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USD/CHF Weak bounce.

USD/CHF remains weak as long as prices remain below the key resistance at 0.9614. Hourly resistance can be found at 0.9771 (09/06/2017 high). Strong resistance is given at 1.0107 (10/04/2017 high). Hourly support is given at 0.9561 (intraday low). Expected to show continued bearish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Retesting key support.

USD/CAD is way into bearish mode. Strong support is given at 1.2969 (31/01/2017 low). Resistance is located at 1.3010 (02/15/2017). Expected to show continued downside pressures.

In the longer term, the pair lies in a bullish channel since a year. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low)

AUD/USD Recovery gains strength.

AUD/USD's technical structure is bullish since early May. Recovery bounce near the support at 0.7636 is gaining momentum. The pair is heading towards strong resistance at 0.7750 (21/03/2017 high).

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Bullish conditions remain.

EUR/USD is now consolidating after its recent rally. The pair is trading above former strong resistance given at 1.1300 (09/11/2017 high). Hourly support can be found at 1.1076 (18/05/2017 low). Stronger support lies at 1.0842 (11/05/2017 low). Expected to show continued short-term strength.

In the longer term, the momentum is clearly negative. We favour a continued bearish bias towards parity. Key resistance holds at 1.1714 (24/08/2015 high) while strong support lies at 1.0341 (03/01/2017 low).

GBP/USD Bullish.

GBP/USD's momentum is higher than expected and the pair is now targeting key resistance give at 1.3046 (18/05/2017 high). Hourly support is given at 1.2589 (21/06/2017 low). Hourly resistance at 1.2818 (14/06/2017 high) has been broken. Expected to show further continued buying pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Minor correction.

USD/JPY has pullback after strong bullish rally while remaining within an uptrend channel. Hourly support can be found at 110.65 (16/06/2017 low). Stronger support is located at 108.13 (17/04/2017 low). Expected to show continued pressures.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

WTI oil regained strength and is pressuring fresh two-week high at $45.43, after shallow pullback from $45.43 was contained by rising 4-hr Tenkan-sen at $44.64.

Recovery leg from $42.04 (21 June low) was boosted by data showing a decline in US oil output and along with improving technical studies and weaker dollar, keep oil price supported.

Oil is looking for strong bullish signal on close above cracked $44.91 pivot (Fibo 61.8% of $46.69/$42.04 downleg / 20SMA) which would signal bullish acceleration towards key near-term support at $46.69 (12 June lower top).

Crude oil is on track for strong bullish weekly close, the first bullish close since mid-May that also underpins bulls.

Supports at $44.91/64 are expected to hold dips and keep immediate bulls intact. Break here would risk deeper pullback and expose support at $43.73 (daily Tenkan-sen).

Res: 45.43, 45.59, 46.46, 46.69
Sup: 44.91, 44.64, 44.42, 43.73

China data improves on domestic and external factors

Unexpectedly, China's NBS PMI surprised higher providing evidence that the China growth story remains undervalued and there is still solid external demand. China's June NBA manufacturing PMI increased to 51.7 above 51.0. The good data was driven by new orders and higher production readings. Production index increased to 54.4 from 53.4 in May while new orders rose to 53.1 from 52.3 in May.

Clearly, rumours of a domestic collapse is far from reality, as China's domestic activity remains resilient regardless of distant signals of decelerations. There has been some slowing due to softer investment activity indicating that the government's drive to shutdown areas of “shadow” banking has been effective. Chinese authorities, in our mind, are doing a decent job balancing the need to deleveraging and support the economy. Micro-tuning in credit availability will likely slow interest rate sensitive areas such as real estate and infrastructure financing but it is unlikely to derail growth broadly. We still anticipate 6.8% GDP growth for 2017.

The other bright spot of the data release was the exports orders index, which continued to improve to 52.0 - a five-year high. Solid export growth alongside general risk appetite should support investors' demand for regional EM FX currencies. From a relative value standpoint traders should be favouring Europe and Asia EM over the US. European growth has surprised to the upside, China's economy slowing is less than expected with plenty of bright spots while the US data has underperformed and political uncertainty makes outlook significantly challenging.

The euro stabilises amid sharp gains

Despite an upward shift in the German yield curve and better-than-expected inflation data (HICP printed at 1.5 y/y in June versus 1.3% median forecast) the single currency struggled to extend gains as it tumbled on the $1.1447 resistance (high from May 11th 2016).

