American FX Outlook: The Bank of Canada inflation and retail sales headline Friday

What you need to know before markets open

• OPEC meeting is set to decide on the oil production quotas with leaders from Russia and Saudi Arabia wanting to pump up more oil to meet the demand, while Iran disagrees.
• Media ping-pong between China and the US continues regarding the US-led trade war.
• UK Government said it does not expect no-deal Brexit.
• The Eurozone agreed on the final elements of a plan to get Greece out of its eight-year bailout program and make its massive debt more manageable.
• The Eurozone final PMI rose in June mainly due to improved performance in services.
• Canada’s core inflation and retail sales data headline the North American session. 

Friday's upcoming market moving events

• Canada’s retail sales are expected to stagnate in May with core retail sales seen rising 0.5% m/m in April.
• The Bank of Canada core inflation is expected to decelerate to 1.4% y/y in May.

Major market themes

• Sterling continues higher against the US dollar rising 200 pips above 1.3300 after the Bank of England’s hawkish turn with the Bank’s chief economist Haldane joining the camp of rate hike promoters. 
• Euro jumped against the US Dollar boosted by the confidence stemming from a deal between creditors with Greece and the Eurozone PMI picking up in June.
• Watch CAD factoring in the combination of retail sales and inflation data. Rising inflation and retail sales are seen CAD positive. 

Earlier in Asia/Europe

• Japan’s inflation rose 0.7% y/y in May with core inflation rising 0.3% y/y.
• French first quarter GDP is expected to rise 0.2% Q/Q.
• French composite PMI increased to 55.6 in June from 54.2 in May.
• German composite PMI rose to 54.2 in June from 53.4 in May.
• The Eurozone composite activity PMI rose to 54.8 in June compared to 54.1 in May.
• UK Government: We do not expect no-deal Brexit.