• Higher yields continue to underpin the dollar for now
• BOE’s Bailey: Inflation has turned the corner
• BOE’s Bailey: We are nearer to the peak on interest rates
• Eurozone May flash services PMI 55.9 vs 55.6 expected
• Germany May flash manufacturing PMI 42.9 vs 45.0 expected
• France May flash services PMI 52.8 vs 54.0 expected
• UK May flash services PMI 55.1 vs 55.5 expected
• Eurozone March current account balance €45.0 billion vs €21.3 billion prior
• Russia touts positive relations with China, says trade turnover may reach $200 billion

Markets:

• JPY leads, NZD lags on the day
• European equities lower; S&P 500 futures down 0.2%
• US 10-year yields up 2.9 bps to 3.747%
• Gold down 0.5% to $1,958.93
• WTI crude up 1.0% to $72.75
• Bitcoin up 1.6% to $27,331

Euro area PMI data reaffirmed growth in the economy in May, albeit at a slower pace amid a further divergence between the manufacturing and services sectors. The former is seen slumping while the latter is holding up and on the balance of things, is keeping recession risks at bay for now.

The euro was steadier early on but ultimately bowed down to the dollar as the greenback pulled higher in European morning trade.

EUR/USD stuck around 1.0790 levels before easing to 1.0770 while GBP/USD slipped from around 1.2420 to 1.2375 as the dollar flexed its muscles. The bid in the dollar is helped out by higher Treasury yields again, with equities looking more cautious on the day as well.

That is putting pressure on the antipodeans, with AUD/USD down 0.5% to 0.6620 and NZD/USD down 0.5% to 0.6250 currently.

Elsewhere, gold is marked down by 0.6% to below $1,960 while silver is being beaten up badly in a over 2% drop to $23.13 – its lowest levels since the end of March.

It’s now over to US PMI data later to see if the market mood will carry on in the session ahead.

This article was written by Justin Low at www.forexlive.com.