Summary:

• Preliminary PMIs from Eurozone and US

• A pack of Canadian data may spur additional volatility on CAD tied FX pairs

• OPEC to announce its decision today

On the final trading day of the week investors will be offered a preliminary PMI readings from Europe. Once they are released in the morning traders will be served their US counterparts a few hours later. In between CAD traders will get some data from the Canadian economy as figures concerning CPI inflation for May and retail sales for April will be published. Moreover, investors from the oil market should be on guard as the OPEC meeting is on the roll and we may expect the decision to be announced in the afternoon.

9:00 am BST – Eurozone, Preliminary PMIs for June. We can say that the European economy has been expanding for past couple of years as we have not seen a reading below 50 pts since mid-2013 for both services and manufacturing PMIs. Nevertheless, we have seen a deterioration since the beginning of 2018. The ECB signalled that no rate hike will take place until the end of summer next year. However, one of the central bankers said that the Bank will respond appropriately to the data stemming from the EMU. Therefore the significance of the PMI readings may be even greater in the upcoming months. The services gauge is expected to remain unchanged at 53.8 pts while the manufacturing one is expected to slide from 55.5 pts to 55 pts.

1:30 pm BST – Canada, Retail Sales and CPI Inflation. After somewhat disappointing January the Canadian retail sales managed to surprise investors positively in February and March. However, it is worth to note that the core gauge in those months failed to beat expectations and in March we have even seen a shrinking value of the core retail sales in MoM terms. The reading for April is expected to show 0.5% MoM advance for the core measure while the headline measure should show neither advance nor decline (0% MoM). When it comes to the inflation readings things look better. The headline CPI measure sits above the 2% target of central bank and is expected to accelerate from 2.2% YoY in April to 2.5% YoY in May. The core gauge should decline from 1.5% YoY to 1.4% YoY.

2:45 pm BST – US, Preliminary PMIs for June. While the European PMIs are sending warning signs the same cannot be said about their US counterparts. The services gauge sits just a notch below its highest levels since mid-2017 and even a minor pick-up may bring it to the multi-year highs. Index for the manufacturing sector slid a bit last month but it should be noted that it has retreated from its highest levels since the second half of 2014 therefore there is no need to worry just now. The preliminary PMIs for June are expected to show 56.3 pts for the manufacturing gauge (56.4 previously) and 56.4 pts for the services one (56.8 previously).

Euro still struggles to recover against US dollar. For now the support level at 1.1578 holds firm as the latest candlesticks failed to close below. Nevertheless, one should keep in mind that in case such closure occurs a renewed downward pressure may be spurred on the pair. A break below prior lows at 1.1510 may doom euro to failure. Source: xStation5