European FX Outlook: UK first quarter GDP headlines

What you need to know before markets open

• The ECB left policy rates unchanged as expected and left the future of its asset purchasing program unchanged citing caution in providing ample liquidity at times of forward-looking indicators slowing down. Although the ECB attributed the current slowdown to temporary factors it still remained ultra-dovish saying further progress is needed to achieve its goals of price stability.
• The Bank of Japan kept the monetary policy unchanged as widely expected in April.
• China's Premier Li Keqiang said he will open to trade negotiations with the US.
• The UK GDP is expected to retain the 0.4% quarterly rise in the first quarter, but the chances are for the GDP to surprise on the downside ar the retail sales had a negative growth contribution at the beginning of this year. For further details read my Preview here.
• The US first-quarter GDP is expected to rise 2.3% on an annualized rate.

Friday’s market moving events

• The Bank of Japan stood pat on monetary policy in April while dismissing the explicit CPI target.
• Spanish flash GDP is expected to rise 0.6% rising 3.0% y/y in Q1 2018.
• German unemployment is expected to remain steady at 5.3% in April.
• The Swiss National Bank Governor Thomas Jordan is set to speak about monetary policy and banking regulation at the SNB's general meeting of shareholders at 8:00 GMT.
• The first quarter UK GDP is expected to rise 0.4% Q/Q while increasing 1.4% y/y. For further details read my Preview here.
• The Eurozone business climate indicator is expected to rise to 1.40 in April from 1.34 in March.
• The US Q1 2018 GDP is expected to rise 2.3% annualized rate.
• The US core personal consumption expenditure index is seen decelerating to 1.5% y/y in Q1 2018.
• Michigan consumer confidence is seen rising to 98.0 in April.
• The Bank of England Governor Mark Carney speaks at the launch of the BOE's econoME education program, in London at 16:00 GMT.
• The Bank of England chief economist Andy Haldane is scheduled to speak

Major market movers

• The US 10-year Treasury yields fell back below 3.00% on Thursday, but the US Dollar was well supported against  EUR and CHF.
• Watch GBP in reaction to UK GDP figures. To read more about How to trade UK GDP click here.
• Watch US Dollar factoring in the first quarter GDP data.

Thursday’s macro summary

• German Gfk consumer confidence decelerated to 100.8 in May from 100.9 in April.
• Spanish unemployment rate increased to 16.7% in Q1 2018 falling short of the market expectation.
• The UK CBI trends in sales are seen rising to +5% in April from -8% in March.
• The ECB is set to keep rates on hold with the press conference of President Draghi being a bigger headline for the day. For more details of expectations see my Preview here.
• The US durable goods orders rose 2.6% m/m in March beating the market expectations but the core measure of durables missed remaining unchanged in March.
• The US initial jobless claims fell unexpectedly strongly to 209K in the week ending April 20.
• The US trade balance with goods recorded a better than expected deficit of $68.0 billion in March.
• The US wholesale inventories rose 0.5% m/m in March.