Market Roundup
• US U Mich Sentiment Prelim Aug 97.6, 94.0 forecast, 93.4 previous.
• US U Mich Conditions Prelim Aug 111.0, 113.3 forecast, 113.4 previous.
• US U Mich Expectations Prelim Aug 89.0, 81.0 forecast, 80.5 previous.
• NY Fed raises US Q3 GDP growth view above 2%.
• Trump fires controversial chief strategist Bannon.
• Top US general reaffirms commitment to Japan amid N.Korea tensions.
• NAFTA negotiators hone in on origin rules, dispute settlement.
• Stability concerns focus at Fed ahead of Yellen speech.
• Canada inflation ticks higher in July on higher gas prices.
• China to curb "irrational" overseas Belt and Road investment-state planner.
• China launches probe into Brazilian broiler chicken imports.
Looking Ahead - Economic Data (GMT)
• (Aug 20) 23:00 Japan Reuters Tankan DI Aug, 26 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1682` levels and currently trading at 1.1751 levels. The pair has made session high at 1.1759 and hit lows at 1.1721 levels. The euro inched against US dollar on Friday as the exit of senior White House adviser Stephen Bannon, known for his economic nationalist views, weakened the greenback against basket of major currencies. President Donald Trump fired chief strategist Steve Bannon on Friday, the White House announced, ending the turbulent tenure of a rabble-rousing conservative media entrepreneur and political activist who was a darling of Trump's base. Trump has alienated Republican colleagues, corporate leaders and overseas allies this week with several controversial comments after violence related to a white nationalist protest in Virginia last weekend. His criticism of removals of U.S. Confederate monuments that celebrate defenders of slavery sent shivers through markets as investors bet that the stance would hurt Trump's ability to build enough consensus to deliver growth boosts such as tax reform and stimulus spending. On the data front, U.S. consumer sentiment rebounded in early August from an eight-month low in July, reflecting confidence in the economic outlook and personal finances. The dollar index fell 0.13 percent, with the euro up 0.25 percent to $1.1763.
GBP/USD is supported in the range of 1.2792 levels and currently trading at 1.2869 levels. It reached session high at 1.2893 and dropped to session low at 1.2830 levels. Sterling edged lower against the dollar on Friday and is set for its biggest weekly decline in more than two months as investors lightened positions after the week of lackluster data quashed expectations of policy tightening in the coming months. With less than a quarter point of a rate hike priced in by the futures markets until December 2018 and no major economic data due next week, currency markets are likely to remain rangebound in the coming days. One-year interest rate swaps have fallen nearly 8 basis points from a one-year high hit in late June to 26 basis points on Friday, indicating dwindling rate expectations. Sterling edged 0.1 percent lower to $1.12874 against the dollar and is set for its biggest weekly drop since June 11. Sterling was broadly flat against the single currency at 91.32 pence per euro as risk appetite took a beating across the board. Noise around Britain's strategy for leaving Europe and the talks on the issue with Brussels have provided little positive for investors worried that the process is becoming increasingly chaotic and may do longer-term damage to the economy.
USD/CAD is supported at 1.2550 levels and is trading at 1.2557 levels. It has made session high at 1.2606 and lows at 1.2554 levels. The Canadian dollar rose to a two-week high against its U.S. counterpart on Friday, as data showing an uptick in the Bank of Canada's core measures of inflation supported the view that the central bank will raise interest rates in the fall. Canada's overall annual inflation rate rose to 1.2 percent from June's 20-month low of 1.0 percent, matching analysts' expectations. Two of the three measures of core inflation that the Bank of Canada introduced last year saw gains, Statistics Canada said. Oil prices rose as the stock market strengthened and the U.S. dollar weakened, though investors remained worried about the global oil glut. Strengthening in the domestic economy prompted the central bank to raise interest rates in July for the first time in nearly seven years. The market sees a two-in-three chance of another hike in October, overnight index swaps figures show, little changed from before the inflation data. The Canadian dollar was trading at C$1.2575 to the greenback, or 79.45 U.S. cents, up 0.8 percent. The currency's weakest level of the session was C$1.2691, while it touched its strongest since Aug. 4 at C$1.2575.
USD/JPY is supported around 108.60 levels and currently trading at 109.36 levels. It peaked to hit session high at 109.60 and made session lows at 108.60 levels. The Japanese yen strengthened against the dollar on Friday as appetite for the safe-haven currencies increased as investors sought out the safe-haven currency in light of uncertainty about the White House's ability to push through its economic agenda. The yen was the major mover among developed world currencies. It rose nearly 1 percent against the dollar as nervousness over stock market valuations and the future of an eight-year global rally seeped into other assets. On the data front, U.S. consumer sentiment improved to its strongest level in seven months in early August, reflecting confidence in the outlook for the economy and in personal finances as the U.S. stock market holds near record highs, the University of Michigan said on Friday. The Japanese yen strengthened 0.10 percent versus the greenback at 109.30 per dollar. The dollar had hit its lowest point in a week against the yen earlier in the session.
Equities Recap
European travel stocks fell sharply on Friday after the van attack in tourist hotspot Barcelona.
UK's benchmark FTSE 100 closed up by 1.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.73 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.6 percent.
U.S. stocks closed lower after another volatile session on Friday as the latest White House shake-up kept investors jittery about the outlook for the Trump agenda.
Dow Jones closed down by 0.35 percent, S&P 500 ended down by 0.19 percent, Nasdaq finished the day down by 0.09 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Friday as the exit of senior White House adviser Stephen Bannon, known for his economic nationalist views, revived the appetite for stocks and reduced it for lower-yielding bonds.
The 10-year Treasury yield was 2.197 percent, unchanged from on Thursday and marginally higher on the week.
Commodities Recap
Oil prices rose on Friday as the stock market strengthened and the U.S. dollar weakened, but U.S. crude futures remained on track to close the week down as investors remained worried about the global oil glut.
WTI crude futures for September delivery rose $1.18 to $48.27 a barrel, a 2.5 percent gain. Brent crude futures for October delivery rose $1.40 to $52.43 a barrel, a 2.7 percent gain. Brent prices traded at a high point for the day of $52.57 and a low of $50.78 a barrel. About 218,987 lots of the front-month contract were traded by 16:15 GMT, some 65.5 percent of the previous session's volume.
Gold prices were little changed after jumping to their highest in more than nine months on Friday as the dollar retreated on political uncertainty in the United States and a suspected Islamist militant attack in Spain boosted bullion's safe-haven appeal.
Spot gold touched its highest since Nov. 9 at $1,300.80 per ounce, and was up 0.03 percent at $1,287.95 an ounce by 3:20 p.m. EDT (1920 GMT).U.S. gold futures for December delivery settled at $1,291.60.
