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America's Roundup: Dollar eases off 11-month high, euro rises after German, French business activity data, Gold prices edge up, Wall Street ends mixed, Oil jumps as OPEC agrees to modest output hikes-June 23rd, 2018

Market Roundup

• Trump threatens 20 pct U.S. tariff on EU car imports.

• OPEC agrees modest hike in oil supply after Saudi and Iran compromise.

• US Jun Markit Mfg PMI Flash, 54.6, 56.5 forecast, 56.4 previous.

• US Jun Markit Comp Flash PMI, 56.0, 56.6 previous

• US Jun Markit Svcs PMI Flash, 56.5, 56.4 forecast, 56.8 previous.

• US w/e ECRI Weekly Index, 150.1, 149.3 previous.

• US w/e ECRI Weekly Annualized, 3.1%, 2.7% previous.

• CA May CPI BoC Core YY, 1.3%, 1.5% previous.

• CA May CPI BoC Core MM, -0.1%, 0.1% previous.

• CA May CPI Inflation YY, 2.2%, 2.5% forecast, 2.2% previous.

• CA May CPI Inflation MM, 0.1%, 0.3% forecast, 0.3% previous.

• CA Apr Retail Sales MM, -1.2%, 0.0% forecast, 0.6% previous.

• CA Apr Retail Sales Ex-Autos MM, -0.1%, 0.5% forecast, -0.60% previous

Looking Ahead - Economic Data (GMT)

• No economic data is scheduled

Looking Ahead - Events, Other Releases (GMT)

• No events are scheduled

Currency Summaries

EUR/USD is likely to find support at 1.1600 levels and currently trading at 1.1661 levels. The pair has made session high at 1.1667 and hit lows at 1.1615 levels. The euro rose higher against US dollar on Friday as euro was boosted after traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency. The euro registered a weekly gain of nearly 0.5 percent against the dollar, reversing the prior week's 1.35 percent drop tied to the European Central Bank's hint it would hold interest rates through the summer of 2019.The euro's advance, together with a rebound in commodity-linked and emerging market currencies, pressured the dollar which ended lower on the week. The single currency was also bolstered after Greece clinched debt relief and received a cash infusion from the euro zone. The euro rose 0.5 percent to $1.1662, and increased 0.6 percent to 128.17 yen. Despite this week's gains, the euro is still vulnerable to regional political instability and U.S. tariffs. An index that tracks the dollar versus a basket of currencies including the euro  was down 0.24 percent at 94.517, retreating from an 11-month peak of 95.529 on Thursday.

GBP/USD is supported in the range of 1.3209 levels and currently trading at 1.3259 levels. It reached session high at 1.3299 and dropped to session low at 1.3244 levels. Sterling rose to six-day high against the dollar after a Bank of England meeting revived expectations of a rate hike this year, but sterling's gains were checked by fears of a breakdown in Brexit talks next week. Sterling has struggled through much of June, weighed down by worries about a slowdown in the economy and fraught attempts by British diplomats to secure a deal to exit the European Union in March. The currency rallied on Thursday, though, when the Bank of England's chief economist unexpectedly voted for an interest rate hike. The central bank kept interest rates on hold but the decision by Andy Haldane to join two other policymakers in calling for rates to rise to 0.75 percent lifted the pound off a seven-month low as expectations grew that the BoE could tighten policy in August. The upbeat outlook for interest rates and a weaker dollar on Friday helped sterling climb half a percent to a six-day high of $1.3312, though the currency is still down 7.5 percent from a post-Brexit high hit in April. Markets now see a 50 percent likelihood of the BoE raising interest rates in August by 25 basis points and a 90 percent chance of a rate hike happening by the end of 2018.

