US DATA, FED SPEAKERS IN THE HEADLINES ON WEDNESDAY
A combination of economic data and central bank speeches will be in the headlines on Wednesday, giving investors the latest insights into the health of the U.S. recovery and the potential path of monetary policy. Market participants can expect similar insights from the United Kingdom following the release of the Financial Stability Report.
The Bank of England (BOE) will publish its Financial Stability Report at 08:30 GMT. The biannual publication provides an assessment of the financial sector and its ability to withstand external shocks. At the time of its release, BOE Governor Mark Carney is expected to deliver a speech.
BOE officials voted last week to keep monetary policy unchanged, but the breakdown of the verdict suggests that a rate hike could be on the horizon.
In terms of Eurozone data, the Italian government at 10:00 GMT will report on the nation’s trade balance for the month of May.
Shifting gears to North America, the US Department of Commerce will report on durable goods orders at 12:30 GMT. Orders for manufactured goods meant to last three years or more are projected to fall 1% in May following a 1.6% drop the month before. Excluding the volatile transportation category, sales are expected to rise 0.5%.
In a separate release, Commerce will report on the national goods trade balance for the month of May. Washington’s deficit is forecast to have expanded to $68.9 billion from $67.34 billion the month before.
The National Association of Realtors (NAR) will report on pending home sales at 14:00 GMT. The forward-looking indicator of real estate transactions is forecast to rise 0.5% in May.
A pair of central bank officials are scheduled to deliver public commentary on Wednesday. They include Federal Reserve governor Randal Quarles and Eric Rosengren of the Boston Fed Bank.
Europe’s common currency lost momentum on Tuesday, falling roughly 70 pips against the dollar to reach 1.1650 US. EUR/USD is currently hovering right around that level. Immediate resistance is likely found at 1.1700, followed by the Tuesday high of 1.1720. On the flipside, a breakdown of current levels will expose the pair to the 1.1600 region.
Cable experienced a similar breakdown to its euro counterpart Tuesday as the dollar regained momentum against a basket of currencies. GBP/USD fell from a high of 1.3291 all the way back down to 1.3204. The pair remains in a downtrend with immediate support located at Tuesday’s low.
It has been a volatile half day for the USD/JPY. The pair jumped to a high of 110.16 Tuesday before reversing course all the way back down to 109.78 at the start of Asian trading on Wednesday. USD/JPY now sits at the lower end of the range, with immediate resistance likely found at the psychological 110.00 level.