US CONSUMER DATA TAKES CENTRE STAGE FRIDAY
US economic data will make headlines on Friday, giving investors plenty of clues about the health of the world’s largest economy.
The Labor Department will release the Consumer Price Index (CPI) at 12:30 GMT. The report is expected to show a sharp pickup in inflation thanks to rebounding oil prices. Annual CPI is expected to come in at 2.3% in September, up from 1.9% the month before. The core CPI rate, which excludes food and energy, is expected to rise 1.8% year-over-year.
A report on retail sales from the Commerce Department will be released alongside the CPI data. Receipts at retail stores are forecast to rise 1.7% in September, following a 0.2% decline the previous month. Excluding automobiles, sales are expected to climb 0.3%.
The Commerce Department will release its monthly business inventories report at 14:00 GMT. Inventories are expected to rise 0.7% in August after climbing 0.2% the month before.
The University of Michigan will release the preliminary consumer sentiment index at 14:00 GMT. Consumer confidence is forecast to go largely unchanged for the month.
Later in the day, Baker Hughes Inc. will report on the weekly rig count, which has been known to generate volatility in crude prices.
On the central bank circuit, Federal Open Market Committee (FOMC) members Robert Kaplan and Jerome Powell are scheduled to deliver speeches in the afternoon. Federal Reserve Bank of Chicago President Charles Evans will also deliver a speech.
The euro’s gains moderated on Thursday, as the EUR/USD eased off daily highs of 1.1878. The pair traded within a narrow range during Friday’s Asian session. Initial resistance is being met at the 1.1830-1.1840 level, which corresponds to the 20-day and 55-day moving averages. A close above this level on Friday could generate support back toward the 1.1900 level. On the opposite side of the ledger, immediate support is located at the August low of 1.1662.
The British pound experienced a series of volatile moves on Thursday. Cable bottomed at 1.3118, the lowest since Monday, before completely reversing losses later in the day. The GBP/USD is currently trading around 1.3260, where it faces immediate support at 1.3200. A break below that level could expose the 1.3120 support area, followed by the 9 October low of 1.3075. On the flipside, resistance is likely to be met north of 1.3300.
Oil prices snapped a three-day winning streak on Thursday, as the market consolidated following a series of sharp rallies. US crude prices traded below $51.00 a barrel through the Asian session. The contract remains in a solid buy opportunity over the medium term, but is less attractive on the 15-minute charts. Baker Hughes data on Friday could provide the necessary spark in either direction.