US GDP TO RELEASE HEADLINES MID-WEEK
A steady stream of European and US economic data will make its way through the financial markets on Wednesday, culminating in Washington’s revised Q4 GDP report.
The European session kicks off at 06:00 GMT with the GfK institute’s monthly consumer confidence survey for Germany. The April report is expected to deviate very little from the previous month’s tally.
Over the next two hours, traders can expect data on Spanish retail sales, Italian industrial orders and Swiss consumer confidence. At 10:00 GMT, the Confederation of Independent Business (CBI) in the UK will report on the distributed trades survey for the month of March.
Shifting gears to North America, the Commerce Department’s revised US GDP report will be released at 12:30 GMT. The world’s largest economy is forecast to have expanded 2.7% annually in the fourth quarter, according to a median estimate of economists. The core personal consumption expenditure (PCE) index is forecast to rise 1.9% during the quarter.
The core PCE index is the Federal Reserve’s preferred measure of inflation. The central bank targets inflation at 2% and is more likely to raise interest rates when core PCE meets or exceeds that target.
Commerce economists will also report on Washington’s goods trade balance at 12:30 GMT. The February deficit is projected to narrow slightly to $72.5 billion from $74.4 billion the previous month.
A report on wholesale inventories, which is expected to show monthly growth of 0.4% in February, is also scheduled for release at 12:30 GMT.
The National Association of Realtors (NAR) will present its pending home sales index at 14:00 GMT. The forward-looking indicator is forecast to fall 0.2% in February after slumping 1.7% the month before.
Meanwhile, oil traders will be keeping tabs on the weekly crude inventory report courtesy of the US Energy Information Administration (EIA). Official EIA data is expected to show a weekly build up of 1.2 million barrels for the period ended 23 March.
Europe’s common currency rallied to a high of 1.2469 US on Tuesday before giving back around 50 pips to settle in the low 1.2400s. EUR/USD faces short-term support at the psychological 1.2400 level. On the opposite side of the spectrum, the new March high of 1.2475 is the next target.
Like other dollar pairs, cable experienced a breakdown on Tuesday, as prices fell more than 100 pips to break below 1.4100. Cable would recover swiftly in the coming hours but failed to reclaim the Tuesday high near 1.4240. That intraday peak remains the short-term target for the bulls.
The USD/JPY exchange rate has been gradually recovering from Friday’s multiyear low. However, at just 105.50, the pair remains firmly entrenched in negative territory. The pair is currently trading above the key 105.40 level, where it has found momentary support.