Foreign exchange market. European session: the euro dropped against the U.S. dollar despite the strong industrial production in France

Economic calendar (GMT0):

01:30    Australia                National Australia Bank's Business Confidence  May       6                          7

01:30    Australia                ANZ Job Advertisements (MoM)                      May   +2.2%                  -5.6%

01:30    Australia                Home Loans                                                   April   -0.8%    +0.3%       0%

01:30    China                    PPI y/y                                                           May    -2.0%    -1.5%     -1.4%

01:30    China                    CPI y/y                                                           May   +1.8%    +2.4%  +2.5%

05:45    Switzerland            Unemployment Rate                                      May     3.2%     3.2%      3.2%

06:00    Japan                    Prelim Machine Tool Orders, y/y                     May     48.7%                 24.1%

06:45    France                  Industrial Production, m/m                             April    -0.4%    +0.3%    +0.3%

06:45    France                  Industrial Production, y/y                               April    -0.8%                    0.0%

07:15    Switzerland           Retail Sales Y/Y                                               April    +3.4%     +3.5%  +0.4%   

08:30    United Kingdom    Industrial Production (MoM)                            April      -0.1%   +0.4%   +0.4%

08:30    United Kingdom    Industrial Production (YoY)                             April      +2.3%  +2.7%   +3.0%

08:30    United Kingdom    Manufacturing Production (MoM)                    April      +0.5%  +0.4%   +0.4%

08:30    United Kingdom    Manufacturing Production (YoY)                     April      +3.3%  +4.0%   +4.4%

The U.S. dollar traded higher against the most major currencies. The U.S. dollar was still supported by Friday’s nonfarm payrolls report. The U.S. economy added 217,000 in May, missing expectations for a 218,000 rise, after a 282,000 gain in April. April’s figure was revised down from a 288,000 increase.

The euro dropped against the U.S. dollar despite the strong industrial production in France. Industrial production in France rose 0.3% in April, meeting expectations, after a 0.4% decline in March. March’s figure was revised up from a 0.7% decrease.

On a yearly basis, industrial production in France was flat in April, after a 0.8% fall in March.

The European Central Bank’s interest rate decision weighed on the euro. The European Central Bank cut its interest rate to 0.15% from 0.25% last Thursday. The ECB also cut its marginal lending to 0.40% from 0.75% and reduced its deposit rate to -0.10% from 0.0%. The European Central Bank is the world’s first major central bank to use a negative rate. The deposit rate of -0.10% means that commercial bank will be charged for holding their reserves. This measure should spur commercial banks to ramp up lending.

The British pound traded lower against the U.S. dollar. Manufacturing output in the U.K. increased 0.4% in April, meeting expectations, after 0.5% gain in March. On a yearly basis, manufacturing production in the U.K. rose 4.4% in April, exceeding expectations for a 4% increase, after a 3.3% increase in March.

Industrial production in the U.K. climbed 0.4% in April, in line with forecasts, after a 0.1% decline in March. On a year-over-year basis, industrial production in the U.K. rose 3.0% in April, after a 2.3% increase in March. That was the biggest annual increase since 2011. Economists had expected a 2.7% gain.

The Swiss franc declined against the U.S. dollar. Switzerland’s unemployment rate remained unchanged at 3.2% in May, as expected.

Retail sales in Switzerland increased 0.4% in April, missing expectations for a 3.5% gain, after a 3.4% rise in March. March’s figure was revised up from a 3.0% increase.

EUR/USD: the currency pair declined to $1.3532

GBP/USD: the currency pair decreased to $1.6764

USD/JPY: the currency pair traded mixed

The most important news that are expected (GMT0):

14:00    United Kingdom   NIESR GDP Estimate        May         +1.0%                

14:00    U.S.                    JOLTs Job Openings         April          4014     4040    

23:50    Japan                  BSI Manufacturing Index Quarter II   12.5      14.1