DATA IN FOCUS ON FRIDAY
Economic data remains in the spotlight on Friday, with Europe and Canada set to deliver high-profile reports on trade and employment.
Action begins at 06:00 GMT with a report on German industrial production. Factory output in Europe’s largest economy likely rose 0.3% in April, based on a consensus forecast. In annualized terms, this translates into a gain of 2.8%.
The German government will also report on international trade at 06:00 GMT. Berlin’s trade surplus likely narrowed to €21 billion in April from €22 billion the month before. Exports are projected to fall 0.2% month-on-month. Imports, meanwhile, likely rose 0.6%.
France’s INSEE will report on industrial production later in the morning. The Eurozone’s second-largest economy likely saw its output rise 0.3% month-on-month during April.
The Bank of England (BOE) will be releasing a report on consumer inflation expectations at 09:30 GMT. Inflationary trends are closely monitored by investors because they tie into expectations about monetary policy.
On the topic of monetary policy, the European Central Bank’s Yves Mersch will deliver a speech at 08:15 GMT.
Shifting gears to North America, the Canadian government will report on housing starts, capacity utilization and employment between 12:15 GMT and 12:30 GMT. The employment report is expected to show a net gain of 17,500 jobs for the month of May following a decline of 1.1% the month before. The jobless rate is projected to hold steady at 5.8%.
Meanwhile, the US government will report on wholesale inventories at 14:00 GMT. Inventory levels for April are forecast to remain unchanged.
Energy traders will be keeping a close eye on the weekly US oil rig count, which provides a snapshot of domestic shale production. Rising rig counts are usually seen as bearish for oil prices.
The euro extended its recovery on Thursday, with prices rebounding nearly 300 pips from last week’s swing low. At the time of writing, EUR/USD was hovering around 1.1800 with the bulls eyeing the 1.1830 level. On the opposite side of the ledger, immediate support is located at 1.1767.
The Canadian dollar failed to rally on Thursday even as oil prices made a large comeback. USD/CAD reached a high near 1.3000 before backtracking toward the 1.2980 level where it currently stands. The pair’s next target is the psychological 1.3000 region. A clean break above this level could lead prices toward 1.3050.
The Australian dollar underwent a correction on Thursday after prices reached their highest level in about six weeks. AUD/USD topped out near 0.7680 but has since fallen back to 0.7620. The pair faces immediate resistance in the 0.7660-0.7675 region. On the opposite side of the ledger, the recent low of 0.7590 is likely to present immediate support.