European equity markets traded mixed during the first session of the month, as concerns regarding Greece’s debt issues continue to weigh on market sentiment. The DAX and London equity benchmark indices remained in negative territory while the Italian, Spanish and the CAC indices managed to post limited gains. However, the euro hovered around 1.090 against the USD, struggling for direction.
On the macroeconomic front, US Markit manufacturing PMI rose to 54.0 in May compared to 53.8 in April, beating analysts’ expectations. However, we received fairly modest Manufacturing PMI data from Eurozone as Germany’s Markit/BME manufacturing dropped to 51.1 in May and missed analysts’ estimates of 51.4, while Eurozone’s PMI declined to 52.2. In the UK, the Markit manufacturing PMI surged to 52.0 in May compared to 51.9 in April, missing estimates of 52.5.
The main focus will turn to the US non-farm payroll report on Friday amid increasing speculation that the US Federal Reserve could increase interest rates in September. The USD index continues its strong uptrend climbing over 97.40 against a basket of currencies and weighing on most commodity prices. Crude oil prices remain under pressure ahead of the widely expected OPEC meeting on Friday.