EUROZONE, US DATA IN THE SPOTLIGHT ON FRIDAY
Key data releases from the eurozone and United States will headline an active Friday session in the wake of watershed policy statements from the Federal Reserve and the European Central Bank. Against that backdrop, investors will have the opportunity to gauge trends in inflation, international trade and industrial production.
Germany will kick off the European session with a report on wholesale prices at 06:00 GMT. The wholesale price index is forecast to rise 0.3% for May compared with 0.5% the month before.
Shifting gears to Italy, reports on industrial sales and consumer inflation will make their way to investors at 08:00 GMT and 09:00 GMT, respectively. On the inflation front, the consumer price index (CPI) is forecast to rise 1.1% annually for May.
The European Commission’s statistics agency will release trade and final inflation numbers at 09:00 GMT. Brussels’ trade surplus is projected to weaken to €20.2 billion in April compared with €21.2 billion the month before.
The eurozone consumer price index is projected to rise 0.5% month-on-month for May and 1.9% annually, unchanged from previous readings.
On the monetary policy docket, the ECB’s Benoit Coeure will deliver a speech at 09:45 GMT. The ECB signaled Thursday it will continue unwinding its stimulus program, effectively putting an end to quantitative easing by the end of the year.
In North American trade, the Federal Reserve Bank of New York will unveil the latest edition of the Empire State manufacturing index at 12:30 GMT. The June report is expected to fall to 19.0 from 20.1 in May.
Forty-five minutes later, the Federal Reserve will release its monthly industrial production report. Output from American factories is forecast to rise 0.2% in May after climbing 0.7% the month before.
At 14:00 GMT, investors can expect to see the first reading of the June consumer sentiment index courtesy of the University of Michigan. Analysts are projecting a slight uptick in the headline reading to 98.5 from 98.0.
Europe’s common currency experienced a 250-pip collapse Thursday following the ECB’s policy decision. EUR/USD is currently trading at 1.1566 with the bears firmly in control. The capitulation of the bulls puts EUR/USD at risk of breaking below the 1.1550 level. On the flipside, immediate resistance is located at 1.1600.
Cable fell through several support levels Thursday as the dollar reasserted its dominance over the market. After peaking near 1.3450, GBP/USD has fallen all the way back to the mid-1.3200 range. The pair is testing immediate support at 1.3254 and a break below that level could expose 1.3200.
The dollar-yen exchange rate rebounded Thursday following a sharp reversal back toward the psychological 1.1000 region. USD/JPY now trades at 110.60 where it risks forming a double-top should the bulls fail to extend their rally.