On the short-end of the curve, German 2-year yields stabilised at -0.55% after rising more than 40bps since February. On the long-hand, 10-year yields kept on climbing higher - 0.46% compared to 0.18% in February - amid rising inflation expectation.

Indeed, the sharp pick-up in the 5y5y inflation swap forward rate (up 9bps to 1.61% in less than a week) shows that market participants have revised upwardly their inflation expectations, which naturally translated into higher nominal rates, helping the EUR to gain momentum.

In the US, the upside surprise in 1Q GDP failed to reverse the sell-off that has sent the USD to a multi-month low but it did at least help to stop the bleeding. The final revision of the first quarter GDP printed at 1.4% q/q (annualised), while personal consumption got some colour back and rose 1.1q/q (saar: seasonally adjusted annual rate). The dollar index fell to its lowest level since early November last year and hit 95.47, erasing completely the gains that followed the election of Donald Trump.

Given the quick and sharp debasement of the greenback, we think investors are eager to take those profits home and take time to reassess the situation, especially after the muddled comments from Carney and Draghi on Wednesday.

A return of EUR/USD to the 1.12 level (38.2% Fibonacci on April-June rally) cannot be ruled out; however the pair should take a pause at around 1.13 before any potential downside move. Given the recent brightening of the EU economic picture, we maintain our long EUR bias against the USD.

Swiss data improves, sell CHF

Switzerland's KOF Leading Indicator reversed the prior month’s weak read surging to 105.5 (from 102.0 in May). The jump nearly covered last month’s decline and highlighted that the upwards trend indicates near term outlook remains solid. This recovery should help alleviate some concern that the Swiss economy was decelerating quicker due to the stronger CHF. The strongest drive was manufacturing, which offset some of the negative pull of construction. As discussed in the piece on China, stronger external demand helped improve the Swiss outlook around incoming orders.

We suspect that the improvement in sentiment around business climate and competitiveness can be traced to the slightly weaker CHF against the Euro. Improvement in growth and low political uncertainty has sent capital back into Europe allowing the SNB to decelerate FX intervention preventing CHF appreciation.

We remain bearish on the CHF as the SNB monetary policy is not likely to shift any time soon while ECB, Fed and members of the BoE have increasingly signaled moves toward “normalisation” and tighter policy. We view the GBPCHF as the best way to manifest this policy divergent view.

Yesterday, the UK House of Commons voted in favor of the Queen's Speech by a majority of 14 MPs. This implies that Theresa May will remain as the UK Prime Minister and that she will be the one managing the Brexit negotiations. However, we must note that May will now be in charge of a minority government with a slim majority in Parliament, which implies that her position is fragile and that she could be politically paralyzed at any time by just a few rebellious Conservative MPs, or a potential mutiny by the DUP. The reaction in sterling on the vote was relatively muted, possibly because this outcome was widely anticipated by markets.

With UK domestic political uncertainty now dissipating somewhat, the focus is likely to turn to headlines surrounding the Brexit negotiations, as well as monetary policy developments. In our view, the short-term outlook for GBP is cautiously positive, mainly due to all of the attention a potential rate hike by the BoE has attracted recently. Further signs in the next weeks that a policy move may be on the cards this year could work in favor of the pound. What might add fuel to such speculation? From a data perspective, solid PMIs for June that are due out next week and/or a potential pickup in wage growth prints that we will get the week after. In addition, any hawkish comments from the two BoE MPC members that have not expressed their views recently (Broadbent and Vlieghe) could suggest that the hawks currently outnumber the doves within the MPC.

EUR/GBP traded in a consolidative manner on Thursday, staying supported by the 0.8775 (S1) barrier. On Wednesday, the pair failed to overcome the 0.8870 (R2) obstacle and following Carney's hawkish remarks, it fell below the short-term uptrend line taken from the low of the 10th of May. Therefore, we switch our view to flat for now. The pair shows signs that it may be establishing a sideways range between the 0.8870 (R2) resistance and the 0.8715 (S2). If the pair falls below its current support of 0.8775 (S1), then we may experience extensions towards the lower bound of the range, at 0.8715 (S2).

Nevertheless, a break below 0.8715 (S2) is needed to confirm a forthcoming lower low on the 4-hour chart and signal a short-term trend reversal.

