The last trading day of the week started with eventful Asian session where data from Japan dominated.
Tokyo Core CPI showed better than expected reading in July at 0.2% vs 0.1% forecast while national core CPI was unchanged in July at 0.4%.Japan’s unemployment rate unexpectedly dropped to 2.8% in June from 3.1% in May and beat the expectations at 3.0%.
Japan’s retail sales disappointed at 2.1% in Jun, compared to forecasted 2.3% but were still above May release at 2.0%.
Overall solid numbers from Japan offered limited support to Japanese yen which remains in bullish mode against US dollar and probes again above 111.00 barrier for test of key near-term points at 110.77/62, break of which would generate stronger bullish signal for yen’s further advance.
In the European session, focus is German preliminary CPI data and Spanish CPI and GDP numbers. Spanish annualized inflation is expected to stay unchanged at 1.5% in July while GDP is expected to tick higher to 0.9% in Q2 from 0.8% in the first quarter of the year.
Key events during the American session are US and Canada GDP data.
US GDP is forecasted to rise by 2.6% in Q2, well above 1.4% in Q1, signaling that the US economy likely accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment, which would confirm that the sluggish performance early in the year was temporary.
A rebound in growth, together with a tightening labor market, would leave the Federal Reserve on course to announce a plan to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities in September and further support their plans for the third raise of interest rates this year.
Canada’s GDP m/m is expected to stay unchanged at 0.2% in May.
Both releases are due at 12:30 GMT.