Spanish GDP Seen Falling; New Homes Sales Next

Spanish GDP to continue falling; Greek 24 hour strike; UK CBI sales rose; Italian auction. German CPI; US new home sales and oil inventories are next.

The greenback consolidated Asian session gains in the ongoing session. European equities are losing over 1.5% and the relative strength winner is GBP while EUR lags.

Spanish 10 year yield continues to push higher, currently around 6.01%. The rise is attributed to Bank of Spain monthly bulletin that suggest that GDP continued to fall in Q3 at significant pace. Meanwhile in Greece a 24 hour national strike to protest against reforms and budget cuts in under way today. The government is expected to announce these in the days ahead. EURUSD trades heavy near session lows around 1.2865.

UK CBI realized sales rose in September to 6 from previous -3 as retailers reported rise in sales volume along with expectation that growth will strengthen next month. EURGBP is under pressure, trading around 0.7945.

German CPI is still being collected and final result should be announced at 8:00 am ET. Most states that already published results saw annual inflation rate easing to 2% or even below. General consensus is for CPI to slow to 2.0% from 2.1%.

Italy reached a full take up as it sold 6 month BOT totaling EUR 9 bln. The average yield declined to 1.503% from 1.585% but cover fell to 1.39 from 1.69. Italian 10 year yield rose to 5.18%.

The upcoming session will bring new home sales due at 10:00 am ET that are anticipated to rise in August to 380K from previous 372K. Considering how much oil prices have fallen over the past week (WTI currently around 90.70) traders will take clues for the next move from crude oil inventories that are due at 10:30 am. The inventory is expected to shrink to 1.7M barrels from last week's 8.5M barrels. 

Patrik Urban