EUR/USD dropped today as European macroeconomic reports were rather negative, hurting hopes for recovery. US fundamentals were not all good either as personal income and spending frustrated analysts who have expected an increase of the indicators. Yet Chicago PMI and Michigan Sentiment were better than expected, supporting positive outlook for the US economy.
Both personal income and spending disappointed market participants. Personal income was almost unchanged in April from March, when it rose 0.3%, while analysts have predicted 0.2% growth. The forecast of personal spending was also at 0.2%, but in reality it fell by the same rate. Expenditures increased 0.1% in March. (Event A on the chart.)
Chicago PMI increased from 49.0 in April to 58.7 in May. The actual advance was noticeably bigger than the forecast increase to 50.3. (Event B on the chart.)
Revised Michigan Sentiment Index was at 84.5 in May, somewhat above the preliminary reading of 83.7 and the forecast value of 84.1. The gauge was at 76.4 in April. (Event C on the chart.)
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