USD Buoyed on Interest Rates

At 2:00 AM Eurozone April Trade Balance (exp 15.4 bln euros, prev 15.5 bln euros)
At 4:30 AM UK April Industrial Production m/m (exp 0.2%, prev 0.3%)
UK April Industrial Production y/y (exp 0.6%, prev -0.2%)
UK April Manufacturing Production m/m (exp 0.2%, prev 0.3%)
UK April Manufacturing Production y/y (exp 1.4%, prev 0.9%)
At 7:00 AM Canada May Unemployment Rate (exp 6.1%, prev 6.1%)
Canada May Jobs-Change (exp 19.0k, prev –5.2k)
At 8:30 AM US April Trade Deficit (exp $63.5-bln, prev $63.89 bln)
Canada April Trade Balance (C$4.9bln, prev C$4.64bln)

The greenback remains supported against the majors following yesterday’s jump in yields for US Treasuries – with the yield on the 10-year edging to its highest level in almost a year at 5.14%. The bond market is pricing in no change in the Fed Funds rate for the remainder of the year, thereby providing support for the dollar – in which prior expectations for a rate cut were detrimental for the currency. Meanwhile, the sterling remains under pressure following the Bank of England’s announcement to leave rates unchanged despite being inline with expectations due to hopes for a surprise 25-bp hike to tame inflation.

Economic data from North America consist of Canada’s May unemployment rate, job-change, April trade Balance and US April trade deficit. Canada’s unemployment rate is forecasted to remain unchanged for May at 6.1%, with an increase of 19.0k in jobs-change versus a 5.2k decline in the previous month. The US trade deficit for April is expected to be largely unchanged, moving down slightly to $63.5 billion compared with $63.89 billion from March.