Economic calendar: Interesting end of the week

Summary:

• UK retail sales expected to remain unchanged in December

• UoM data forecasted to show a drop in the consumer sentiment

• Two Fed members scheduled to speak today

Somewhat upbeat rumours concerning trade conflict between China and the United States helped global equities add to current rally. Increased volatility may be observed on the FX market today as well as few noteworthy readings are scheduled for release. Traders should watch GBP, CAD and USD carefully today.

9:30 am GMT - Retail sales report for December from the United Kingdom. Brexit continues to be the main theme weighing in on the British pound. Prime Minister Theresa May has time until Monday to outline what will be her next actions. Meanwhile, the retail sales report for December will be released. The headline gauge is expected to remain unchanged at 3.6% YoY while the core measure should rise modestly from 3.8% YoY in November to 3.9% YoY in December.

1:30 pm GMT - CPI report for December from Canada. As Fed is likely to pause the interest rate hike cycle, money market odds concerning rate hikes in Canada plunged. Right now, markets do not price a single borrowing costs increase during the next year. Price growth eased a bit as of lately but in case we see inflation accelerating BoC members may turn more hawkish. CPI inflation in December is seen at 1.7% YoY, unchanged against the previous month.

3:00 pm GMT - University of Michigan consumer sentiment data for January. The latest data stream from the United States paints a mixed picture of the economy. However, one should remember that the ongoing partial government shutdown delays publication of some of the hard data. Having said that, investors trying to assess the condition of the economy have to rely more on the survey-based data. Michigan consumer sentiment is such reading. Market consensus suggests that we are about to see a drop from 98.3 pts to 97 pts.

Central bank speakers scheduled for today:

• 2:05 pm GMT - Fed’s Williams

• 4:00 pm GMT - Fed’s Harker

Major US companies reporting earnings today:

• Schlumberger (SLB.US)

• VF Corp (VFC.US)

• State Street Corp (STT.US)

Despite tremendous defeat Prime Minister May has suffered in the House of Commons the British pound keeps moving higher. GBPUSD reached 200-session moving average yesterday and is pulling back today. A strong retail sales reading could help pound break above this technical hurdle. Source: xStation5