EUROPE, US IN FOCUS ON THURSDAY
Developments from both sides of the Atlantic Ocean will headline the financial markets on Thursday, as traders sift through a steady stream of economic data and monetary policy speeches.
Action begins at 06:00 GMT with a report on German consumer confidence courtesy of GfK. The consumer confidence index for June is forecast to hold at 10.8. At the same time, the German government will release revised GDP data. Europe’s largest economy is forecast to grow 1.5% annually in the first quarter.
UK National Statistics is scheduled to report on retail sales at 08:30 GMT. Retail receipts, which are used to gauge consumer spending habits, likely rose 0.7% in April. Excluding fuel, sales likely rose just 0.1%.
In terms of monetary policy, several speakers are scheduled to deliver statements throughout the day. Bank of England (BOE) Governor Mark Carney has two speeches lined up: one at 08:00 GMT and the other at 17:00 GMT.
Shifting gears to North America, the US Department of Labor will report on initial jobless claims at 12:30 GMT. The number of Americans filing for unemployment benefits likely fell by 2,000 to 220,000 in the latest week.
Separately, the Department of Commerce will report on existing home sales for the month of April. Home sales are projected to edge down 0.2% month-on-month after rising 1.1% the month before.
At 15:00 GMT, the Kansas City Fed will release its manufacturing report for the month of May.
Federal Open Market Committee (FOMC) members Raphael Bostic and Patrick Harker are scheduled to speak publicly throughout the day. Fed Bank of New York President William Dudley will also deliver remarks at the start of European trading.
Europe’s common currency is sliding toward fresh six-month lows, as weak economic data and political uncertainty continue to weigh. EUR/USD fell below 1.1700 in the Asian session and was last seen trading near 1.1698. The pair has broken below the December low point, lowering the support target to around 1.1625. On the opposite side of the ledger, immediate resistance is located around 1.1767.
Cable established fresh lows on Wednesday, with prices bottoming in the low 1.3300 range. GBP/USD has since recovered to around 1.3355 but the outlook remains tilted to the downside. The pair has established an interim support level just above 1.3300.
The dollar-yen exchange rate has declined sharply this week, giving up earlier gains that drove prices north of 111.00. At the time of writing, USD/JPY was trading at 109.51. A rebound out of the hole would confirm a double-bottom formation for the pair, likely sending prices higher in the interim. However, that picture will depend on the response from the US dollar to high-profile economic data.