EUROZONE DATA TAKES THE SPOTLIGHT
Eurozone data are back in the spotlight on Monday ahead of an active week in the market that features central bank meetings and US nonfarm payrolls. Although Monday won’t be nearly as exciting, it does feature some important tidbits on the currency region.
The newswire begins at 07:00 GMT with a report on German retail sales. Receipts at retail stores are forecast to climb 0.5% in September, following a 0.4% drop the month before. Compared to a year earlier, sales are expected to rise 3.5%.
Spain will dominate the headlines at 08:00 GMT with preliminary reports on inflation and gross domestic product (GDP). The Spanish economy is projected to grow at a healthy 0.8% in the third quarter, following a 0.9% advance in Q2.
British consumer credit and mortgage approval data will make their way through the financial markets at 09:30 GMT.
A half-hour later, the European Commission’s statistics agency will release a deluge of sentiment indicators including industrial confidence, economic sentiment and consumer confidence.
Meanwhile, Germany will issue its preliminary CPI data at 13:00 GMT.
In US data, the Commerce Department will report on personal spending and outlays for the month of September. The monthly release is expected to show a 0.7% increase in personal spending. Income growth is forecast at 0.2%.
The euro has been in freefall since the European Central Bank (ECB) announced it would likely extend its bond-buying program beyond September 2018. The announcement confused the bulls, who had just cheered the ECB’s decision to cut its monthly bond purchases in half from €60 billion to €30 billion. The EUR/USD exchange rate was last seen trading at 1.1600. The pair fell roughly 200 pips on Friday. The technical picture is bearish following a breakdown of support near 1.1660. The pair’s next support level is located at 1.1585. On the opposite side of the ledger, the initial resistance target is located at 1.1720.
Cable was trading steady on Monday, as markets stabilized following a sharp breakdown on Friday that drove prices to three-week lows. The GBP/USD is currently trading around 1.3140, where it was up slightly from the previous close. The pair is expected to rally later this week as the Bank of England (BOE) signals for higher interest rates. With inflation at 3%, the central bank is widely expected to hike rates. The bulls are eyeing the 1.3160 resistance for signs of upward momentum. That level represents the high from Friday. ON the opposite side of the ledger, immediate support is located at 1.3187, which represents the 50-DMA.
Oil prices are riding a wave of optimism now that OPEC appears to be committed to extending its supply cut well into next year. US crude is trading near six-month highs, with prices briefly surpassing $54.00 a barrel. The market looks poised for further gains as investors rally behind supply-side optimism. Optimism is also being supported by expectations of higher crude demand.