ECONOMIC DATA, CENTRAL BANK SPEECHES TAKE CENTRE STAGE

A steady stream of economic data and monetary policy considerations will take centre stage on Thursday, giving traders plenty of ammunition to fuel their daily positions.

Action begins at 06:00 GMT with data on German factory orders for the month of May. The Federal Statistics Office is expected to show a 2% increase in factory orders, following a 2.1% decline in April.  

Later in the session, Switzerland will unveil the latest inflation figures. The consumer price index (CPI) is forecast to grow just 0.3% in the 12 months through June, down from the prior month’s 0.5% increase. Compared to May, CPI inflation is forecast to go unchanged.

US Federal Reserve Bank of San Francisco President John Williams is scheduled to deliver a speech during European trading hours. Williams is a member of the Federal Open Market Committee (FOMC), which voted to raise interest rates last month for the third time since December.

The minutes of the June meetings, which were released on Wednesday, signaled that the Fed expects to move forward with the next rate hike as planned.

At 10:00 GMT, European Central Bank (ECB) Board member Peter Praet will deliver a speech that will be closely watched by the financial markets. Shortly after his remarks, the ECB will release its Monetary Policy Meeting Accounts, or the official transcript of the central bank’s recent interest rate meeting.

Traders can expect a heavy release schedule in the North American session on Thursday beginning at 12:15 GMT with a report on private-sector payrolls from ADP Inc. The closely-watched report is expected to show the creation of 185,000 private-sector jobs last month, following a gain of 253,000 in May that was much higher than the official Labor Department estimate.

Meanwhile, the Commerce Department will report on the nation’s trade balance for the month of May at 12:30 GMT. The morning session also features services PMI data from IHS Markit and the Institute for Supply Management, followed by a speech from FOMC member Jerome Powell.

Canadian data are also on the docket today, with reports on building permits and international trade.

EUR/USD

The euro held within a narrow range on Wednesday, as traders awaited fresh catalysts in the form of economic data and monetary policy news. The EUR/USD was last seen hovering in the 1.1340 range. The pair faces immediate support at Wednesday’s low of 1.1315.

USD/CAD

The Canadian dollar has been one of the best-performing currencies of the past month, pushing the USD/CAD below the 1.30 threshold. Momentum is clearly on the side of the loonie, which is eyeing a potential rate hike by the Bank of Canada later this month.

WTI OIL

Crude prices came unhinged on Wednesday after Russia said it would not support any plan to deepen production cuts. WTI sold off in New York trading before paring losses later in the day. WTI had gained around half a percent at the start of European trading. Momentum is still on its side, but the fundamentals are not.