• Preliminary European inflation readings are the top-tier data for today
  • Final Q1 US GDP release should bring a modest impact to the dollar
  • Swedish retail sales with a chance to support the troubled krona

There is quite a lot of stuff packed in today’s macroeconomic calendar nevertheless major attention should be paid to preliminary inflation readings for June from European economies. In the meantime, SEK traders might find something for themselves in a retail sales release from Sweden, which could be an eagerly watched figure given the ongoing krona’s underperformance.

8:30 am BST – Swedish retail sales: The Swedish currency has had a tough period of time, and it seems that everybody wanting see it higher has to be patient. On the other hand, notice that the Riksbank still sticks to its notion that rates might be lifted during the final three months of the year, which could act in favour of the SEK over the next months (keep in mind that this outlook is obviously clouded by a possibility of a inflation slowdown due to bas effects when the year comes to an end). As for today’s reading the consensus indicates 2.8% in a year-over-year for May which would mean a moderate drop from 3.6% in the previous month.

Preliminary inflation for June from Spain (8:00 am BST), Italy (10:00) and Germany (1:00): The ECB did its job at the latest meeting persuading markets to not expect any rate hikes over the next 12 months (at least). In June inflationary trends in key European economies are expected to quicken. Admittedly, it’s unlikely to see the euro soaring in the aftermath, but the debate among more hawkish ECB members might become more colourful in months to come. So, should inflation speeds up as expected, the governing council shall be offered another reason to steer things away from a less accommodative direction. The consensuses are as follows: 2.3%, 1.3% and 2.1% (all YoY, harmonized) for Spain, Italy and Germany respectively. Bear in mind that before we get the final reading for Germany releases from regions will be published.

1:30 pm BST – Q1 US GDP (third): Given this will be the final (third) release one may suspect that an impact on the US dollar or other US assets should be negligible. Anyway, it’s worth looking at GDP deflator in order to asses whether some inflationary up-ticks occurred during the first quarter as well as possible revisions of contributions. At the same time a weekly jobless claims report will come out. After it, a regional Fed index from Kansas will be released (4:00 pm BST) where a small deterioration in June is expected.

Central bankers scheduled to speak today:

  • 11:00 am BST – BoE’s Bailey
  • 2:30 pm BST – BoE’s Haldane (Chief Economist who’s recently cast his vote in favour of a rate hike)
  • 3:45 pm BST – Fed’s Bullard
  • 5:00 pm BST – Fed’s Bostic

link do file download linkThe EURUSD is again backing to its crucial support zone, 1.1450 remains a line in the sand. Source: xStation5