NORTH AMERICAN DATA IN THE SPOTLIGHT
A deluge of economic data will flow through the financial markets on Thursday, with US and Canadian releases set to generate the bulk of the headlines.
Ahead of North America, investors can expect several European releases to hit the newswire, including Swiss and Spanish GDP figures. The Swiss economy likely grew 2.3% in the first quarter. Analysts are projecting Spanish growth to accelerate 2.9% annually.
France is also set to publish inflation numbers at 06:45 GMT. The consumer and producer indices will be released at that time.
Italy, a nation going through another political crisis, will release inflation and unemployment figures throughout the day.
At 09:00 GMT, the European Commission’s statistical agency will report on consumer inflation for the 19-member Eurozone. According to analysts, the preliminary reading will likely show annual growth of 1.6% for May, up from 1.2% the previous month. Core inflation, which strips away volatile goods such as food and energy, likely jumped 1% year-over-year.
Shifting gears to North America, the US Commerce Department will report on personal incomes and outlays at 12:30 GMT. The monthly report also contains the latest reading on core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation. The core PCE index likely rose 2% year-over-year in April.
Labor economists will also report on initial jobless claims at 12:30 GMT. Meanwhile, ISM-Chicago will issue its monthly purchasing managers’ index (PMI) for May.
North of the US border, the Canadian government will report on first-quarter GDP at 12:30 GMT. The Canadian economy is projected to grow 1.8% between January-March, up from 1.7% the previous quarter.
On the policy front, Federal Open Market Committee (FOMC) members Raphael Bostic and Lael Brainard will deliver speeches at 16:45 GMT and 17:00 GMT, respectively.
Europe’s common currency got some reprieve on Wednesday as the US dollar eased off five-month highs. EUR/USD recovered around 1.1650, where it faces firm support around 1.1550. On the opposite side of the ledger, gains are likely capped below 1.1725 for the time being.
The loonie bounced back on Thursday after the Bank of Canada (BOC) gave strong indications that interest rates will continue to rise this year. According to analysts, the BCO could raise rates as early as July. After hitting a high of 1.3038, USD/CAD has plunged around 150 pips to the 1.2890 region. Further declines could be in store should Canada’s GDP figures surprise to the upside.
Cable drifted between gains and losses Wednesday before settling higher, as prices approached the 1.3300 US handle. GBP/USD is currently trading just below those levels, as the pair remains vulnerable to a bigger retracement. Key support continues to hold at 1.3255 for the time being.