The global financial markets will be clued in to the economic calendar on Friday, with investors anticipating high profile reports from both sides of the Atlantic.
Action begins at 07:00 GMT with a report on German producer inflation. The producer price index (PPI) is forecast to rise 0.2% in December, following a 0.1% increase the month before. In annualized terms, this would translate into a gain of 2.3%.
Later in the morning, the Swiss government will also report on wholesale inflation via the producer price index. Producer prices are projected to climb 0.4% month-on-month after climbing 0.6% the month before. That would translate into a year-over-year gain of 2.1%.
The European Commission’s statistical agency will release the November currency account balance at 09:00 GMT. The region’s current account surplus is forecast to rise to €31.3 billion in November from €30.8 billion the month before.
At 09:30 GMT, the UK’s Office for National Statistics will report on retail sales for the month of December. Receipts at retail stores are expected to decline 0.6% in December despite the holiday season. Excluding fuel, sales are also expected to fall 0.8%.
In North America, the Canadian government will report on manufacturing shipments at 13:30 GMT. Shipments are expected to rise 2% month-on-month in November following a 0.4% drop the month before.
In the United States, the University of Michigan will issue its preliminary consumer sentiment index at 15:00 GMT. The report is expected to show a reading of 97.0 for January for an increase of 1.1 points.
In terms of monetary policy, Federal Reserve official Randal Quarles will deliver a speech at 18:00 GMT. The Fed will hold its first policy meeting of 2018 later this month, where no change in interest rates is expected.
EUR/USD
Europe’s common currency edged higher at the start of Asian trading, but continues to trade below 1.2300 US. The EUR/USD exchange rate was last seen hovering at 1.2262 for a gain of 0.2%. The pair is eyeing immediate resistance at the 16 January high of 1.2309.
USD/CAD
The Canadian dollar traded within a narrow range against the dollar Thursday as investors assessed the Bank of Canada’s recent decision to raise interest rates. The USD/CAD exchange rate is currently trading in the low 1.2400 region, having declined sharply from last week’s highs near 1.2600. The outlook seems to favour the loonie over the mid-term as the US dollar continues to struggle.
GBP/USD
Cable extended its bullish upside on Thursday, climbing above 1.3900 for the first time since the Brexit crisis. The GBP/USD exchange rate was trading in the low 1.3900 region in the Asian session, having gained 0.1% from the previous close. The pair now has its sights set on the 1.4000 resistance.
