US GDP ON DECK FOR FRIDAY
US gross domestic product (GDP) – the broadest measure of economic health – will headline an active session in global finance on Friday. The report will provide key insight to policymakers, business leaders and investors about the status of the world’s largest economy.
Action begins at 06:00 GMT with a report on German import prices. The import price index is forecast to rise 0.2% for June, which translates into a year-over-year gain of 4.4%.
Forty-five minutes later, the French government will report on national consumer spending for the month of June. Spending at the consumer level likely rose 0.6% last month.
Over the next hour, reports on Spanish retail sales and Italian producer inflation will make their way through the financial markets. At the time of writing, there was no consensus on how either of these data sets will pan out.
The start of North American trade will feature a speech by James Bullard, who serves as President of the Reserve Bank of St. Louis. Bullard is not a member of the Federal Open Market Committee (FOMC but could provide insight on the health of the domestic economy and the path of monetary policy.
Bullard’s speech is set to begin 10 minutes before the Department of Commerce issues its preliminary estimate of first quarter GDP. The world’s largest economy under President Donald Trump is forecast to surge 4.1% year-over-year, more than double the rate of the first quarter.
The report will also contain the quarterly core personal consumption expenditures (PCE) index, which is the Fed’s preferred measure of inflation. The core PCE index likely slipped to 2.2% in the second quarter compared with 2.3% in January-March.
At 14:00 GMT, the University of Michigan will release the final consumer sentiment index for July.
Europe’s common currency swung sharply lower on Thursday as the US dollar regained momentum. EUR/USD fell from a high near 1.1760 all the way back down to the mid-1.16 range. The pair now sits at 1.1644, where it faces immediate support at 1.1575, the low from 19 July. On the opposite side of the spectrum, immediate resistance is located at 1.1800.
Cable’s stint at one-week highs was short-lived, as prices fell more than 100 pips on Thursday all the way back down to the low 1.3100 US region. At the time of writing, GBP/USD was trading at 1.3107. The pair faces immediate support at 1.3070, the current low for the week. On the flipside, immediate resistance is located at 1.3266.
The Australian dollar pivoted sharply lower on Thursday, as prices recoiled from multi-week highs. After peaking at 0.7461, the AUD/USD exchange rate plunged all the way back down to 0.7378, where it now trades. Immediate support is located at 0.7370. Resistance is likely up ahead at 0.7445.