U.K. Inflation Data and Job Report Under Spotlight, China’s Industrial Production Awaited

U.S. shares were mixed after the close on Friday amidst weaker-than-expected economic data. At the close in NYSE, the Dow Jones Industrial Average lost 0.11%, the S&P 500 index declined while the NASDAQ Composite index inched 0.09% higher.

Data released on Friday showed core retail sales increased by 0.3% last month. The important indicator used to gauge the strength of the U.S. economy fell short of expectations calling for a rise of 0.5%. Commerce Department data also showed retail sales rose 0.4 percent in April, after an upwardly revised 0.1 percent gain in March. Economists had forecast overall retail sales increasing 0.6 percent last month. On a yearly basis, sales rose 4.5 percent in April.

In a separate report on Friday, consumer prices data published by the Labor Department pointed to a rise of 0.2% after a 0.3% drop in March – the biggest fall in more than two years. Compared to the same month last year, the CPI increased 2.2%.

The U.S. dollar weakened against a basket of six major currencies after the release of Friday’s data and the possibility for a rate hike in June fell to 70%.  However, the U.S. dollar index rose 0.61% for the week, its first gain in five weeks.

In the week ahead, the New York Federal Reserve Bank is to publish the Empire State manufacturing survey for May on Monday. Economists expected the reading to advance to7.0 from 5.2 in April. On Tuesday, the Census Bureau is scheduled to publish the data of building permits which are forecast to rise for a third month in a row to 1.27 million units.

That is followed by data on housing starts and industrial production which are also reported on Tuesday. On Thursday, the Philly Fed’s own manufacturing survey is due to come out. Market analysts expect the index to tick down to 19.8 in May from 22.0 in the preceding month.

Euro closed higher versus the greenback on Friday. The pair EUR/USD was up 0.64% to close at 1.0931 but was lower for the week. The pair snapped a four-week winning streak as investors appeared to take profits from the recent rally in the single currency, after Emmanuel Macron won the French presidential election. Revised first-quarter growth data will be released on Tuesday.

According to the initial estimate published earlier this month, the region’s economy grew 0.5% in the three-month period ended March 31, which was a rise of 0.4% compared to the December quarter. Next week also features euro zone’s final inflation and consumer confidence figures.

Turning to the British Pound, the currency was little changed against the dollar late Friday at around 1.28880. The U.K. Office for National Statistics is due to release data on consumer price inflation for April on Tuesday. Markets expect consumer prices to extend its rally and rise 2.6%, after increasing 2.3% a month earlier.

The figure is followed by Wednesday’s monthly jobs report by the Office for National Statistics. The claimant count change is forecast to rise by 5,000 in April, with the jobless rate holding steady at 4.7%. Wage growth including bonuses is expected to climb 2.4%. Additionally, the ONS will release a report on April retail sales on Thursday with analysts expecting an increase of 1.0%, following a drop of 1.8% in the preceding month.

As for the Japanese Yen, the pair USDJPY fell 0.4 percent on Friday after having reached a roughly two-month high on Thursday of 114.36. In the week ahead, Japan will publish preliminary first-quarter economic growth data on Wednesday. Economists expect Japan’s economy to expand by 0.4% in the first three months of the year. If confirmed, the economy would growth at an annualized rate of 1.7% in the first quarter, which would be the fastest growth rate since the second quarter of 2016.

Besides to the GDP report, Japan is also scheduled to report data on core machinery orders. The headline figure, which is seen as a good indicator of capital spending in the coming six to nine months, is anticipated to rise 2.6% in March.

In China next week, the National Bureau of Statistics is about to release data on April industrial production on Monday. Economists expect factory output to advance 7.1% last month following a rise of 7.6% in March. Also on Monday, data on fixed asset investment and retail sales will also be released.

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