Traders Await Data Barrage, Bernanke

At 2:00 AM Germany July Retail Sales m/m (exp 0.5%, prev 1.3%)
Germany July Retail Sales y/y (exp 0.5%, prev 1.3%)
At 5:00 AM Eurozone July Unemployment Rate (exp 6.9%, prev 6.9%)
Eurozone August HICP flash y/y (exp 1.8%, prev 1.8%)
Eurozone August Business Climate (exp 1.3, prev 1.35)
Eurozone August Consumer Sentiment (exp –2.0, prev –2.0)
At 8:30 AM US July Personal Income (exp 0.3%, prev 0.4%)
US July Consumption (exp 0.3%, prev 0.1%)
US July core PCE m/m (exp 0.2%, prev 0.1%)
Canada June GDP m/m (exp 0.0%, prev 0.3%)
Canada June GDP q/q
At 9:45 AM US August Chicago PMI (exp 52.8, prev 53.4)
At 10:00 AM US University of Michigan July Survey (exp 82.7, prev 90.4)
US July Durable Goods Orders

The major currencies are little changed in the early Friday session as traders prepare for a barrage of economic releases as well as a key speech from Fed Chairman Bernanke on housing and monetary policy. Many market participants are looking for Bernanke to signal an imminent rate cut in the Fed funds rate at the next policy meeting on September 18th in light of recent tightening credit conditions and its potential fallout on the US economy. However, the recent cut in the discount rate may buy the Fed some time and enable it to closely monitor the inflationary outlook before shifting policy.

The bevy of US economic reports includes July personal income, consumption, personal consumption expenditures, durable goods orders, University of Michigan sentiment survey and the August Chicago PMI. Personal income for July is forecasted to slip to 0.3%, down slightly from a month prior at 0.4% while consumption is expected to improve to 0.3% versus 0.1% from June. The closely eyed core PCE reading, the Fed’s preferred gauge on inflation, is seen creeping up to 0.2% in July, up from 0.1% from June. Chicago PMI is seen slipping to 52.8 versus 53.4 from July, while the University of Michigan July sentiment survey is estimated to be down considerably to 82.7 from 90.4. Consumer sentiment will be closely monitored as a proxy to how well US consumption holds up in light of recent market turmoil and volatility stemming from the subprime crisis.