.1 in May from April's 62.9, above an initial 62.8 estimate. The annual Eurozone CPI came in at 2% in May, outpacing expectations of 1.9% while accelerating from April’s 1.6%. In the U.K., factory activity rose to 65.6 in May from 60.9 in April, its sharpest increase since records began.
In individual stocks, CD Projekt plunged over 7% after the company reported a worse-than-forecast 65% drop in profit. Elsewhere, St. Louis Federal Reserve President James Bullard said the US labor market was tighter than it appears, adding that it could accelerate the central bank’s timeframe for removing some monetary stimulus from the economy.
Against this backdrop, the UK FTSE 100 gains 1.23% to 7,109, Italy’s FTSE MIB adds 1.13% to 25,455, France’s CAC 40 is up by 0.80% to 6,499, while the German DAX 30 rises by 1.45% to 15,644. US stock index futures are pointing to positive open early on Tuesday.
The dollar is under selling pressure despite hawkish comments from Fed’s Bullard. The USD index dipped below the 90.00 level to new multi-day lows on Tuesday. If buyers fail to regain the 90.50 area in the near-term, then index could be exposed to a deeper retracement. As such, EURUSD climbed to 1.2240 earlier in the day before retreating in recent trading. It looks like the common currency lacks upside momentum despite the persisting upside bias.
Meanwhile, Brent crude has exceeded the $70 figure and was last seen trading around the $71 mark as the demand outlook continues to improve. The Organization of the Petroleum Exporting Countries and allies including Russia are meeting later today. The group is expected to stay the course on plans to gradually ease supply cuts until July.
In other markets, bitcoin price struggles to overcome the $38,000 nearest resistance, staying in a tightening trading range these days. As long as the prices stay below the $40,000 figure, downside risks continue to persist in the short term. On the downside, the immediate support arrives at $35,000.
Nathan Lambert, Head of Global FX Analytical Department