inflation fears continue across Europe.
The dollar was on the front foot following comments from Chair Powell, who stated he believes the Fed can raise rates further without causing a recession in the US. Hawkish remarks from another Fed official, Mester, also provided some support for the greenback, as did the general risk averse tone on markets.
The EU’s chief Brexit negotiator has accused the UK of effectively putting “a gun on the table” by introducing a bill to scrap post-Brexit trade rules between Britain and Northern Ireland. Maros Šefčovič told an event in London the EU would not “negotiate on the basis of this bill”. Foreign Secretary Liz Truss says it will “fix” border problems, but Mr Šefčovič said her plan was illegal, would create uncertainty and would not work.
The euro struggled to regain its footing on Thursday after tumbling overnight against a resurgent U.S. dollar, which benefited from safe-haven demand on renewed worries about higher rates and a global recession.
On the data front, German HICP inflation printed below the consensus of 8.8% in June, falling to 8.2% from 8.7% in May. However, the decline was due to a number of temporary factors, most notably lower rail fares. Elsewhere, the EC sentiment indices came in slightly ahead of forecast in June. However, the releases did not greatly impact the euro yesterday. In level terms, the firmer tone to the dollar is reflected by EUR/ USD opening this morning back near the halfway mark of $1.04- 1.05. GBP/USD is operating in and around the midpoint of the $1.21-1.22 range.
The main release of note will be core-PCE inflation in the US. The forecast is for another slight decline in the y/y rate, to 4.8% in May from 4.9%. US personal income and consumption data for May are also due. In the Eurozone, the unemployment rate is projected to remain at a record low of 6.8% in May.
|06:00||GBP Gross Domestic Product (QoQ)(Q1)||0.8%||0.8%|
|06:00||GBP Gross Domestic Product (YoY)(Q1)||8.7%||8.7%|
|06:00||EUR Retail Sales (MoM)(May)||0.5%||-5.4%|
|06:00||EUR Retail Sales (YoY)(May)||-2%||-0.4%|
|06:30||CHF Retail Sales (YoY)(May)||3.8%||-5.5%|
|09:00||EUR Unemployment Rate (May)||6.8%||6.8%|
|12:30||USD Core Personal Consumption Expenditures – Price Index (MoM)(May)||0.4%||0.3%|
|12:30||USD Core Personal Consumption Expenditures – Price Index (YoY)(May)||4.7%||4.9%|
|12:30||USD Initial Jobless Claims (Jun 24)||228K||229K|
|12:30||USD Initial Jobless Claims 4-week average(Jun 24)||223.5K|
|12:30||USD Personal Income (MoM)(May)||0.5%||0.4%|
|12:30||USD Personal Spending (May)||0.5%||0.9%|
|12:30||CAD Gross Domestic Product (MoM)(Apr)||0.3%||0.7%|