FRIDAY’S DATA DELUGE WILL KEEP INVESTORS ON THEIR TOES
If the economic calendar is any indication, Friday is shaping up to be one of the most active trading sessions in recent memory. A deluge of market-moving reports from Europe and North America will make headlines, including several policy-laden speeches.
The data dump begins bright and early with German retail sales at 06:00 GMT. Over the next several hours, traders will navigate French inflation data, German unemployment figures and revised UK GDP numbers. The British economy is projected to grow 1.7% annually in the second quarter.
The European Commission’s statistical agency will report on preliminary consumer inflation at 09:00 GMT. At the same time, the Italians will produce their own CPI figures, while the Greeks unveil retail sales and producer prices.
Shifting gears to North America, US personal incomes and outlays will make headlines at 12:30 GMT. The monthly report includes the core personal consumption expenditure (PCE) index, which is the Federal Reserve’s preferred inflation measure. Core PCE inflation is projected to rise 0.2% in August and 1.5% annually.
The Chicago purchasing managers’ index (PMI) and Michigan consumer sentiment index will also be released in the New York session.
Around the same time, investors can expect a steady stream of high profile central bank speeches. European Central Bank (ECB) President Mario Draghi will deliver a speech at 14:15 GMT. Thirty minutes later, Bank of England (BOE) Governor Mark Carney is also scheduled to speak. Federal Open Market Committee (FOMC) member Patrick Harker completes the trifecta at 15:00 GMT.
Lots of interesting developments are under way at each central bank, making Friday’s speeches all the more important. Currency traders and stock investors will be listening intently to the commentary.
The euro recovered lost ground on Thursday, but continued to trade below 1.18 US. The EUR/USD exchange rate crashed some 270 pips in the first three days of the week, as the US dollar clawed back heavy losses against a basket of world peers. The pair continues to trade above a major support cluster in the 1.1690 – 1.1740 region.
The British pound stabilized on Thursday after suffering a series of losses during the week. However, cable was once again under pressure in the Asian session, where it fell 0.2% to the low-1.34 range. The bears are eyeing the 1.33 level for a major corrective breakthrough.
The Canadian dollar rose against the greenback on Thursday, but posted limited gains as investors eyed the latest economic developments. The USD/CAD is currently trading around 1.2440, having gained more than 300 pips since 8 September. Surprisingly, the loonie has been unable to catch a break despite the recent surge in global oil prices.