The first day of a new quarter couldn’t have kicked off better. Stock markets brightened with green across the world as a new month seems to give more resolve for investors despite a recent slew of hawkishness expressed by major central banks. As a result, the Japanese yen was among the worst performing currencies in G10 along with gold prices in a commodity bloc. 

The largest winners were soft commodities with grains leading the gains and marking really astonishing outcomes following adverse weather in the key US states as well as the bullish report showed by the USDA on Friday. A lowering of risk aversion prompted investors to pour their money into stock markets. Having assumed this exuberance will keep on spreading going forward, it’s worth glancing at the German DAX which could constitute quite a decent opportunity to express a bullish attitude in the stocks spectrum.

Besides, the US dollar got back some of its recently lost appeal, and US macroeconomic data unveiled today seemed to back better moods. A better than anticipated print of the manufacturing ISM is especially noteworthy as this indicator correlates quite well with real changes in US industrial production. Hence, taking account of current levels pointed by ISM, there are no cautionary signals, at least not just yet. 

The last week brought two relevant shifts in the oil market and both have to be accounted for. First of all, US oil output decreased the most this year. While it could have been just a temporary factor sparked by outages in Alaska, some could argue that it could constitute a short-term shift for oil prices going forward. Secondly, US oil rigs declined in the prior week from 758 to 756 which could be seen as a more long-standing factor propping up an ongoing rebound in prices. 

Moreover, there were final PMIs from European economies earlier today. The EMU manufacturing PMI was slightly stronger than expected but overall the data released in Europe today are somewhat on the low side as the bar has been set high. In turn, in UK a miss was much bigger at just 54.3 pts., down 2 points from May with the consensus looking for a broadly unchanged number.

As we’re heading to Asian session it has to be underlined that the biggest volatility could come up at the Australian dollar owing to the RBA’s meeting which will take place in early European trading (5:30 am BST). There will be a reading of retail sales a bit earlier from Australia as well. The AUD could be prone to a decline in the aftermath of the RBA’s verdict, the bond market justifies current valuation though.

At the end let us present a technical signal on the GBPUSD we’ve launched earlier.