European markets will be facing a weak start following losses in Asia amid fears of a global slowdown. The PBoC Vice Governor Gang is pointing to the success of efforts to curb Chinese inflation saying this will moderate in the second half of the year as tightening efforts begin to be felt while there is talk of extending efforts to limit property speculation to third and fourth-tier cities. Given all this currencies have started off on a risk averse footing in Asia with an early sell-off for the Euro, Cable, and Aussy though we have yet to see the single currency managing to close under its 1.4767 support. Despite strong numbers from Australia, the Services Index back above the boom/bust line at 51.5 and month-on-month New Home Sales at 4.3% AUDUSD remains weighed with precious metals and base metals pulling back. Going forward of interest among the currencies will likely be the Pound Sterling with GBPUSD seeing little action thus far though already seeing poor results. House Price Index numbers from Nationwide Plc has turned out in contraction at -0.2% against a 0.3% consensus forecasts, while we have coming up Construction PMI data at 0830GMT consensus calling for a 55.6 read though there is talk of possibly weaker numbers following yesterday’s disappointment from the CIPS Manufacturing Index.

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