Global Data Flows Set To Drive Market Activity On Thursday
|Economic data once again takes the spotlight on Thursday, with the United Kingdom and the United States drawing most of the headlines.
Action begins at 06:45 GMT with the French industrial output. The monthly report is expected to show a 0.5% decline in industrial production in June, following an increase of 1.9% in May.
A little more than an hour later, Italy will report on its global trade balance. Italy is the Eurozone’s third-largest economy.
The UK Office for National Statistics will unleash a torrent of economic data at 08:30 GMT, including manufacturing production, industrial production, and trade.
Industrial production – the widest measure of factory output – is forecast to rise 0.1% in June, translating into a year-over-year decline of 0.1%. Meanwhile, manufacturing output is forecast to flat-line compared to May and rise 0.6% year-over-year.
On the trade front, London’s goods deficit is forecast to narrow slightly to £11 billion in June from £11.8 billion the previous month.
In North America, the US Labor Department will report on producer inflation and initial jobless claims at 12:30 GMT. Producer prices rose 0.1% in July, based on a median estimate of economists. Meanwhile, weekly jobless claims are forecast to hold steady at a seasonally adjusted 240,000 for the period ended August 5.
In terms of monetary policy, Federal Reserve Bank of New York President William Dudley will deliver a speech at 14:00 GMT. The Federal Reserve’s policy-setting board will remain on the sidelines until September.
Commodity traders will be keeping a close eye on gold prices following a massive surge on Wednesday that was triggered by North Korea tensions. Gold futures are currently trading near two-month highs on the Comex division of the New York Mercantile Exchange. The US dollar index (DXY), meanwhile, is holding steady.
EUR/USD
The euro resumed its downward consolidation in mid-week trading, with prices falling nearly 150 pips from last week’s multi-year high. The EUR/USD exchange rate was down 0.2% overnight, where it faces immediate resistance near Wednesday’s low. On the other side of the spectrum, initial resistance is located at the 10-day simple moving average (SMA) of 1.1785.
GBP/USD
Like the euro, the British pound resumed its downward correction on Wednesday, with the GBP/USD briefly crossing below 1.30. Prices are down around 240 pips from last week’s high. The pair has broken the 20-day MA support, leaving it exposed to further downside risk in the short term.
GOLD
Bullion spiked 1.5% on Wednesday, reaching its highest level in nearly two months. The technical picture is bullish, but investors should remain extra cautious of price action the closer bullion approaches $1,300.00. That level has proven to be a formidable resistance all year long.
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