US PRIVATE PAYROLLS HEADLINE WEDNESDAY’S DATA WIRE
A deluge of economic data will make its way through the financial markets Wednesday, with reports from Europe and the United States set to drive headlines.
German data will headline the early European session with reports on import prices, retail sales and consumer inflation. The preliminary consumer price index (CPI) for May is expected to show monthly growth of 0.3%, which translates into a year-over-year gain of 2%. The harmonised index of consumer prices (HICP), which measures inflation using a statistical method consistent throughout the European Union (EU), is projected to rise 1.8% annually.
Later in the session, Germany will also report on unemployment for the month of May. The number of people without jobs is forecast to fall, though the unemployment rate likely held steady at 5.3%.
The European Commission’s statistical agency will release five sentiment indicators on Wednesday, including reports on services, consumer confidence, industrial confidence, economic sentiment and the overall business climate.
Shifting gears to North America, the ADP payrolls processor will report on US private-sector job creation for the month of May. Jobs growth is forecast to slow to a pace of 189,000 hires compared with 204,000 the previous month. The official nonfarm payrolls report, courtesy of the Labor Department, will be released 48-hours later.
Economists at the Commerce Department will release revised first-quarter GDP data, as well as reports on wholesale inventories and the overall goods trade balance. The US economy likely rose 2.3% annually between January and March, matching the previous estimate.
North of the border, the Bank of Canada (BOC) will deliver a verdict on interest rates at 14:00 GMT. BOC officials are widely expected to stand pat this month, opting instead to leave the benchmark interest rate at 1.25%.
Europe’s common currency has been caught in a monthlong tailspin, with analysts forecasting deeper declines in the near term. EUR/USD was last trading at 1.1537, having declined roughly 1,000 pips from the February high. Levels to watch include 1.1519 on the downside and 1.1600 on the upside.
Declining oil prices and a cautious BOC have weighed on the Canadian dollar as of late. This has allowed USD/CAD to make a clean break above 1.3000. Further gains are possible should the BOC cement its cautious approach to monetary policy on Wednesday.
The New Zealand dollar’s recovery has come up short this week, with prices falling 60 pips from its most recent swing high. NZD/USD was last seen trading right around the 0.6900 mark, where it faces immediate support at 0.6880. On the opposite side of the spectrum, the recent high of 0.6960 offers short-term resistance, followed by the psychological 0.7000 level.