TRUMP-PUTIN SUMMIT IN FOCUS
Investors are bracing for a highly active week in the financial markets, with economic data, central bankers and corporate earnings in focus. On Monday, a high-profile meeting between US President Donald Trump and Russian counterpart Vladimir Putin will draw headlines.
The Trump-Putin meeting will take place in Helsinki. President Trump is expected to press his Russian counterpart on allegations of meddling in the US presidential election. However, Trump told CBS over the weekend that he has “low expectations” for the upcoming summit.
In terms of economic data, the Italian government will report on its trade balance with the European Union and the rest of the world at 08:00 GMT. One hour later, the European Commission’s statistical agency will do the same. Brussels’ trade surplus is forecast to rise to a seasonally adjusted €19.7 billion in May compared with €18.1 billion the previous month.
Shifting gears to North America, the US Department of Commerce will issue its June retail sales report at 12:30 GMT. Receipts at retail stores are projected to rise 0.6% for June compared with a 0.8% increase in May. Excluding the volatile automobile component, retail sales likely rose 0.4%, according to a median estimate of economists.
Separately, the New York Federal Reserve Bank will issue the Empire State manufacturing index for July. The monthly reading is projected to slide to 22.75 from 25.00 in June.
Later in the session, the US government will report on May business inventories – a figure that is expected to rise 0.4% month-on-month for May.
Europe’s common currency rebounded sharply on Friday after hitting more than one-week lows. EUR/USD bottomed near 1.1627 before recovering near 1.1690 later in the session. At the time of writing, the pair is trading at 1.1678, declining 0.1% from the previous close. From a technical perspective, EUR/USD is trading above the 20-day moving average, which offers immediate support near the 1.1650 level. On the opposite side of the ledger, resistance is likely found at 1.1695.
Cable staged a dramatic recovery on Friday, rebounding more than 100 pips to reach a high near 1.3240. Although downside risks remain, GBP/USD has found support at the 10-day moving average. Investors should remain on high alert for Brexit negotiations, which have been a source of anxiety and confusion for sterling now that the UK is pursuing a soft exit from the European Union.
USD/JPY has defied the correction that befell other dollar pairs on Friday. The pair continues to trade at six-month highs, with prices now treading near 1.1240. Immediate resistance is likely found at 1.1280, which represents the high from 10 January. On the opposite side of the ledger, immediate support is located at 112.00, the low from 12 July.