US DATA POINTS KICKOFF ACTIVE WEEK FOR MARKETS
Ahead of an active week in the financial markets, Monday’s session is considered relatively calm from the perspective of economic data. Nevertheless, a pair of US data releases will make headlines at the start of North American trading.
Following a mostly quiet European session, the Federal Reserve Bank of Chicago will release the June National Activity Index at 12:30 GMT. The monthly report is designed to track overall economic activity in the world’s largest economy. In May, the National Activity Index reached -0.15.
North of the border, the Canadian government will report on wholesale sales at 12:30 GMT. The monthly gauge is projected to show 0.6% growth for May following a 0.1% uptick the month before.
At 14:00 GMT, the National Association of Realtors (NAR) will report on the US existing home sales for the month of June. The latest reading is projected to show growth of 1.5% to a seasonally adjusted 5.47-million units. In May, existing home sales dipped slightly to 5.43 million.
The European Commission’s statistical agency will release the preliminary consumer confidence index for July at 14:00 GMT. The monthly print is expected to come in at -0.75 compared with 0.50 the month before. Measures of consumer confidence are used to gauge trends in consumer spending, which is a key driver of economic output for most advanced industrialized economies.
The Canadian dollar is coming off a productive Friday session following the release of solid retail sales figures. As a result, USD/CAD plunged to 1.3145 from a high of around 1.3300 earlier in the week. The pair has declined another 0.1% on Monday to trade at 1.3127. Investors can expect greater volatility for this pair amid NAFTA negotiations, central bank policy, and fluctuating oil prices.
Europe’s common currency extended its rally against a slumping dollar on Monday, with prices climbing 0.2% to 1.1743. The EUR/USD exchange rate jumped 73 pips, or 0.6%, to 1.1718 on Friday as the dollar fell against a basket of currencies. The currency pair faces immediate support at 1.1695, followed by 1.1650. On the opposite side of the ledger, EUR/USD is eyeing resistance at 1.1750, followed by 1.1790.
The Japanese yen opened the week in positive territory amid speculation that the Bank of Japan (BOJ) is considering tweaking its bond-buying program next week. USD/JPY is down 0.5% on Monday, extending its two-day slide to roughly 1%. The pair now sits at 110.84. Last week, USD/JPY surged to its highest level in six months. Short-sellers are being told to target USD/JPY at 108.10, with a stop limit at 113.40, according to Barclays. This suggests that analysts are pricing a bigger decline for the pair amid heightened trade tensions involving the US.