UK Inflation Report In The Spotlight On Tuesday
Octa | May 22, 2018 02:22AM ET
European and Canadian traders coming back from vacation can expect a quiet release schedule on Tuesday. A pair of releases from the United Kingdom and United States will generate the bulk of the headlines.
The first item on the agenda is a speech by the Bank of England’s Gertjan Vlieghe at 08:15 GMT. Vlieghe is a member of the Monetary Policy Committee (MPC), which recently voted to keep interest rates on hold.
A report on UK public sector net borrowing is scheduled for release at 08:30 GMT. Public sector debt is forecast to swell to £7 billion in April from negative £0.262 billion the month before.
The UK’s Treasury Committee is scheduled to hold the Inflation Report Hearings at 09:00 GMT. The event is of prime interest for traders of the British pound, as it has direct implications on monetary policy.
Rounding out the UK release schedule is a monthly survey of industrial trends courtesy of the Confederation of British Industry (CBI). The CBI report is due at 10:00 GMT.
Shifting gears to North America, the Canadian government will report on wholesale sales at 12:30 GMT. The monthly figure is expected to show 0.6% growth in March following a 0.8% decline the previous month.
In the United States, the Federal Reserve Bank of Richmond will release its monthly manufacturing index at 14:00 GMT. The index is forecast to improve to a reading of plus 9 for May after hitting minus 3 the month before.
Commodity traders will be on high alter for weekly crude inventory data courtesy of the American Petroleum Institute (API). The data is scheduled for release at 20:30 GMT. The official inventory report, courtesy of the US Energy Information Administration (EIA), is due the following morning.
EUR/USD
Europe’s common currency enjoyed strong upside on Monday as the dollar backtracked against its peers. However, gains were capped around the psychological 1.1800 level. EUR/USD is currently trading at 1.1782 with strong support located at 1.1717, the low from 21 May. Immediate resistance is seen up ahead at 1.1800.
GBP/USD
The British pound failed to break out on Monday despite a mild correction for the US dollar. Cable reached a high near 1.3440 before backtracking later in the session. At the time of writing, GBP/USD was valued at 1.3420. The pair is likely to run into resistance around 1.3450. Immediate support is located around 1.3400.
USD/JPY
The US dollar lost momentum on Monday as trade tensions between the United States and China faded. As a result, USD/JPY fell from a high near 111.40 all the way back down below 111.00. At the time of writing, the pair was trading at 110.94. Geopolitics and economic data will sway the pair’s direction throughout the course of the week.
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