European FX Outlook:  The Eurozone PMI headline Europe

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.
• 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 reading headlines Europe with the gauge expected to decelerate slightly in June.
• Canada’s core inflation and retail sales data headline the North American session. 

Friday’s market moving events

• 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.
• German composite PMI is expected to remain unchanged at 53.4 in June.
• The Eurozone composite activity PMI is expected to decelerate to 53.9 in June.
• 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 movers

• Sterling jumped up 150 pips to 1.3250 region 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 after the set of disappointing data reaching as high as 1.1634.
• Watch CAD factoring in the combination of retail sales and inflation data. Rising inflation and retail sales are seen CAD positive. 

Thursday’s macro summary

• The New Zealand Q1 GDP rose 0.5% Q/Q while decelerating to 2.7% y/y.
• Swiss National Bank is expected to hold rates steady at 0.75% in June.
• The Bank of England left the Bank rate at 0.50% as expected, but turned hawkish with the chief economist Andy Haldane voting in favor of a rate hike in a 6-3 pattern. For more details read my Analysis here. 
• The US weekly jobless claims are expected to reach 218K.
• Canada’s ADP employment report saw 2.9K new jobs added in June.
• Philadelphia Fed survey showed activity falling to 19.9 in June from 34.4 in May.
• Minneapolis Federal Reserve Bank President Neel Kashkari said it is unclear whether tax cuts will lead to long-term and sustained economic growth and does not hear businesses say yet that they are investing more due to tax cuts.
• The Bank of England Governor Mark Carney delivered a Mansion-house dinner speech about the new economy, new finance, and new bank.