UK RETAIL SALES, US SENTIMENT DATA TO DRIVE MARKETS FRIDAY
The global financial markets will be clued in to the economic calendar on Friday, with investors anticipating high profile reports from both sides of the Atlantic.
Action begins at 07:00 GMT with a report on German producer inflation. The producer price index (PPI) is forecast to rise 0.2% in December, following a 0.1% increase the month before. In annualized terms, this would translate into a gain of 2.3%.
Later in the morning, the Swiss government will also report on wholesale inflation via the producer price index. Producer prices are projected to climb 0.4% month-on-month after climbing 0.6% the month before. That would translate into a year-over-year gain of 2.1%.
The European Commission’s statistical agency will release the November currency account balance at 09:00 GMT. The region’s current account surplus is forecast to rise to €31.3 billion in November from €30.8 billion the month before.
At 09:30 GMT, the UK’s Office for National Statistics will report on retail sales for the month of December. Receipts at retail stores are expected to decline 0.6% in December despite the holiday season. Excluding fuel, sales are also expected to fall 0.8%.
In North America, the Canadian government will report on manufacturing shipments at 13:30 GMT. Shipments are expected to rise 2% month-on-month in November following a 0.4% drop the month before.
In the United States, the University of Michigan will issue its preliminary consumer sentiment index at 15:00 GMT. The report is expected to show a reading of 97.0 for January for an increase of 1.1 points.
In terms of monetary policy, Federal Reserve official Randal Quarles will deliver a speech at 18:00 GMT. The Fed will hold its first policy meeting of 2018 later this month, where no change in interest rates is expected.
Europe’s common currency edged higher at the start of Asian trading, but continues to trade below 1.2300 US. The EUR/USD exchange rate was last seen hovering at 1.2262 for a gain of 0.2%. The pair is eyeing immediate resistance at the 16 January high of 1.2309.
The Canadian dollar traded within a narrow range against the dollar Thursday as investors assessed the Bank of Canada’s recent decision to raise interest rates. The USD/CAD exchange rate is currently trading in the low 1.2400 region, having declined sharply from last week’s highs near 1.2600. The outlook seems to favour the loonie over the mid-term as the US dollar continues to struggle.
Cable extended its bullish upside on Thursday, climbing above 1.3900 for the first time since the Brexit crisis. The GBP/USD exchange rate was trading in the low 1.3900 region in the Asian session, having gained 0.1% from the previous close. The pair now has its sights set on the 1.4000 resistance.