The economic calendar is packed today:

From Eurozone, we get preliminary CPI data for June. The forecast is for the headline rate to have ticked down, but for the core rate to have held steady. We see the case for an upside surprise in the headline rate, considering that Germany's rate actually rose, against expectations of declining. Even though such a positive surprise could support EUR a bit, given that the ECB has repeatedly indicated it is “looking through” changes in the headline print, we think markets will focus primarily on any surprise in the core print.

In the UK, the final GDP for Q1 is due out, and expectations are for the final print to confirm the 2nd estimate. In its latest meeting minutes though, the BoE anticipated the final print to be revised up. If this is indeed the case, it may enhance somewhat the case for a BoE rate hike by the end of the year and thereby, support sterling.

From the US, we get personal income and spending data for May. Expectations are for both the income and spending rates to have slid somewhat. We also get the core PCE index for May, but no forecast is available. We see the risks surrounding the core PCE rate as tilted to the downside, given the unexpected decline in the core CPI rate for the month. Considering that all of these indicators will be released at the same time and are expected to be on the soft side, USD could come under renewed selling interest.

USD/JPY tumbled yesterday after it hit resistance at 112.90 (R2), slightly below the downside resistance line taken from the peak of the 11th of January. In our view, yesterday's slide shows that the latest recovery may be running out of steam and given our proximity to the aforementioned downside line, further declines may be on the cards. A clear dip below 111.80 (S1) is likely to challenge the 111.50 (S2) level, where a decisive break is possible to set the stage for more downside extensions, perhaps towards the 111.00 (S3) territory.

In Canada, GDP data for April are due out and the forecast is for a slowdown. However, given that retail sales for the same month surprisingly skyrocketed, we see the risks surrounding that forecast as skewed to the upside. Combined with potentially soft US data, a better-than-anticipated GDP print may encourage USD/CAD bears to drive the battle further below the psychological area of 1.3000.

We have only one speaker on the agenda: ECB Executive Board member Sabine Lautenschlager.

EUR/GBP

Support: 0.8775 (S1), 0.8715 (S2), 0.8640 (S3)

Resistance: 0.8820 (R1), 0.8870 (R2), 0.8945 (R3)

USD/JPY

Support: 111.80 (S1), 111.50 (S2), 111.00 (S3)

Resistance: 112.45 (R1), 112.90 (R2), 113.25 (R3)

Chinese official manufacturing PMI numbers for the month of June positively surprised today, in a sign that the world's second largest economy remains resilient against threats on growth, such as high debt levels in the economy.

Delving into the numbers, the June manufacturing PMI came in at 51.7, beating expectations for a reading of 51.0 and exceeding May's 51.2. The official PMI figure for the services sector was released at 54.9, comfortably above the 50 threshold that separates expansion from contraction in the sector, as well as above May's 54.5.

Manufacturing PMI data are typically the ones attracting most attention, though with the rebalancing in the Chinese economy in recent years and household spending making up a greater portion of the economic pie, services PMI numbers are also becoming important for investors.

Looking at the details underpinning the figures, those suggest that the manufacturing sector was supported by demand from abroad as export orders strongly increased, while there are signs for a pickup in household demand as well. On the negative side, traditional sectors, such as crude oil and chemicals, did not manage to reverse the downtrend they've entered.

Turning to the forex market's reaction, dollar/yuan declined on the data, eventually falling to 6.758 which constitutes a three-week low for the pair. It traded at 6.791 before the data became public. The pair later recovered a significant part of its losses but was still last down on the day, looking set to record its fourth straight day of declines.

To conclude, it should be noted that the June Caixin manufacturing PMI will be released on Monday. This report covers private companies, as opposed to the official figures which largely focus on big and often state-owned enterprises. The release of the Caixin report will give a clearer picture of the state of the manufacturing sector. The Chinese economy grew by 6.9% on an annual basis during the first quarter of the year. The government's target for the year is at 6.5%

Employment reports out of the United States and Canada will be scrutinized as the Fed eyes a third rate hike and the Bank of Canada moves closer to a tightening cycle. Central bank meetings will include the Reserve Bank of Australia and the Riksbank, while PMI data out of the United Kingdom, the Eurozone, China, Canada, and the United States will also be watched.

