In the European session, we don’t have much other than a couple of low tier releases that won’t influence market expectations at all. In the American session, we have the US Building Permits and Housing Starts, the US Import prices and the University of Michigan Consumer Sentiment report.
Of those three, I would say that the UMich report is the one that could be market moving. The consensus sees an uptick to 53.4 vs. 52.2 prior. Compared to the Conference Board consumer confidence, which is more biased towards the labour market, the consumer sentiment survey is more weighted towards consumers’ finances.
In fact, analysts believe that it’s a better predictor of consumer spending than the consumer confidence report, which is also why the expectations index in the survey is included in the Leading Economic Index (LEI).
This is generally more market-moving at turning points in the cycles or when we have big deviations from the expected numbers. The sentiment has been falling off a cliff in the past months due to Trump’s trade war. The biggest concern has been the rise in inflation expectations, particularly the long-term ones which reached the highest level since 1991.
Central bank speakers:
- 15:00 GMT/11:00 ET – ECB’s Lane (neutral – voter)
- 22:00 GMT/18:00 ET – Fed’s Barkin (neutral – non voter)
- 01:40 GMT/21:40 ET – Fed’s Daly (neutral – non voter)
This article was written by Giuseppe Dellamotta at www.forexlive.com.
