DATA FROM UK, US SET TO DRIVE MARKETS ON FRIDAY
A steady stream of economic data will make its way through the financial markets on Friday, with the United Kingdom and the United States set to release the most noteworthy reports. Meanwhile, traders will be gauging overall market sentiment as Wall Street continues to recover from one of its worst weeks since the financial crisis.
The first calendar event of the day is a report on German wholesale prices, which is set for release at 07:00 GMT. The monthly report is expected to show a 0.2% increase in the wholesale price index for January.
Two-and-a-half hours later, the UK’s Office for National Statistics will present the latest retail sales numbers for January. Receipts at retail stores are forecast to jump 0.5% following a sharp decline during Christmas. In annualized terms, retail sales are expected to grow 2.6%.
Shifting gears, to North America, a report on US housing starts and building permits will make headlines at 13:30 GMT. Housing starts are forecast to climb 3.4% in January to a seasonally adjusted annual rate of 1.234 million units. Building permits – a bellwether of future construction intentions – are expected to climb 3.5% to 1.3 million.
Later in the session, the University of Michigan will release the preliminary consumer sentiment index for February. The monthly reading of 95.5 is expected to be only slightly lower than the January print.
Meanwhile, energy traders will be keeping close tabs on the weekly oil rig count data from Baker Hughes Inc.
The US dollar is wrapping up a disastrous week where it fell to fresh three-year lows against a basket of world currencies. The US dollar index (DXY) was last seen trading at 88.59, more than reversing last week’s solid gain. The currency is down nearly 4% year-to-date, with more losses expected as central banks in Europe and Canada continue to roll back monetary easing.
Dollar pains drove the euro firmly higher on Thursday, a trend that continued into a mostly subdued Asian session on Friday. The EUR/USD exchange rate edged up 0.1% to 1.2512, where it was testing new multi-year highs. The pair is eyeing a strong resistance test around 1.2540.
Cable was back in the driver’s seat on Thursday, as prices returned to 1.4100 for the first time in over a week. The GBP/USD exchange rate was last up 0.1% at 1.4111, where it had reversed most of last week’s slump. The pair is now approaching an important target above 1.4150 as the next cue for the bulls.
After trading sideways for two days, US oil prices rebounded sharply in back-to-back sessions. The contract is trading at $61.50 and could be poised to continue higher should the weekly inventory data show a drop in active rig counts.