This week is starting off a lot like last week, with little economic data and the currencies moving with market sentiment. However, a plethora of data releases on Tuesday could start impacting the pairs.
Will labor report move the pound Tuesday?
The Bank of England held rates steady last week in response to weak key economic data, despite rising inflation.
Tuesday’s labor market report will give the BoE and market watchers the next indication of how the economy is doing, and if wage growth is catching up with inflation.
Average earnings excluding bonuses are expected to grow 2.9% for the three months ending in March. Including bonuses, average earnings are expected to grow 2.6%, but down from the previous reading of 2.8%.
The unemployment rate will likely remain at 4.2% with little time to react to the market.
Eurozone data returns
We haven’t had a lot of economic clues as to the health of the Euro-area economy lately, but all that changes Tuesday with German and Eurozone GDP.
We’ll see if the Eurozone GDP can hold up the pound from estimates of falling German GDP. As the area’s largest economy, Germany’s performance can weigh on the euro. German Q1 GDP is expected to fall to 0.4% growth quarter over quarter from 0.6% previously.
Eurozone Q1 GPD is expected to remain steady with growth of 0.4% quarter over quarter and 2.5% year over year.
In between the GDP readings, the German ZEW Survey comes out, giving an indication of investor sentiment. Most estimates are expecting a slight improvement.
The day will round out with Eurozone industrial production numbers, which are expected to rise after better-than-expected Italian, German and Spanish industrial production numbers.
On Wednesday, Eurozone consumer price index data will come out. It’s expected to remain steady across all measurements.
We’ll see if the EUR/USD can crack through 1.20 with the next couple days of data. The pair was rejected around 1.199 earlier Monday before falling to 1.196.
Dollar eyes retail sales, industrial production
The dollar isn’t without economic drivers this week either.
Retail sales for April come out Tuesday. Excluding autos sales are expected to increase 0.5% despite some colder-than-usual weather. Sales including autos month over month will likely fall from the previous month with most vehicle sales numbers showing a decline.
Industrial production on Wednesday could also move the dollar after the slew of Eurozone data scheduled.
On Thursday, weekly initial jobless claims will give a limited snapshot of the U.S. labor market.
Canadian CPI Friday
Our neighbors to the north will wrap up the week with retail sales for the month of March and the consumer price index for April.
Retail sales are expected to slide, showing a 0.1% decrease month over month. And CPI estimates are looking at steady growth of 1.4% year over year.
Underlying global tensions
The trade tensions between the United States and China will continue to play out this week as Chinese delegates visit Washington, D.C. starting on Tuesday.
After U.S. officials visited China last week, little progress was made. This time, there are signs of hope as President Trump recently reversed his administration’s ban of Chinese telecomm company ZTE, calling for them to get back into business in a tweet Sunday.