European FX Outlook: German Ifo business climate and first revision of UK GDP headline

What you need to know before markets open

• The risk is back on with the US President Trump openly talking about tariffs implementation while canceling the summit with the North Korean leader Kim Jong Un.
• North Korea said it is open for meeting the US at all times.
• The UK first quarter GDP might bring slightly better results in the second reading, although forecast remains unchanged. For details of UK GDP read my Preview here.
• The Sveriges Riksbank celebrates 350th anniversary with high-fliers including Fed’s chairman Powell, Bank of England Governor Carney and the ECB’s Coeuré talking about the past, present, and future of monetary policy.
• The Federal Reserve Bank of Dallas is hosting regional Fed presidents for discussion about technology in business in Dallas, Texas.

Friday’s market moving events

• Tokyo core CPI rose 0.5% y/y in May, missing the market expectations.
• German Ifo business climate indicator is expected to slide further to 102.0 in May.
• The first revision of the first quarter UK GDP is expected to deliver slightly better results with growth reaching 0.1% Q/Q and 1.2% y/y. For details of UK GDP read my Preview here.
• RBA Assistant Governor Michele Bullock is scheduled to speak at De Nederlandsche Bank's Housing Market seminar, in Amsterdam at 12:00 GMT.
• The US durable goods orders are seen falling -1.4% m/m while core durable goods orders excluding transportation are set to rise 0.5% m/m in April.
• ECB Executive Board member Benoit Coeuré participates in a high-level panel at Sveriges Riksbank’s 350th-anniversary celebration in Stockholm at 13:15 GMT.
• Federal Reserve chairman Jerome Powell participates in a panel discussion on "Financial Stability and Central Bank Transparency" at Sveriges Riksbank’s 350th-anniversary celebration in Stockholm at 13:20 GMT.
• The Bank of England Governor Mark Carney participates in a panel discussion on "The future of central banking?" at Sveriges Riksbank’s 350th-anniversary celebration in Stockholm at 13:20 GMT.
• The US Michigan consumer sentiment index is expected to remain unchanged at 98.38 in May.
• Chicago Federal Reserve Bank President Charles Evans is expected to participate in a panel discussion with Dallas Federal Reserve Bank President Robert Kaplan and Atlanta Federal Reserve Bank President Raphael Bostic at the Federal Reserve Bank of Dallas conference entitled "Technology- Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" in Dallas at 15:45 GMT.

Major market movers

• Watch GBP factoring in the first revision of Q1 UK GDP and read how to trade UK GDP release with GBP/USD here. 
• Watch USD reacting to the US durable goods orders report and read how to trade durables with EUR/USD here.

Thursday’s macro summary

• German Gfk consumer confidence decelerated slightly to 10.7 in June.
• The first revision of German Q1 GDP saw the growth rates unchanged at 0.3% Q/Q and 2.3% y/y with investment and household consumption being the main drivers of growth while government spending dragged the growth down.
• The Bank of England Governor Mark Carney said the measures to improve financial conduct "are all very constructive but they are not yet sufficient" showing LIBOR as a prime example of critical hard market infrastructure that has not kept up with market developments while delivering opening remarks at the Market forum organized by the Bank of England in London.
• The outgoing New York Federal Reserve Bank President William Dudley said “time is of the essence” in global transition from LIBOR to alternative reference rates. 
• ECB says financial stability conditions in Euro area remain favorable but risk-taking intensified. 
• The UK retail sales rose 1.6% m/m in April double the expectation while the core retail sales 1.2% m/m in April. 
• ECB chief economist Peter Praet delivering lunchtime keynote speech said that ECB waits to see the Italian government programme, noting that space to stimulate demand in Italy is difficult because of high debt.
• ECB's Vasiliauskas said he doesn't disagree with forecasts of ECB rate hike in six months.
• ECB meeting minutes confirmed the policy standby with inflation below the targeted level and external risks to growth outlook in the Eurozone increasing.
• The US initial jobless claims increased to 234K, exceeding the market expectations of 220K in the week ending May 18.
• The US existing home sales fell 2.5% m/m in April to 5.46 million.
• Atlanta Federal Reserve Bank President Raphael Bostic repeated that he expects three interest rate hikes this year.