Onto Chicago PMI & CAD GDP

German retail sales disappoint but labor market steady; Eurozone CPI and unemployment rate unchanged; Italian unemployment rate rose. Market turns to core PCE; personal spending, Chicago PMI, consumer confidence and Canadian GDP. Latest trades in our New Look Premium Insights in EURUSD, USDCAD, AUDUSD, with Gold and Silver.

Rumors of weak manufacturing PMI data from China kept the greenback bid at the beginning of London trading. Later in the session risk trades pushed higher across the board some breaking above their yesterday's highs. However, some of these gains were erased after German senior lawmaker said that he could not see ESM banking license becoming a reality.

Europe had a busy calendar today. German retail sales were below expectations as they declined 0.1% in June after falling 0.3% in May. Nevertheless, the annual figure improved to 2.9% from previous -1.1%. German labor market showed no change in July as unemployment remained steady in at 7K and the unemployment rate stayed at 6.8%.

Eurozone CPI was steady in July at 2.4% and the unemployment rate was unchanged at 11.2%. Italian labor market continues to deteriorate as the unemployment rate rose again in June to 10.8% from previous 10.6%. EURUSD currently trades around 1.2285 and a breakout seems unlikely as participants will not want to open fresh positions ahead of tomorrow's FOMC and Thursday's ECB decisions.

The US session starts at 8:30 am ET with core PCE that is anticipated to rise 0.2% in June from 0.1% m/m but remain steady at 1.8% y/y. Personal spending is seen 0.1% higher after a flat reading in May.

Chicago PMI is due at 9:45 am and it is expected to decline in July to 52.6 from 52.9 and finally consumer confidence that is due at 10:00 am is seen lower in July at 61.5 from 62.0.

CAD traders await May GDP that is expected to slow to 0.2% from previous 0.3% m/m but rise to 2.6% from 2.0% y/y. USDCAD traded just a few points above parity during the London session.

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