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    Global Slowdown? Manufacturing PMI’s Weak



    USDJPY, H4       

    A raft of poor manufacturing PMI data, the much anticipated delay in the Japanese sales tax, two “Brexit friendly” polls and the OECD warning has rallied the YEN and undermined the USD and GBP in particular.

    OECD warns of “dismal” global economic outlook, with overall OECD GDP growth seen at 1.8% this year, rising to 2.1% in 2017. The Eurozone forecast was raised to 1.6% this year from 1.4% expected in February. By contrast the U.K. economic forecast was slashed to 1.7% from 2.1% amid renewed Brexit warnings, with the OECD saying that the “outcome of the referendum is a major risk for the economy”, adding that “a vote for Brexit would heighten uncertainty, raise the cost of finance and hamper investment”. It could not only pose a long-term drag on the British economy, but could also set off a global chain reaction. The forecast for the U.S. economy was cut to 1.8% from 2% back in February. Japan is set to grow 0.7% this year and 0.4% next, while Chinese growth is put at 6.5% in 2016 and 6.2% in 2017.

    The USDJPY has fallen from north of 111.00 earlier today to six day lows under 109.20, whilst the GBPJPY is currently trading at ten day lows south of 157.50.


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    Stuart Cowell

    Market Analyst 


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