Summary:

• Canadian GDP due out this afternoon after Weds BOC
• Oil inventories to be released after big up-day for crude
• US PCE could be key for USD and Gold

Wednesday’s session saw stocks and the Euro look to recover from the declines seen at the start of the week on hopes that the Italian political situation may not be as disruptive as some have feared. The EURUSD printed a bullish engulfing candlestick on D1, aided by data points from both Germany and the US. Today’s economic calendar contains more inflation data from the EU this morning before a US metric is out just after lunchtime. Canadian GDP could be a big event for CAD traders following yesterday’s large rally and we also have DOE crude oil inventories before the day is out. 

 10:00 AM BST – Eurozone CPI flash estimate for May. The latest inflation reading from the Eurozone kicks the day off with a notable pick-up expected in the flash estimate for CPI. In Y/Y terms +1.6% is expected after 1.2% prior, with the core reading also forecast to rise, in this case to 1.0% from 0.7% previously. Wednesday saw German CPI Y/Y come in at 2.2% against an expected 1.9%, and given that the country is the largest economy in the Eurozone it is not hard to figure out why today’s release is expected to be higher. 

1:30 PM BST – Canadian GDP (Q1), US core PCE price index (April). One of the largest moves yesterday came in the Canadian dollar, which soared on a hawkish hold from the BOC. This afternoon’s GDP release is unlikely to have as big an impact on the market, but could still cause some decent moves with GDP M/M expected at 0.2% from 0.4% prior. At the same time there’s a bunch of US data out with the most important the core PCE price index M/M (+0.1% exp vs +0.2% prior). This release has been dubbed the Fed’s preferred measure of inflation due to their propensity to reference it when discussing price pressures and any sign of slowdown here could aide a possible USD reversal that we saw possibly begin yesterday. 

4:00 PM BST – DOE crude oil inventories. The weekly update on US stock piles from the Department of Energy can often have a big impact on the Oil market, with today’s release expected to show a -0.4m print after the large rise of 5.8m last time. Last night’s API inventory number showed a build of 1.0M barrels and this figure has often acted as a more accurate gauge of the market expectations compared to the consensus forecast.  

 Oil made a strong push higher and moved back above the EMAs yesterday. 74.75 could be seen as key support and as long as price remains above here then another push to the highs around 80.50 is possible. Source: xStation