RBA set to maintain neutral stance

The Reserve Bank of Australia is expected to hold rates unchanged at 1.5% for the 10th meeting in a row on Tuesday as the central bank attempts to balance low inflation and wage growth with rising household debt. Although the Australian labour market has shown some signs of strength recently, consumer spending has been softer this year. Retail sales data, also due on Tuesday, should indicate if the bounce back in sales seen in April will be sustained. Trade figures released on Thursday should also capture some attention, especially as the Australian dollar tests the key $0.77 level once again.

Canadian jobs in focus as Bank of Canada ponders a July rate hike

The Canadian dollar has enjoyed a strong rally in the past couple of months and strong jobs data out on Friday could fuel the loonie’s gains as it would give the Bank of Canada more reason to consider a rate hike at its July 12 meeting. Recent hawkish remarks from the Bank’s Governor and his deputy have caught markets by surprise as it wasn’t that long ago that the BoC was considering cutting rates. Also to watch out of Canada next week are trade figures on Thursday and the Ivey PMI on Friday.

Quieter week for the Eurozone

It will be a relatively quieter week for the Eurozone with only a handful of key data releases on next week’s calendar. The final readings of IHS Markit’s PMIs for June are not expected to see any revision. The manufacturing PMI is due on Monday and the services and composite PMIs on Wednesday. Monday will also see the release of the euro area’s unemployment rate and retail sales will follow on Wednesday. June’s flash readings had pointed to a slight easing in economic growth in the Eurozone at the end of the second quarter, and the euro’s sharp rally in recent days may threaten to put a damper on the current momentum. German data will also be in focus next week as both industrial orders and industrial output figures are out on Thursday and Friday respectively.

Tankan survey to show growing optimism among Japanese businesses

The Bank of Japan’s quarterly Tankan survey will be the main data release out of Japan next week. The Tankan’s key indices are all expected to improve in the second quarter, with both manufacturing and non-manufacturing companies reporting an increase in business sentiment. More importantly, large and small businesses alike are forecast to up their expectations of capital spending for the fiscal year ending March 2018. A solid Tankan report should help the yen as it would underline Japan’s strengthening economic outlook, though with the Bank of Japan still not satisfied with the performance of prices, any impact would be limited.

UK data in spotlight after Carney U-turn

Recent economic indicators out of the UK have been disappointing. Apart from the labour market, inflation has been the only other bright spot, which has now overshot the Bank of England’s 2% target. However, the UK economy remains fairly resilient under the climate of the Brexit uncertainty and the Bank of England has signalled it may consider a rate hike within the coming months. Even the Bank’s Governor, Mark Carney, who until last week had resisted calls for a rate rise, appears to be aligning himself closer to the hawks in the MPC, driving the pound back above $1.30. Incoming data in the next few months will therefore be analysed carefully for more clues on the strength of the economy. The Markit/CIPS manufacturing PMI will start the week on Monday. It’s expected to ease slightly to 56.4 in June. The construction and services PMIs, due on Tuesday and Wednesday, respectively, are also forecast to drop slightly. More data will follow on Friday with industrial and manufacturing production figures. Both industrial and manufacturing output are forecast to rise by 0.3% month-on-month in May.

ISM PMIs and NFP to be week’s highlight

The US will have a busier week despite the 4th of July Independence Day holiday on Tuesday. As the markets continue to question the Fed’s rate hike path that currently projects one more increase later this year, major data releases next week could shed more light on the state of the US economy. The closely watched ISM manufacturing PMI due on Monday will be the first big number of the week. The index is forecast to edge up slightly to 55.0 in June. Also out on Monday, is IHS Markit’s manufacturing PMI. The next batch of data will come on Thursday, which will include the ADP Employment reports, the goods trade balance, the Markit services PMI and the ISM non-manufacturing PMI. The ISM’s non-manufacturing PMI is expected to moderate from 56.9 to 56.6.

After a disappointing set of figures in May, June’s headline non-farm payrolls number is not expected to overwhelm either. The US economy is forecast to add 183k jobs in June, compared with 138k previously. The unemployment rate is expected to remain at 4.3% and average hourly earnings growth is forecast to quicken slightly to 0.3% m/m in June. Another poor report could spell more trouble for the US dollar, which has not only come under pressure from fading hopes of a fiscal stimulus anytime soon, but also from rising expectations of higher interest rates in other parts of the world.

