Market Roundup
• Trump says U.S. will only rejoin Pacific trade pact if terms are improved.
• Fed's Rosengren optimistic on economy, wary of U.S. trade risks.
• Fed's Bullard calls inflation data 'unsurprising,' sticks to policy stance.
• U.S. Apr U Mich Sentiment Prelim, 97.8, 100.5 forecast, 101.4 previous.
• U.S. Apr U Mich Conditions Prelim, 115, 120 forecast, 121.2 previous.
• U.S. Apr U Mich Expectations Prelim, 86.8, 88.1 forecast, 88.8 previous.
• U.S. Apr U Mich 1 Yr Inf Prelim, 2.7%, 2.8% previous.
• U.S. Apr U Mich 5-Yr Inf Prelim, 2.4%, 2.5% previous.
• U.S. Feb JOLTS Job Openings, 6.052 mln, 6.173 mln forecast, 6.312 mln prev, 6.228 mln revised.
• German companies face higher trade barriers - DIHK survey.
• Threat of Western strikes hangs over Syria, U.S., France assail Assad at U.N.
• U.S. seeks to outshine China at Latam summit, without Trump.
• S&P revises Japan's outlook to positive from stable
Looking Ahead - Economic Data (GMT)
• 15 Apr 22:45 New Zealand Food Price Index, -0.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 16 Apr 07:00 Riksbank executive board meeting in Stockholm
• 16 Apr 08:10 BOJ's Masayoshi Amamiya speaks on fintech in Tokyo
• 16 Apr 17:15 Atlanta Fed's Raphael Bostic speaks on economy and market trends in Florence
Currency Summaries
EUR/USD is likely to find support at 1.2279 levels and currently trading at 1.2337 levels. The pair has made session high at 1.2342 and hit lows at 1.2314 levels. The euro edged higher against US dollar on Friday as traders waited for more clarity on a possible Western military intervention in Syria.The prospect of Western military action in Syria that could lead to confrontation with Russia hung over the Middle East on Friday but there was no clear sign a U.S.-led attack was imminent. As international chemical weapons experts travelled to Syria to investigate a suspected gas attack by government forces which killed dozens of people, French President Emmanuel Macron spoke to Russia's Vladimir Putin and expressed concern about a worsening situation. Russia, the main ally of Syrian President Bashar al-Assad, says there is no evidence of a chemical attack in Douma and has warned the United States and its allies against conducting any military strike. But U.S. Ambassador to the United Nations, Nikki Haley, said on Friday that Washington estimated Assad's forces had used chemical weapons at least 50 times during the seven-year-long Syrian conflict. On the data front, the preliminary April reading of consumer sentiment from the University of Michigan fell to a reading of 97.8, down from 101.4 in March. Consensus forecast was for a reading of 100.5. The dollar index rose 0.01 percent, with the euro up 0.1 percent to $1.2337.
GBP/USD is supported in the range of 1.4188 levels and currently trading at 1.4238 levels. It reached session high at 1.4294 and dropped to session low at 1.4218 levels. Sterling rose to a new 10-week high against the dollar on Friday and pulled itself out of a six-month trading range against the euro, prompting investors to unwind their long euro positions. Against the euro, the pound has been trapped in a 86.5 pence to 90 pence per euro range for nearly six months, but cautious minutes from the European Central Bank this week and firm expectations of a rate hike from the Bank of England in May pushed the British currency to an 11-month high. Against the euro, sterling rallied 0.4 percent to 86.32 pence per euro, its highest since late May 2017. On a weekly basis, it is set for its biggest gain since Dec. 1.Sterling also pushed towards a new post-Brexit referendum high versus the dollar, rising 0.4 percent to $1.4296. It hit its highest since the 2016 vote in late January 2018, at $1.4346.Expectations of a rate rise have been a major driver of sterling's gains in recent days while the euro has suffered from from more top policymakers' comments about its recent strength, and some lacklustre data. The market is pricing in a 65-percent chance of a 25 basis point hike next month.
