DATA-DEPENDENT TRADERS WILL HAVE PLENTY TO TALK ABOUT ON THURSDAY
A deluge of economic data will make the rounds on Thursday, giving investors the latest insight into the Eurozone and US economies.
Market participants will be up bright and early for the release of the German consumer confidence survey, courtesy of GfK. The 06:00 GMT release is expected to show a slight increase in the confidence level of German consumers.
The European Commission’s statistical agency will release a spate of sentiment indicators at 09:00 GMT, including services sentiment, consumer confidence, economic sentiment, business climate and industrial confidence. The September data sets are expected to confirm steady progress in the 19-member euro area.
Three hours later, Germany will release preliminary CPI data for the month of September. The consumer price index is forecast to rise 1.8% in the 12 months through September, unchanged from August.
Shifting gears to North America, the Labor Department kicks off Thursday trading with a weekly report on jobless claims. At the same time, the Department of Commerce will issue reports on the goods trade balance and second quarter GDP. The third and final estimate of gross domestic product is expected to show 3% annual growth between April and June, unchanged from the previous estimate.
Investors will also be busy keeping track of central bank speeches on Thursday. A pair of European Central Bank (ECB) policymakers are scheduled to speak, followed by Federal Reserve Governors Esther George and Stanley Fischer.
Fed officials are becoming increasingly hawkish on the prospect of a December interest rate increase. The hawkish posture has driven sharp gains in the US dollar, which once again proves the bizarre concept of “buying and rumour and selling the fact.” Between mid-2014 and January 2017, the US dollar index posted monstrous gains on the mere expectation that rates might rise one day. Now that rates have been hiked four times, it’s no longer seen as a big deal.
The euro got whacked again on Wednesday, falling to its lowest level in over a month. The EUR/USD exchange rate is trading around 1.1740, Prices are now eyeing the August low of 1.1661. Losing this level could prove catastrophic for the euro’s bullish run.
The British pound suffered another setback Wednesday, with prices falling below 1.34 US. Cable is currently in a four-day slump even as markets continue to price in a 2017 rate hike by the Bank of England. The GBP/USD faces immediate support at 1.3364. On the upside, immediate resistance is likely found at 1.3490.
A dovish Stephen Poloz on Wednesday triggered another slide in the Canadian dollar, with the USD/CAD climbing to one-month highs. The pair has gained another 0.1% on Thursday and is up a whopping 400 pips since 8 September. The next major resistance is 1.2464, which is the 50-day moving average.