DATA DELUGE EXPECTED FOR FRIDAY
The financial calendar is in full swing on Friday, with a deluge of economic data and monetary policy developments scheduled to come our way.
Action begins at 6:45 GMT when France releases revised second-quarter GDP. The French economy is projected to grow 0.5% between April and June.
PMI data courtesy of IHS Markit will dominate the headlines between 07:00 GMT and 08:00 GMT. Manufacturing, services and composite indicators will be released for Germany, France and the 19-member Eurozone.
Germany’s composite PMI is projected to edge up slightly to 55.9 in September, from 55.8 the previous month. The Eurozone composite indicator likely edged down slightly to 55.5 from 55.7.
The North American session also features a spate of economic releases, beginning at 12:30 GMT with Canadian retail sales and consumer inflation. Canada emerged as the G7’s fastest-growing economy in the first half. Analysts expect retail sales to rise again in July. The consumer price index (CPI) is also projected to strengthen for the month of August.
Markit will also release US services, manufacturing composite PMI at 13:45 GMT. Current projections show a slight improvement in manufacturing conditions and a slight drop in the services gauge. Combined, these results are likely to see little change for the composite indicator.
On the monetary policy front, European Central Bank (ECB) President Mario Draghi is expected to deliver a speech on Friday. British Prime Minister Theresa May is also slated to speak.
The euro recovered lost ground on Friday after a hawkish Federal Reserve drove the US dollar to weekly highs against a basket of its peers. The EUR/USD exchange rate climbed back toward the mid-1.19 region on Thursday, and was last up 0.1% at 1.1955. The pair continues to eye the 1.20 region in the short term. However, gains north of that level could prove difficult now that investors are pricing in a good probability of a December rate hike by the Federal Reserve.
After a volatile mid-week session, cable rebounded Thursday as the greenback lost some of its post-Fed zeal. The GBP/USD exchange rate was last seen trading at 1.3578, a region it has become familiar with over the past week. Cable has strong support at the key 1.3500 psychological mark. On the opposite side of the leger, 1.3600 is the immediate resistance test, followed by 1.3660.
A weaker dollar helped stem gold’s multiweek retreat on Thursday, as bullion climbed back toward $1,300.00 a troy ounce. Prices are down more than $50 over the past two weeks. The spot exchange rate (XAU/USD) was last seen trading at $1,297.00 a troy ounce on the Comex division of the New York Mercantile Exchange. That represents a gain of 0.4%.