After the long weekend -by-Michael Oyebamiji

Markets are opened for trading in London today after a long weekend due to the Labour Day bank Holiday. The week is starting with a surprise move from the Reserve Bank of Australia. The Bank cut interest rate by 25bps to a record low of 1.175%, this according could be attributed to the lower than expected inflation forecast last week. Australian dollar took a dive by more than 100points to the downside against the USD from 0.772 to 0.7593. Elsewhere, in China, the Caixin Manufacturing PMI for April missed expectation, market was expecting 49.9 but final reading was 49.4. This is another indication that the Chinese economy is slowing sown. The Manufacturing PMI is now below 50.0 which shows its gradually heading into recession. Although, China is gradually trying to restructure her economy into a service based economy.

US Dollar remains the major asset dictating the moves in the market at the moment. USD weakness continues as the index is currently trading below $93.00 on the back of this, all major currencies has rallied massively against the USD and also assets like gold touched a new figure at $1300. Eurusd trading above 1.1500 and GBPUSD is also trading at a new 2016 high at 1.4700. USDJPY continue to slide and it’s now trading below 106.00.

Key data to watch today is the UK manufacturing PMI which is expected at 51.2. This is an important data to watch as the UK referendum draws closer. We have seen a massive shrink in investment inflow into the UK because of the uncertainty surrounding the UK referendum later in June. Most investors are probably waiting till after referendum to see if voter will vote to remain or leave.