Other notable events next week will include PMI figures from China and a monetary policy meeting by Sweden’s central bank. China’s Caixin manufacturing and services PMIs are due on Monday and Wednesday, respectively, and are expected to yet again show a divergence from the official PMIs in June. Meanwhile, Sweden’s Riksbank will meet on Tuesday and will likely sound less dovish given recent stronger-than-expected inflation data and an easing of upside pressure on the krona.

The DAX index has ticked upwards in the Friday session, gaining 0.22%. Currently, the DAX is at 12,443.50. On the release front, German indicators were mixed. Retail Sales rebounded in May, with a gain of 0.5%. However, Unemployment Change gained 7 thousand, missing the estimate of -10 thousand. On the inflation front, Eurozone CPI Flash Estimate edged lower to 1.3%, above the forecast of 1.2%.

German consumer data beat expectations this week, as the German economy continues to shine. Preliminary CPI posted a gain of 0.2% in June, beating the estimate of 0.0%. This reading was an improvement from May, which showed a decline of 0.2%. On Friday, Retail Sales followed suit, as the gain of 0.5% was the strongest gain rebounded from a reading of 0.2% in May. However, Unemployment Change was unexpectedly soft, breaking a streak of 8 straight declines. The unemployment rate remained unchanged at 5.7%.

ECB President Mario Draghi may have got more than he bargained for as the highlight speaker at the ECB forum for central bankers in Sintra, Portugal. The meeting turned into the market-mover of the week (if not of the month), as the euro jumped 1.9%, while the pound soared 2.1%. The currencies posted the sharp gains after hawkish comments from Draghi and BoE Governor Mark Carney. Draghi was upbeat about the eurozone economy and put a positive spin on inflation, stating that 'deflationary forces have been replaced by reflationary ones'. Draghi said that the ECB's stimulus program was needed for now, but would be gradually withdrawn once inflation moved higher. The markets read Draghi's comments as a declaration that the ECB was planning to tighten policy. After the euro jumped, the ECB tried to dampen the stampede to snap up euros, with ECB sources saying that the markets had 'misjudged' Draghi's remarks. This impeded the euro's rally, but only briefly. There was a similar reaction from the pound, which jumped above the 1.30 level for the first time since May after Carney left the door open for a rate hike. Carney appeared to backtrack from remarks last week, when he warned against rate increases in the near future. This week's rallies by the euro and the pound could mark trading opportunities, as Stephen Innes, senior trader at OANDA, summed up:

'A game changer of a week as hawkish central bank commentary steamrolled the markets'… traders are now contemplating who will be next to join the lineup. No one wants to miss out on this party realising there's a co-ordinated policy shift afoot and the chance to catch the removal of an easing bias is far too seductive for traders to ignore.'

There was no getting around the fact that the US economy slowed down in the first quarter, but there was some good news, as the revised GDP reading was raised to 1.4%, better than the initial estimate of 1.2% in May. The improvement was attributed to stronger consumer spending and an increase in exports. Earlier in the year, the markets were braced for a very poor quarter, with the first estimate in April projecting a gain of only 0.7%. Will we see better numbers in the second quarter? That may be a tall order, as consumer spending and manufacturing numbers in Q2 have missed expectations. Housing numbers have been mixed, and inflation remains below the Fed's target of 2 percent. At the same time, the US labor markets remains very tight, with the unemployment rate at a 16-year low of 4.3%. Stronger global economic conditions have increased the demand for US products, boosting the export sector.

The euro has posted slight losses in the Friday session. Currently, the pair is trading at the 1.14 level. On the release front, it’s a busy day, so traders should be prepared for some movement from EUR/USD. German economic indicators were mixed. Retail Sales rebounded in May, with a gain of 0.5%. However, Unemployment Change climbed 7 thousand, missing the estimate of -10 thousand. On the inflation front, Eurozone CPI Flash Estimate edged lower to 1.3%, above the forecast of 1.2%. In the US, the focus will be on consumer data, with the release of Personal Spending and UoM Consumer Sentiment.

