Market Roundup
• Q2 U.S. GDP data better than expected
• Nasdaq, S&P 500 hit intra-day record highs
• Oil prices gain 0.3%
• Bond prices mixed across a flatter yield curve
• US Core PCE Prices -1.8%, 2.00% forecast, -1.10% previous
• US GDP (QoQ) Q2 2.1%,1.8% forecast,3.1% previous
• US GDP Price Index (QoQ) (Q2) 2.5%,1.9% forecast,0.8% previous
• US PCE Prices 2.3%,0.4% previous
• Canada May Budget Balance (YoY) -1.41B , -11.81B previous
• Canada May Budget Balance-2.10B, -14.90B previous
• Brazil Jun Bank lending (MoM) 0.4%, 5.9% previous
Looking Ahead - Economic Data (GMT)
No economic data
Looking Ahead - Events, Other Releases (GMT)
• No major economic events are scheduled
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Friday, as better-than-expected U.S. growth data did not alter the view the Federal Reserve would soon lower rates for the first time in a decade. The dollar’s rise was also helped by widening yield differentials between U.S. and German debt. Spreads were holding at two-month highs at 250.5 basis points. Investors were disappointed by a lack of policy action from the European Central Bank at a meeting on Thursday. Their attention will now shift to a Federal Reserve meeting next week, where policymakers are expected to cut interest rates by 25 basis points to 2.00%-2.25%.The euro was down 0.19 percent at $1.1125. Immediate resistance can be seen at 1.1153 (5 DMA), an upside break can trigger rise towards 1.1200 (11 DMA).On the downside, immediate support is seen at 1.1112 (Daily low), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: The British pound weakened against dollar on Friday, weighed down by European Commission President Jean-Claude Juncker’s telling Britain’s new prime minister, Boris Johnson, that a deal agreed by his predecessor was the best and the only Brexit agreement.Juncker told Johnson on Thursday that the European Union would analyse any ideas put forward by Britain, provided they were compatible with the withdrawal agreement. Johnson has repeated his pledge this week to renegotiate the withdrawal agreement and promised to take Britain out of the EU on Oct. 31 with or without a deal. He has also said the so-called Northern Irish backstop must be abolished to avoid a no-deal Brexit. Sterling fell 0.5% to $1.2386, a fair way below its weekly high of $1.2522.Immediate resistance can be seen at 1.2474 (11 DMA), an upside break can trigger rise towards 1.2517 (21 DMA).On the downside, immediate support is seen at 1.2344 (Lower Bollinger Band), a break below could take the pair towards 1.2348 (Psychological level).
USD/CAD: The Canadian dollar weakened to a one-month low against its U.S. counterpart on Friday after data showing stronger-than-expected growth in the U.S. economy that was supportive of the greenback. The U.S. dollar strengthened against a basket of major currencies after the data, which could support the view that an expected interest rate cut by the Federal Reserve at the end of the month would not be the start of major easing by the central bank. At (1937 GMT), the Canadian dollar was trading 0.04% lower at 1.3169 to the greenback. The currency touched its lowest intraday level since June 26 at 1.3194. Immediate resistance can be seen at 1.3200 (Higher Bollinger Band), an upside break can trigger rise towards 1.3237 (50 DMA).On the downside, immediate support is seen at 1.3143 (5 DMA), a break below could take the pair towards 1.3094 (11 DMA).
USD/JPY: The dollar strengthened against Japanese yen on Friday, as upbeat U.S. economic data boosted greenback across the board. Data showed U.S. GDP grew at a 2.1% annualized rate in the second quarter, weaker than the 3.1% pace in the first quarter but stronger than the 1.8% projected by economists polled. The greenback also received a lift after White House adviser Larry Kudlow told CNBC television the United States has ruled out intervention in currency markets to counter other nations from weakening their own currencies to help their exporters. The Federal Reserve is viewed as certain to cut rates when it meets next week even as the U.S. economy improves.The dollar was last trading 0.05 higher versus the Japanese yen at 108.68. Strong resistance can be seen at 109.01 (Higher Bollinger Band), an upside break can trigger rise towards 109.91 (31st May high).On the downside, immediate support is seen at 108.42 (50 DMA), a break below could take the pair towards 108.18(21 DMA).
Equities Recap
Large-cap companies pulled European stocks higher on Friday, as a surge in Britain’s Vodafone and strong earnings for media businesses and Nestle spurred recovery from a sell-off driven by the European Central Bank.
UK's benchmark FTSE 100 closed up 0.80 percent, Germany’s Dax ended up by 0.47 percent, France’s CAC finished the day up by 0.57 percent.
The S&P 500 and the Nasdaq hit fresh intraday highs and the dollar reached a two-month peak on Friday, as strong economic data and a stream of upbeat earnings reports stoked investor sentiment.
Dow Jones closed up by 0.19 percent, S&P 500 ended up by 0.74 percent, Nasdaq finished the day up by 1.11 percent.
Treasuries Recap
U.S. Treasuries were steady on Friday, after yields briefly rose on data showing that U.S. economic growth slowed less than expected in the second quarter.
Benchmark 10-year Treasuries fell 1/32 in price to yield 2.077%, up from 2.074% late on Thursday. The yields rose as high as 2.100% immediately after the GDP data.
Commodities Recap
Gold prices rose on Friday, after slipping to more than one-week lows in the previous session, as soft U.S. inflation numbers offset better-than-expected second-quarter economic growth that kept bets alive for an imminent interest rate cut.
Spot gold was up 0.3% at $1,418.58 per ounce as of 1:42 p.m. EDT (1742 GMT), but still on track for the first weekly drop in three weeks.U.S. gold futures settled up 0.3% at $1,419.30 per ounce.
