NORTH AMERICA TAKES THE FORE IN FRIDAY SESSION
The global financial markets can expect a steady stream of market-moving data on Friday, culminating in several batches of high-profile North American figures.
Action begins in Europe at 06:00 GMT with the release of German producer inflation data. The German producer price index (PPI) is forecast to rise 2.9% annually in September, following a 2.6% increase the previous month.
Attention shifts to policy a half hour later as Bank of Japan (BOJ) Governor Haruhiko Kuroda delivers a speech. Currency traders will be on high alert for any mention of quantitative easing.
Returning to the data, the UK National Statistics office will report on public sector net borrowing at 08;30 GMT.
The Canadian government headlines the North American calendar with multiple releases Friday, including retail sales and consumer inflation. Retail spending is forecast to rise 0.5% in August, after climbing 0.4% the previous month.
Statistics Canada is also expected to show a 1.6% annual increase in the consumer price index (CPI) at 12:30 GMT.
South of the border, the National Association of Realtors (NAR) will report on existing home sales for the month of September. The sale of previously-owned homes is forecast to dip 1% to a seasonally adjusted annual rate of 5.3 million units.
Energy traders will also keep an eye on weekly rig-count data at 17:00 GMT.
In terms of monetary policy, Federal Open Market Committee (FOMC) member Loretta Mester will deliver a speech at 18:00 GMT.
The USD/CAD will be data-driven on Friday, as investors try to piece together Canada’s inflation outlook relative to the central bank’s rate-hiking schedule. The USD/CAD exchange rate is up 0.2% overnight to trade at 1.2511. The gains reflect a broader rally for the greenback this week. A solid inflation report from Statistics Canada could trigger a broad reversal for the pair. In fact, anything that supports the case for a trigger-happy BOC will send the Canadian dollar higher.
The euro advanced against the dollar on Thursday, but has since softened to resume trading in the low 1.1800 region. The EUR/USD remains firmly capped below the 1.19 handle for nearly a month. That means the upper 1.1800s continue to offer strong resistance. On the opposite side of the ledger, immediate support is located in the upper half of the 1.1700 area.
The USD/JPY caught a tailwind Friday, gaining 0.5% to trade at 113.17. The pair touched a session high of 113.31, which would have marked the highest settlement in two weeks. All eyes are on the BOJ’s Kuroda, as his comments could signal the direction of the market in the coming hours. Analysts at Danske Bank see the USD/JPY returning to 115.00 and beyond over the next six months.