Market Roundup
• US May housing starts hurt by weakness in multi-family units (1.164m v 1.150 forecast, 1.167 previous).
• Canada annual inflation down slightly in May on lower gas (CPI y/y 1.5% v 1.6% forecast, 1.7% previous).
• GBP, oil & risk up as Brexit fears ease, less anxiety over Britain leaving EU after Cox death.
• Fed’s Bullard: down to 1 rate hike, then on hold until end ’18; says Fed communication confusing markets.
• NY Fed Nowcast: US GDP seen growing 2.1% in Q2 v 2.4% Jun 3, 2.1% Q3 v 2.2%.
• Atlanta Fed GDPNow: US economy on track to grow 2.8% in Q2 unchanged from Jun 14.
• Italy's Renzi warns Britain that Brexit would be "forever”, either way Europe has to restart itself or it is finished.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Exports YY May forecast 4%, -10.10%- previous
• 23:50 Japan Imports YY May forecast -13.8%, -23.30%-previous
• 23:50 Japan Trade Balance Total Yen May forecast 40.0b, 823.5b-previous
Looking Ahead - Events, Other Releases (GMT)
• 07:50 Japan BoJ Governor Haruhiko Kuroda speaks at Keio University
Currency Summaries
EUR/USD is likely to find support at 1.1192 levels and currently trading at 1.1282 levels. The pair has made session high at 1.1296 and hit lows at 1.1240 levels. Euro edged higher against US dollar on Friday as demand for European currencies picked up after campaigning was suspended ahead of Britain's June 23 EU membership referendums after a member of parliament was killed. Campaigning was halted and one opinion poll set for publication on Friday was delayed. The probability that Britain votes to remain in the EU increased. Investors fear a British exit from the European Union could curb funding to the region and slow economic growth. On the data front, U.S. housing starts slipped in May as the construction of multi-family housing units dropped. Housing starts fell 0.3 percent to a seasonally adjusted annual pace of 1.16 million units, the Commerce Department said on Friday. Building permits rose 0.7 percent to a 1.14-million unit rate in May.
GBP/USD is supported in the range of 1.4216 currently trading at 1.4357 levels. It reached session high at 1.4388 and hit low at 1.4259 levels. Sterling rose against US dollar on Friday as traders evaluated whether the killing of pro-EU British Member of Parliament Jo Cox may alter the balance of opinion in Britain's referendum on European Union membership. Cox’s death increased speculation that Prime Minister David Cameron might push back the vote scheduled for June 23, or that it could boost the pro-EU "Remain" campaign, which in recent days had fallen behind the "Leave" camp in opinion polls. The pound tumbled earlier this week on concerns Britain would send a shockwave through global financial markets and European politics by voting to leave the 28-country bloc. Amid the focus on Britain's June 23 referendum on EU membership, most European currencies gained across the board, as the U.S. Federal Reserve signalled a cautious approach to raising interest rates and that weighed on the dollar.
USD/CAD is supported at 1.2818 levels and is trading at 1.2876 levels. It has made session high at 1.2915 and lows at 1.2859 levels. The Canadian dollar rose against its U.S. dollar on Friday as a selloff in oil and stocks ahead of Britain's EU membership vote next week, although domestic data showed inflation slowed, the loonie continue its slide. Canada’s annual inflation slowed in May to 1.5 percent from a rate of 1.7 percent in April, with prices for gasoline and food accounting for most of the change, Statistics Canada said. The annual core inflation rate was 2.1 percent, down from 2.2 percent in April. Inflation remained comfortably below the Bank of Canada's 2 percent target and gave policymakers room to remain accommodative. European shares and oil rose after a tumultuous week and as campaigning for Britain's EU membership referendum next week was suspended after the killing of a pro-"Remain" politician.
AUD/USD is supported around 0.7327 levels and currently trading at 0.7388 levels. It hit session high at 0.7409 and made session lows at 0.7373 levels The Australian dollar edged up against its U.S. counterpart on Friday as better-than-expected employment data released on Thursday and the Federal Reserve's more dovish tone provided strength in the Aussie , but was on track for weekly losses as investors fretted about the risk that Britain may vote to leave the European Union in a referendum next week. Campaigning over the U.K.'s referendum on whether or not to leave the European Union was suspended for the second day after the assassination of Labour MP Jo Cox, who advocated remaining in the E.U. The Australian dollar rose to $0.7412, from $0.7364 early, having recovered from a low of $0.7286 touched on Thursday in a volatile session. Meanwhile, a rally in Japanese stocks helped the Antipodean currency regain some lost ground against the safe-haven yen with the Aussie up 0.7 percent to 77.31 yen the day, away from a four-year trough of 75.56. Yet, it was still 2 percent lower for the week.
Equities Recap
European stocks closed higher on Friday as rallying banks and automotive stocks led the continents exchanges into positive territory.
UK's benchmark FTSE 100 closed up 1 percent, the pan-European FTSEurofirst 300 ended the day up by 1.06 percent, Germany's DAX ended up by 0.6 percent, France’s CAC finished the day up by 0.8 percent.
Wall Street dropped on Friday as Apple shares weighed on major indexes and investors girded for Britain's vote next week on its European Union membership.
Dow Jones closed down by 0.32 percent, S&P 500 ended down by 0.32 percent, Nasdaq finished the day down by 0.92 percent.
Treasuries Recap
U.S. benchmark Treasury yields rose on Friday for the first time in nearly two weeks as investors repriced the odds that Britons will vote next week to exit the European Union, and as UK politicians halted campaigning on the referendum following the killing of member of parliament Jo Cox.
The benchmark 10-year Treasury notes fell 16/32 in price to yield 1.618 percent. It was the first increase in 10-year yields since June 6.
Commodities Recap
Oil prices rose on Friday for the first time in a week as the dollar fell and investors in global markets cautiously bought some riskier assets as anxiety eased about Britain's possible exit from the European Union.
Brent crude futures' front-month contract settled up$1.98, or 4.2 percent, at $49.17 a barrel.
The front-month in U.S. crude's West Texas Intermediate (WTI) futures rose $1.77, or 3.8 percent, to settle at $47.98. It fell $1.80 in the previous session.
Gold rose more than 1 percent on Friday, supported by a softer dollar and cautious interest rate comments by a voting U.S. Federal Reserve policy member, and was headed for the third week of gains.
Spot gold was up 1.2 percent at $1,293.80 an ounce at 3:02 p.m. EDT (1902 GMT). Bullion has risen 1.5 percent so far this week.
U.S. gold for August delivery settled down 0.3 percent at $1,294.80 an ounce, well below Thursday's peak of $1,315.55, the highest since August 2014.
