CANADIAN CONSUMER PRICES, FED SPEAKERS ON DECK FOR FRIDAY
North American releases will headline a moderately active session on Friday, giving investors more time to parse through corporate earnings and geopolitical developments. A meeting of the International Monetary Fund (IMF) may also produce tangible headlines.
In terms of economic data, action begins at 06:00 GMT with a report on German producer inflation. Germany’s producer price index (PPI) likely rose 0.2% during the month of March, which translates into a year-over-year gain of 2%. PPI fell 0.1% in February.
On the monetary policy front, Bank of England (BOE) official Michael Saunders will deliver a speech at 09:30 GMT.
Shifting gears to North America, the Canadian government will report on retail sales and consumer inflation at 12:30 GMT. The retail sales report is likely to show growth of 0.3% for February after a similar gain the month before. Excluding fuel sales, retail receipts are forecast to rise by a similar amount. Retail receipts are a proxy for consumer spending and are therefore closely watched by the financial markets.
Canada’s report on consumer inflation is expected to show growth of 0.4% in March after a gain of 0.6% the month before. In annual terms, this translates into growth of 2.2%.
The North American session will also see the release of the Eurozone consumer confidence report. The monthly indicator, which is released by the European Commission, is expected to show a decline to -0.2 in April from +0.1 in March.
A pair of Federal Reserve officials will also be in the headlines on Friday. Charles Evans of the Chicago Fed and John Williams of San Francisco are scheduled to deliver speeches in the morning. Williams is also a member of this year’s Federal Open Market Committee (FOMC), which voted to raise interest rates last month.
Europe’s common currency failed to extend its recovery on Thursday, with prices falling back toward the low-1.2330 region. EUR/USD was last seen trading at 1.2340, where it was down 0.1% from the previous close. The pair is testing immediate support at 1.2330. On the opposite side of the spectrum, resistance is likely found at 1.2400.
The Canadian dollar bounced off its recent lows on Thursday to return above 1.2600. The USD/CAD exchange rate would add another 70 pips to trade near 1.2670. Canadian retail sales and CPI data will likely determine the pair’s next move, although recent price action suggests further gains are in store.
Cable extended its downside on Thursday, with prices falling around 150 pips. The pair broke beneath 1.4100 and was last seen trading at 1.4074. GBP/USD faces immediate support at 1.4035. On the opposite side of the ledger, resistance is seen at 1.4120.