GLOBAL DATA FLOWS IN THE HEADLINES TUESDAY
A steady stream of economic data will make its way through the financial markets on Tuesday, headlined by Eurozone GDP and US personal incomes and outlays. These and other data could have a significant impact on currency pairs with exposure to the euro and US dollar.
Action begins at 06:00 GMT with a report on German retail sales. Receipts at retail stores likely rose 1% in June after falling 2.1% the month before. In annualized terms, this would translate into 1% growth.
Germany’s statistics agency is back at 08:00 GMT with a report on unemployment. The nation’s jobless rate is forecast to hold steady at 5.2% in July.
At 09:00 GMT, the European Commission’s statistical agency will report on the second-quarter gross domestic product (GDP). The economy is projected to grow 0.4% in the second quarter following a similar advance in January-March.
In a pair of separate releases, Eurostat will report on unemployment and consumer inflation. The June unemployment rate is forecast to hold at 8.3%. Meanwhile, the consumer price index (CPI) is projected to rise 2% annually in July following a similar gain the month before.
Shifting gears to North America, the US Department of Commerce will report on personal income and spending at 12:30 GMT. Personal income for the month of June likely rose 0.4%, according to a median estimate of analysts. A similar gain is also expected for the personal spending category.
The report also contains the latest reading on core personal consumption expenditures, the Federal Reserve’s preferred measure of inflation. The core PCE index is projected 2% annually.
The Canadian government will also release a batch of economic data on Tuesday, including May GDP and June industrial production.
Europe’s common currency is bracing for a potentially active Tuesday session headlined by economic data. The EUR/USD exchange rate reclaimed the 1.1700 handle at the start of the week, though upside was generally contained. The pair is now eyeing immediate resistance at 1.1749, which is the high from 23 July. On the flipside, immediate support is located at 1.1625, the low from Friday.
Cable traded within a narrower range on Monday, as the bulls continued to eye a bullish reversal near the 21-day simple moving average of 1.3200. At the time of writing, the GBP/USD exchange rate is trading near 1.3130, where it was virtually unchanged.
The Canadian dollar saw a little more upside on Monday, as the USD/CAD exchange rate briefly fell below 1.3000 for the first time since mid-June. The pair currently sits at 1.3027, with all eyes on the economic calendar. The pair remains firmly capped below 1.3085, which is the 50-day simple moving average. A breach of this level is needed to generate bullish pressure.