GERMAN INFLATION, US CONSUMER SENTIMENT ON THE AGENDA
A steady stream of economic data will flow through the financial markets on Friday, with headline reports from Europe and the United States. In particular, currency traders will be eyeing final inflation numbers from Germany and a closely-watched sentiment indicator from the United States.
The German data set will be released at 06:00 GMT. The final consumer price index (CPI) for March is expected to rise 1.6% year-over-year, based on the consensus forecast. Germany’s harmonised index of consumer prices (HICP), which calculates inflation using a method consistent throughout the EU, likely rose 1.5%.
The Spanish government will also release its final inflation data set for March. Spain’s HICP is forecast to rise 1.3% annually during the month.
At 09:00 GMT, the European Commission’s statistical agency will report on the February trade balance. Brussels is expected to post a trade surplus of €20.2 billion in February, up from €19.9 billion the month before. Trade is a hotly contested topic in geopolitical circles after the Trump administration announced a tariff hit-list targeting commodities and Chinese goods.
Federal Reserve policymaker James Bullard kicks off the North American session with a speech scheduled for 13:00 GMT. Bullard serves as the President of the St. Louis Fed and is not currently a member of the Federal Open Market Committee (FOMC).
Later in the day, FOMC member Robert Kaplan will deliver a speech that could have important implications for monetary policy.
In terms of US economic data, the University of Michigan will release its monthly consumer sentiment index for April. The preliminary reading is likely to show a decline to 100.5 from 101.4 the previous month.
Meanwhile, energy traders will be keeping a close watch for the latest rig-count data courtesy of Baker Hughes Inc. The report is due for release at 17:00 GMT.
Europe’s common currency came under selling pressure on Thursday, with prices falling to a low of 1.2306. EUR/USD would later recover near 1.2330, although the short-term trend suggests further declines are afoot.
Cable returned to positive territory on Thursday, with prices climbing back above 1.4200. GBP/USD was last seen trading at 1.4243, putting it on track for its highest settlement since early February. The pair faces immediate support around 1.4180. On the opposite side of the spectrum, the 1.4300 region could be the next major resistance.
Declining risk aversion has undermined the Japanese yen recently, helping the USD/JPY exchange rate climb to one-and-a-half month highs. At the time of writing, the pair was trading at 107.35, where it was little changed from the previous close. Recent price trends suggest the pair could struggle to extend its rally past the 107.50 area.