Economic calendar: Inflation day

Summary:
- Italy and German to release CPI figures in the morning
- Canadian economy expected to have grown 1.2% YoY in Q1 2019
- US PCE inflation seen at 1.6% YoY in April

Investors will be offered a few noteworthy readings on the final trading day of the week. CPI data from the EU member countries will be released throughout the European trading session with special attention paid to the Italian (10:00 am BST) and German (1:00 pm BST) prints. The Italian data is expected to show a slight slowdown in both headline and core measures. More significant moderation is expected in terms of the German reading as headline gauge is expected to slip from 2% YoY in April to 1.6% YoY in May. Note that Spanish and French readings released earlier this week also showed a slowdown.

Moving onto the North American trading hours, market participants will be offered data from the US and Canada. The US PCE inflation for April will be released at 1:30 pm BST. Note that this is the Fed's preferred measure of inflation therefore it may be wise to keep track of it. Market consensus expects a pick-up to 1.6% YoY. Simultaneously, Canadian GDP report for March will be released. Full-Q1 figures will be released along with it therefore some additional volatility on CAD market may surface. Canadian economy is expected to have grown 1.2% YoY in the first three months of 2019.

Last but not least, University of Michigan will release consumer sentiment data at 3:00 pm BST. However, as this will be the second release for May one should not expect the reading to deviate much from the initial print of 102.4 pts.

Central bankers’ speeches:
- 9:00 am BST - ECB’s Visco
- 2:15 pm BST - Fed’s Bostic
- 5:00 pm BST - Fed’s Williams

EURUSD once again failed to break above the downward sloping trendline and, in turn, has once again revisited 1.1117 handle. EUR underperformed as possibility of new Rome-Brussels battle dented moods while USD outperformed as investors flew for quality amid the latest market turmoil. Source: xStation5

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