The European Central Bank’s summit in Portugal will continue to draw headlines on Tuesday. Monetary policy discussions will be accompanied by a handful of data releases from the European Union and United States.
In terms of economic data, action begins at 05:45 GMT when the Swiss State Secretariat for Economic Affairs (SECO) releases its latest economic forecast. The report monitors the growth trajectories of various components of Switzerland’s gross domestic product (GDP).
At 08:00 GMT, the European Commission’s statistical agency will report on the current account balance. Brussels’ surplus is forecast to narrow to €30.2 billion in April compared with €32 billion the month before.
A report on Eurozone construction output will also make headlines at 09:00 GMT. In seasonally adjusted terms, construction spending is forecast to decline 0.8% month-on-month in April.
Shifting gears to the United States, at 12:30 GMT the Department of Commerce will issue its monthly report on building permits. Permits are expected to fall 1.4% to a 1.350 million-unit pace.
Energy traders will also be keeping a close eye on weekly crude inventory data courtesy of the American Petroleum Institute (API) at 20:30 GMT. The official inventory report released by the US Energy Information Administration (EIA) is due the following morning.
On the monetary policy front, ECB President, Mario Draghi, is expected to deliver public remarks in Portugal on Tuesday. ECB Executive Board member, Peter Praet, is also scheduled to speak publicly.
Federal Reserve Bank of St. Louis President, James Bullard, is scheduled to speak before the North American session kicks off.
EUR/USD
Europe’s common currency is in recovery mode at the start of the week after experiencing a flash crash last Thursday at the hands of the ECB. EUR/USD is up roughly 65 pips from Friday’s swing low and is now trading near 1.1630. Immediate support is located at 1.1543, the low from Friday. On the opposite side of the ledger, immediate resistance is located at the 1.1700 level.
GBP/USD
Cable is also consolidating off recent lows this week, with prices hovering near 1.3265. GBP/USD is attempting to generate support ahead of the Bank of England’s upcoming policy meeting. Although no change in policy is expected, BOE officials could outline their expectations for the rest of the year.
USD/JPY
After reaching a high near 110.90 on Friday, USD/JPY is back on the defensive as the currency markets continue to consolidate. The pair is down 0.4% in Asian trade and is currently valued at 110.12. Despite recent volatile moves, USD/JPY is expected to stay rangebound between 108.00-111.00 for the foreseeable future.
