Summary:

• PCE inflation is a key release for USD today
• Monthly GDP reading from Canada could strengthen CAD which has been on the rise due to upbeat inflation and retail sales figures
• Final Q3 GDP print form the UK is the most interesting market event this morning

The last trading day before Christmas and New Year holiday is going to be unusually interesting. There are a few important readings for the US and Canadian dollar scheduled in today’s calendar. Moreover, the final GDP from the UK is the crucial market event this morning.

9:30 am BST – UK, final Q3 GDP print form the UK. The initial data showed that the UK economy grew at the rate of 1.5% y/y (0.3% q/q), which is one of the worst results among the developed economies. It shows how tough challenges the British economy faces during the Brexit process. However, today’s figures should not significantly impact GBP. 

1:30 pm BST – US, PCE inflation and durable goods orders for November. The US data mix is becoming familiar to investors: strong business confidence, healthy consumer, low unemployment and disappointing inflation that limits scope for Fed’s response. The Fed aims at the PCE inflation so Friday’s data is the last key release from the US this year. Moreover, the durable goods orders are important as far as GDP projections are concerned. The core PCE inflation is expected to pick up to 1.5% y/y from 1.4%, whilst core durable goods orders should slow down growth to 0.5% m/m from 0.9%.

1:30 pm BST – Canada, GDP print for October. Inflation and retail sales data released yesterday strongly surprised to the upside propping up CAD. A solid GDP print could also be an argument for BoC to consider further rate hikes next year. The consensus calls for growth of 0.2% m/m.

3:00 pm BST – US, new home sales and final UoM indicators. These are the second-tier data for USD and Wall Street but given lower trading volumes they might spur a bit larger volatility. The new home sales data is expected to dwindle by 4.7% m/m, whilst UoM consumer sentiment index is to inch up to 97.1 from 96.8.

6:00 pm BST – US, oil rig count. Higher oil prices have encouraged the US shale producers to expand their activity. It has already translated into an increase in the US supply – this factor could be the main factor halting further rally on the oil market. A more detailed analysis on OIL.WTI can be found here.

 The USD index (USDIDX on xStation5) nears an important support area. Will the inflation data help it reverse a descending trend? Source: xStation5