The quiet town of Sintra, Portugal was in the spotlight this week, as comments from central bankers at the ECB forum shook up the currency markets. The euro and British pound both enjoyed sharp gains against the dollar, courtesy of ECB President Mario Draghi and BoE Governor Mark Carney. Draghi presented an optimistic view of the eurozone economy, and put a positive spin on inflation, stating that 'deflationary forces have been replaced by reflationary ones'. Draghi said that the ECB’s stimulus program was needed for now, but would be gradually withdrawn once inflation moved higher. The markets read Draghi’s comments as a declaration that the ECB was planning to tighten policy. After the euro jumped, the ECB beat a hasty retreat, with ECB sources saying that the markets had 'misinterpreted' Draghi’s remarks. This impeded the euro’s rally, but only briefly. There was a similar reaction from the pound, which jumped above the 1.30 level for the first time since May after Carney left the door open for a rate hike. Carney appeared to backtrack from remarks last week, when he warned against rate increases in the near future. This week’s rallies by the euro and the pound were extraordinary, as Stephen Innes, senior trader at OANDA, summed up:

'A game changer of a week as hawkish central bank commentary steamrolled the markets'… traders are now contemplating who will be next to join the lineup. No one wants to miss out on this party realising there’s a co-ordinated policy shift afoot and the chance to catch the removal of an easing bias is far too seductive for traders to ignore.'

There was no getting around the fact that the US economy slowed down in the first quarter, but there was some good news, as the revised GDP reading was raised to 1.4%, better than the initial estimate of 1.2% in May. The improvement was attributed to stronger consumer spending and an increase in exports. Earlier in the year, the markets were braced for a very poor quarter, with the first estimate in April projecting a gain of only 0.7%. Will we see better numbers in the second quarter? That may be a tall order, as consumer spending and manufacturing numbers in Q2 have missed expectations. Housing numbers have been mixed, and inflation remains below the Fed’s target of 2 percent. At the same time, the US labor markets remains very tight, with the unemployment rate at a 16-year low of 4.3%. Stronger global economic conditions have increased the demand for US products, boosting the export sector.

Aside from lukewarm economic data in 2017, investor confidence has been dampened by a Trump administration which has been plagued by scandals and crises. The administration continues to spend much of its time and energy on damage control, rather than focusing on its agenda of tax reform and increased fiscal spending. Will political paralysis in Washington affect interest rate policy? The Federal Reserve has all but promised one more rate hike in 2017, but the markets aren’t so sure, with the odds of a December rate hike at 57%, according to the CME Group.

• Investors prepare for less accommodative global monetary policy;
• Profit taking seen in bonds, stocks and currencies;
• Oil on course for seventh consecutive daily gain but downside pressure remains;
• US inflation, income, spending and consumer data still to come.

As the week, month and quarter draws to a close, we appear to be seeing some profit taking after what has been a very interesting week for markets.

This week has seen a number of central bankers adopt a more hawkish view on their respective monetary outlooks which has pushed up yields and seen the pound, euro and Canadian dollar quite heavily bid. The comments also appear to have weighed on equities in recent days as investors prepare for the end of ultra-accommodative monetary policy from some of the world's largest central banks.

While the process is likely to be very gradual which means monetary policy will remain very accommodative for some time yet, the change in tone from the likes of the Bank of England hasn't gone unnoticed, with investors previously not pricing in a rate hike in the UK until 2019.

Today though we're seeing some profit taking on the week's moves, with the pound stumbling once again just above 1.30 against the dollar and the euro just above 1.14, also against the greenback. Both of these levels are also notable technical levels, having provided resistance in the past so it's perhaps not surprising that we're seeing the same again. Despite this, I wouldn't be surprised if these levels are broken over the next couple of weeks, assuming the same policy makers don't backtrack on what has been said this week, something someone at the ECB has already tried to do this week in the case of Mario Draghi.

One area where we're not seeing this is in oil, which has recovered off its seven month lows – reached last week – to record six consecutive daily gains and is now on course for a seventh. Whether this can be maintained is yet to be seen with investors clearly expressing significant doubts about the effectiveness of the production cut that was extended only last month until the first quarter of next year. As it is, this still looks like a corrective move and I wouldn't be surprised to see more downside pressure next week.

We may not have the abundance of central bank appearances today that we've had throughout the rest of the week but there is still a lot of economic data to come today from the US. UK first quarter GDP data this morning was unrevised at 2%, as expected, while CPI and core CPI inflation data in the eurozone topped expectations but remained well below the ECBs target of below, but close to, 2%. Still to come today we have inflation data for the US – core PCE price index, the Fed's preferred measure – personal income and spending figures, UoM consumer sentiment survey and the Baker Hughes oil rig release.