The FX week starts quietly with the only piece of notable economic data coming from Canada. As described in our last post Friday was a challenging one for the CAD and I would only imagine further ground would be lost if monthly wholesale sales missed their target of 0.5%. In June wholesale sales registered growth of 1.8% so a number less that the predicted would surely highlight the 11th largest economy slowing.
Tuesday is extremely Euro focused with Flash data for France and Germany as well as a combined Eurozone figure. This week’s figures include both Services and Manufacturing purchase manager index. Although we had some acceptable figures from the recent German ZEW data I feel due to Brexit there could still be scope for a wobble.
Later on in Tuesdays session we have new home sales for the US and New Zealand’s trade balance which is anticipated to shrink 320M.a widening would
Wednesday sees the release of US existing home sales and US crude oil inventories. Existing home sales are anticipated to reach a figure 5.55M a tiny decline from previous figure. I would expect the data to remain on track. Weekly Crude oil inventories have wavered between 1.7M to 2.5M in the last reading, in any case any erratic reading will bear heavier on the CAD than other majors.
Thursday we have the release of the German IFO business climate data which has registered a number superior to the predicted level in 4 of the last five readings and will be a great acid test for sentiment following Brexit. Later in the session we have monthly Core durable goods data from the US followed by unemployment claims. The goods data release is expected to show 0.4% growth however another negative number will surely put the potential of a FED hike on ice. Unemployment claims are anticipated to reach 265k slightly above the previous reading, typically the data is fairly consistent, reaching or exceeding 4 of the last five readings.
The final trading day of the week turns to the UK with the release of the second estimate GDP. Sterling had a fairly positive week all things consider with retails sales and CPI all exceeding expectation. The last release was in May so the data will give a very broad ‘Post Brexit’ view of the economy. If the figure misses its anticipated 0.6% we should see the GBP slide.
On Friday afternoon focus turns back to the US with the Quarterly Prelim GDP, Goods trade balance and Prelim GDP. Preliminary GDP is expected at 1.1% any diversion from this would be unlikely. The trade balance is predicted to reach -62.3BN and is likely to remain consistent as it has in the last 4 of five readings.
What will be more interesting to hear and of greater interest to markets will be Yellens speech following the data. Although I don’t think we will see a FED hike year it will be interesting see how recent data has been interpreted by the FED chair, any positive comments will surely Bode well for the USD.
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