Pound Extends Losses

The Pound lost close to -0.30% on Monday after opinion polls showed a narrowing lead for Prime Minister Theresa May and the conservatives ahead of next month’s elections. Adding to the more pessimistic outlook are growing demands from the European Union for a so-called divorce payment they have pegged at upwards of €100 billion. The bearish sentiment was accentuated after news emerged of an explosion at an Ariana Grande concert in the English city of Manchester. Police report that at least 19 are dead and over 50 injured in what is being treated as a “lone wolf” attack.

Meanwhile, the Euro is rallying on Tuesday after German Chancellor Angela Merkel said the common currency was "too weak." Merkel’s comments provided fresh momentum for the Euro, which has been rising since the French presidential election earlier this month. EURGBP is trading close to a 2-month high around 0.8660.

Manufacturing activity in Japan expanded at its slowest pace in six months in May as output and job creation slumped to multi-month lows. On a seasonally adjusted basis, the Manufacturing Purchasing Managers’ Index compiled by Nomura fell to 52.0 in May from a final 52.7 in April, but managed to remain above the 50-mark that separates expansion from contraction.

The May PMI data signalled a broad-based slowdown in manufacturing growth, with sub-indices measuring output, employment and new orders all rising at their slowest pace since November of 2016. Activity levels across the global manufacturing space will be under the scanner when Markit releases its flash manufacturing PMI figures for Germany, the Euro Area, and the United States later in the session. After gaining ground earlier in the session, AUDJPY is flat on Tuesday, with the pair last seen around 83.200.