U.S. Data on GDP and Inflation Awaited, ECB’s Forum on Central Banking Draws Attention

U.S. shares were mixed after the close on Friday thanks to a rebound in oil prices and upbeat data on new home sales that eased concerns over a slowdown in the housing market. At the close in NYSE, only the Dow Jones Industrial Average declined 0.01%, the S&P 500 index and the NASDAQ Composite index gained 0.16% and 0.46%, respectively.

According to the Commerce Department, new home sales in the U.S. increased 2.9% on a monthly basis to 610,000 units last month. While the reading beat analysts’ expectation for a rise to 599,000 units in May, April’s sales pace was revised sharply higher to 593,000 units from 569,000 units.

However, the dollar witnessed its largest one day decline in three weeks versus a basket of the other major currencies on Friday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, shed 0.37% at 96.98 late Friday after St. Louis Federal Reserve President James Bullard said that the U.S. central bank should be less aggressive on raising rates while assessing how the economy is progressing.

In the week ahead, investors will be closely watching final data on first-quarter economic growth published by the U.S. Bureau of Economic Analysis on Thursday. The figure is expected to show that the world’s largest economy expanded at a 1.2% annual rate in the first three months of 2017. If confirmed, the final figure will be unchanged from a preliminary estimate.

Before Thursday’s GDP report, market watchers will also be awaiting data on durable goods orders due to be released on Monday, Consumer Confidence on Tuesday and pending home sales on Wednesday. On Friday, the Bureau of Economic Analysis is scheduled to publish figures on personal income and spending, which includes the personal consumption expenditures inflation data. These are Fed’s preferred metric for inflation.

In addition to economic data, remarks by Fed Chair Janet Yellen at the British Academy’s 2017 President’s Lecture in London on Tuesday will also be awaited as markets will be looking for fresh indications on the timing of further rate hikes and signals on Fed’s plans to shrink its massive balance sheet.

Despite of a steep jump on Friday, the Euro failed to close the whole week higher versus the dollar. On Monday, European Central Bank President Mario Draghi and Former Federal Reserve Chair Ben Bernanke are to open the ECB’s annual forum on central banking in Sintra, Portugal.

The two-day “Forum on Central Banking” will focus on investment and growth in advanced economies with the attendance of approximately 150 central bank governors, academics, financial journalists and high-level financial market representatives.

Markets will pay attention to Wednesday’s panel discussion including Draghi, Bank of England Governor Mark Carney, Bank of Japan Governor Haruhiko Kuroda and Bank of Canada Governor Stephen Poloz for any clues on the timing of when the world’s biggest central banks plan to start winding down their monetary stimulus and begin normalizing policy.

Besides the ECB’s forum, the euro zone will publish flash inflation figures for June on Friday which is expected to show consumer prices rose 1.2% in the reported period. This would be a slowdown from a gain of 1.4% in May. Meanwhile, core prices are anticipated to increase 1.0%, 0.1 percent higher than a rise of 0.9% in the prior month.

On Friday, the China Federation of Logistics and Purchasing is to release data on June manufacturing sector activity. Economists expect a modest decline to 51.0 from 51.2 in the preceding month.

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