Currency traders turn to ISM services for data

European equity markets are set to open higher on Wednesday, following a positive US session the previous day. The Asia-Pacific region also saw mostly higher trading. In Australia, the economy showed a slight expansion of 0.1% in the first quarter of 2024, with an annual growth rate of just 1.1%, one of the weakest readings since the pandemic recovery began.

Caixin Services PMI in China accelerated in May at its fastest pace in 10 months. The index rose to 54 from 52.5 in April, marking the 17th straight month of expansion and the fastest growth since July 2023.

Traders are eagerly awaiting the eurozone producer price index, which is expected to fall by 5.1% year-on-year in April. In the US, economists are anticipating the release of the Automatic Data Processing (ADP) report, which is expected to show 173,000 job creations in the private sector for May, as well as the ISM services purchasing managers’ index (PMI) to rise back above 50.

The Bank of Canada is expected to cut rates by 25 basis points to 4.75%, joining other central banks in easing policy. Meanwhile, WH Smith is on track to deliver FY earnings in line with expectations, with travel revenue rising 9% in the 13 weeks to June 1st.

Hewlett-Packard Enterprise (HPE) saw its shares rise 11% in extended trading on Tuesday after reporting AI-driven earnings. The company forecast third-quarter revenue above Wall Street expectations, driven by strong demand for its artificial intelligence servers. For the second quarter, HPE reported revenue of $7.20 billion, surpassing estimates.

Oil prices have settled at a three-month low, with API inventories showing declines in crude and gasoline inventories while distillate stocks rose. Investors are closely monitoring these developments as they await further data and economic indicators to guide their trading strategies.