- UK GDP growth expected to accelerate
- Markets expect a pick-up in the US CPI inflation
- WASDE report likely to spur elevated volatility on the grains market
Investors will be offered a broad range of top tier report on the final trading day of the week. Production and GDP data from the United Kingdom will be released in the morning. The US inflation reading and the Canadian labour market report will be released simultaneously in the early afternoon. WASDE report will conclude the day. Note that while no reports from the euro area are scheduled for release, EUR may enjoy elevated volatility today due to a number of ECB speakers.
9:30 am BST - UK, GDP and production data. The Brexit talks are continuing but little progress is being made. Government tries to find a common ground with Labour Party but neither side is eager to drop their red lines. Amid this uncertainty GBP traders will be offered a GDP report for Q1 along with manufacturing and industrial production numbers for March. While GDP growth is expected to pick-up from 0.2% QoQ to 0.5 % QoQ, production figures are forecasted to deteriorate. Industrial production should slow from 0.6% MoM to 0.1% MoM while manufacturing production is seen coming in at 0.2% MoM against previous value of 0.9% MoM.
1:30 pm BST - US, CPI inflation for April. The US CPI inflation slowed significantly throughout the second half of 2018 and this slowdown prolonged into the first months of 2019. However, the US inflation accelerated significantly in March and market consensus signals that the trend may continue. The headline measure is seen rising from 1.9% YoY to 2.1% YoY while the core gauge should accelerate from 2% YoY to 2.1% YoY. While in such an uncertain macroeconomic environment we have now it seems unlikely that the Federal Reserve will raise rates, a pick-up in inflation may distance away any potential rate cut rumours.
1:30 pm BST - Canada, Labour market report for April. The US NFP report was released last week and now the time has come for Canada to release its labour market report. A small employment change of positive 10k is expected. Participation and unemployment rates are forecasted to remain at their prior values of 65.7% and 5.8%. Apart from whether we see a beat or miss in headline, contribution of part-time and full-time contracts may have an impact on CAD.
5:00 pm BST - WASDE report. Agricultural commodities have found themselves under pressure as of late as the US-China trade tensions re-escalated. The outlook for the grains market is likely to be blurry as long as the world's two biggest economies keep skirmishing. However, WASDE report is scheduled to be released today and it almost always triggers short-term price swings on corn, wheat or soybeans. Moreover, May’s reports are important as they are the first ones to offer estimates for the next crop season.
Central bank speakers scheduled for today:
- 8:00 am BST - ECB’s Villeroy
- 8:00 am BST - ECB’s Praet
- 8:30 am BST - ECB’s Lautenschlaeger
- 10:30 am BST - ECB’s Visco
- 1:30 pm BST - Fed’s Brainard
- 2:05 pm BST - Fed’s Bostic
- 3:00 pm BST - Fed’s Williams
- 3:30 pm BST - ECB’s Coeure
USDCAD managed to break above the upper limit of the short-term consolidation range (1.3450). The breakout level served as a floor later on and bulls could use it to regroup before attacking late-2018 high at 1.3660. Source: xStation5