US CONSUMER INFLATION IN THE SPOTLIGHT ON THURSDAY
Economic data is back in focus Thursday, with reports from Europe and the United States set to headline an active newswire. Investors will also get a small dose of monetary policy speculation in the form of ECB meeting minutes and a Federal Reserve speaker.
The German government will kick off the session with a final estimate of June consumer inflation. The consumer price index (CPI) is projected to rise 0.1% month-on-month and 2.1% annually. The harmonised index of consumer prices (HICP) is projected to grow 2.1% compared with 12 months earlier.
France will also issue final CPI figures for June at 06:45 GMT. The EU-harmonised CPI inflation rate is forecast to grow 2.4% annually.
Shifting gears to Brussels, the European Commission’s statistical agency will report on industrial production at 09:00 GMT. Output across Eurozone factories likely rose 1.2% in May following a 0.9% drop the month before. That translates into a year-over-year growth rate of 2.1%.
At 11:30 GMT, the European Central Bank (ECB) will release the account of its most recent policy meeting, where officials unveiled a plan to wind down their record stimulus program.
The North American session will begin with a myriad of developments, chief among them being US CPI figures. Consumer inflation in the world’s largest economy likely rise 0.2% for June and 2.9% annually. So-called core inflation, which strips away food and energy costs, is projected to climb 2.3% year-over-year.
At the same time as the CPI report, the Labor Department will unveil weekly jobless claims numbers. The number of Americans filing for first-time unemployment benefits likely fell by 6,000 to 225,000 in the week ended 3 July.
Federal Open Market Committee (FOMC) member Neel Kashkari is scheduled to deliver a speech at 12:30 GMT.
Europe’s common currency nosedived on Wednesday, as EUR/USD fell nearly 80 pips from its intraday high. The pair now sits at 1.1678. The euro-dollar exchange rate is in a bearish predicament insofar as prices hold below 1.1700. If price action penetrates this level, immediate resistance is likely found at 1.1725.
The Canadian dollar suffered fresh losses on Wednesday even after its central bank in Ottawa voted to raise interest rates for the fourth time in 12 months. USD/CAD is now trading above 1.3200 for the first time in over a week after tacking on more than 150 pips following Wednesday’s intraday low of 1.3068.
Cable was another dollar casualty on Wednesday, as the pair broke below 1.3200 for the first time since early July. GBP/USD is currently trading just above the 1.3200 level, though negative sentiment surrounding Brexit could leave the pair exposed to further losses in the short run.