USD/CAD is supported at 1.3191 levels and is trading at 1.3267  levels. It has made session high at 1.3382 and lows at 1.3262 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as weaker greenback and higher oil prices boosted Canadian dollar across the board. Oil prices rose sharply after OPEC agreed to only a modest increase in output to compensate for losses in production at a time of rising global demand. The dollar pulled back from an 11-month peak against a basket of major currencies on Friday as investors took profits after the currency's earlier rally. On the data front, Canada's annual inflation rate stayed unchanged at 2.2 percent in May, Statistics Canada data indicated, less than the 2.5 percent forecast by analysts. Canadian retail sales in April dropped by 1.2 percent, in part due to bad weather that hit sales of autos and gardening equipment. Economists had predicted no change. The Canadian dollar was trading last trading at C$1.3269 to the greenback. The currency touched its weakest intraday level since June 12, 2017 at C$1.3382.The dollar index, tracking it against six major currencies, fell 0.22 percent, with the euro up 0.51 percent to $1.166. 

AUD/USD is supported around 0.7608 levels and currently trading at 0.7635 levels. It hit session high at 0.7642 and made session lows at 0.7610 levels. The Australian dollar strengthened against its U.S. counterpart on Friday as its U.S. counterpart weakened across the board on profit-taking, though the antipodean currency remained vulnerable to a return of trade friction at any time. China kept up its hostile rhetoric with the United States on Friday, saying through the official China Daily that U.S. protectionism would hurt its own economy. The editorial followed stinging remarks from China's commerce ministry on Thursday accusing the United States of being "capricious" over bilateral trade issues. The Australian dollar inched up to $0.7440, from a one-year trough of $0.7345 hit on Thursday, but was still down 0.7 percent for the week. Major support lies at $0.7329, a low from May last year. A soft reading on regional manufacturing in the United States and a sharp rebound in sterling had put a squeeze on long U.S. dollar positions overnight, sending the currency broadly lower. Yet the Aussie has still lost two U.S. cents over the past two weeks, suffering in wake of a rate rise by the Federal Reserve and the latest bout of global brinkmanship on tariffs.

Equities Recap

Better-than-expected euro zone economic data and energy stocks galvanised by an OPEC agreement on a modest increase in oil production helped drive a bounce in European shares at the end of a tumultuous week marred by trade war worries.

UK's benchmark FTSE 100 closed up by 1.7 percent, the pan-European FTSEurofirst 300 ended the day up by 1.14 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 1.4 percent.

The S&P 500 and Dow Jones Industrial Average advanced on Friday, with the Dow poised to end an eight-day losing streak, as a jump in oil prices lifted energy stocks, but losses in technology stocks kept the Nasdaq in check.

Dow Jones closed up by 0.47 percent, S&P 500 ended up 0.16 percent, Nasdaq finished the day down by 0.31 percent.

Treasuries Recap 

U.S. Treasury yields were little changed on Friday, trading in narrow ranges, as risk appetite improved a bit with shares on Wall Street higher, but worries over a trade conflict with China kept investors cautious.

In afternoon trading, U.S. 10-year yields were up slightly at 2.9 percent, from Thursday's 2.897 percent.

U.S. 30-year yields were almost flat at 3.040 percent , compared with 3.043 percent on Thursday.

On the short end, U.S. two-year note yields edged up to 2.549 percent, from 2.541 percent late on Thursday.

Commodities Recap

Gold prices rose from six-month lows on Friday as the dollar slipped, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further.

Spot gold gained 0.2 percent at $1,268.76 per ounce by 1:34 p.m. EDT (1734 GMT), headed for a 0.8 percent weekly drop. In the prior session, bullion touched $1,260.84, its lowest since Dec. 19, 2017.

U.S. gold futures for August delivery settled up 20 cents, 0.02 percent, at $1,270.70 per ounce.

Oil prices soared on Friday after oil producers agreed to modest crude output increases to compensate for losses in production at a time of rising global demand.

Brent crude settled up $2.50, or 3.4 percent, to $75.55 a barrel, supported by the OPEC announcement.

U.S. crude rose $3.04, or 4.6 percent, to $68.58 a barrel, after a surprise large decline of oil supplies at the storage hub at Cushing, Oklahoma.
 

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