(06 MAY 2020)DAILY MARKET BRIEF 2:ECB defiance of German court decision

<p>The EURUSD tanked to 1.0825 following the German court decision and traded in the tight range of 1.0830/1.0845. Euro bears have the green light from data to continue selling this morning; the German factory output plunged 15.6%m-o-m in March versus -10% expected by analysts and -1.4% printed a month earlier. Later today, the European services PMI are expected to reiterate the sharpest contraction in activity on record, while the retail sales are expected to have plunged by more than 10% m-o-m in March. Hence, soft European data should further boost the euro bears’ appetite, amid rising concerns about the ECB’s ability to act more to throw a floor under the tumbling economic activity.</p>
<p>Elsewhere, the Indian services PMI plunged to 5.4 in April, versus 40.0 expected by analysts and 49.3 printed a month earlier.</p>
<p>US and European equities closed Tuesday’s session on a positive note, but activity in the futures market hints at a bearish start in Europe.</p>