USD/CAD is supported at 1.2542 levels and is trading at 1.2614 levels. It has made session high at 1.2619 and lows at 1.2551 levels. The Canadian dollar steadied on Friday against its U.S. counterpart but was on track to advance 1.5 percent for the week as stocks rose and the United States weighed the prospect of rejoining the Trans Pacific Partnership (TPP) trade pact. U.S. stocks rose after a trio of big banks reported strong quarterly results, while geopolitical risks and concerns over trade war eased. Canada's commodity-linked currency tends to track movement in stocks due to the signals that market may send about prospects for economic growth. U.S. President Donald Trump said the United States would only join the TPP, a multinational trade deal his administration walked away from last year, if it offered "substantially better" terms than those provided under previous negotiations. U.S. crude prices were up 0.3 percent at $67.29 a barrel. Oil, one of Canada's major exports, has been boosted this week by Trump's comments about possible military action in Syria and reports of dwindling global oil stocks. In addition to higher oil prices, the currency has benefited recently from investor optimism over a deal to revamp the North American Free Trade Agreement, stronger-than-expected domestic jobs data and an upbeat business survey from the Bank of Canada. The Canadian dollar was little changed at C$1.2603 to the greenback. The currency traded in a range of C$1.2553 to C$1.2619.
USD/JPY is supported around 106.90 levels and currently trading at 107.35 levels. It peaked to hit session high at 107.78 and made session lows at 107.21 levels. The Japanese yen edged higher against the dollar on Friday as greenback attempt to recover in volatile trade but eventually gave up ground on risk aversion sparked by escalated tensions between Moscow and Washington. The tensions between Moscow and Washington dominated the market this week. On Friday, Russian lawmakers presented a list of possible counter-sanctions against the United States that involved a wide range of measures from restrictions on use of U.S.-made software to bans on medicine and alcohol. Market uncertainty this week was also boosted by U.S. President Donald Trump's threat to carry out missile strikes in response to a suspected poison gas attack in Syria. But Trump tempered his remarks over the subject and even as he consulted allies such as Britain and France, who could join in any U.S.-led strikes on Syria, there were signs of efforts to prevent the crisis from spiraling out of control. The dollar index, which measures the greenback against a basket of six major currencies, was 0.01 percent higher at 89.78. On the data front, the government said domestic job openings fell to 6.052 million in February from a record high of 6.228 million in January.The University of Michigan said its reading on U.S. consumer sentiment fell to 97.8 in early April, down from a 14-year peak of 101.4 in late March.
Equities Recap
Budding optimism on global trade helped European shares advance on Friday although a turn lower on Wall Street after disappointing earnings cut some of the market's earlier gains.
UK's benchmark FTSE 100 closed up by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.11 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 0.1 percent.
Financial stocks led a drop on Wall Street on Friday as results from big banks failed to provide enthusiasm and fear of broader conflict in Syria further unnerved investors.
Dow Jones closed down by 0.48 percent, S&P 500 ended down by 0.28 percent, Nasdaq finished the day down by 0.47 percent.
Treasuries Recap
The U.S. Treasury yield curve hovered at its lowest level in more than a decade on Friday as short-dated yields rose more than longer-dated ones this week on expectations of further interest rate increases from the Federal Reserve.
The yield on 10-year Treasury notes was down 1.1 basis points to 2.823 percent. Two-year Treasury note yields were up 1.7 basis points to 2.365 percent after hitting 2.373 percent earlier Friday, which was the highest since Sept. 2008.
Commodities Recap
Gold prices rose on Friday, heading for a second consecutive weekly gain on lingering uncertainty over Western military action in Syria.
Spot gold increased 0.7 percent at $1,344.40 per ounce by 1:38 p.m. EDT (1738 GMT), set for a weekly gain of nearly 1 percent. U.S. gold futures for June delivery settled up $6, or 0.5 percent, at $1,347.90.
Oil prices rose on Friday and were headed for their largest weekly gain since July, amid support from concerns over the prospect of Western military action in Syria and reports of dwindling global oil stocks.
Brent crude recovered from losses early in the session and was up 67 cents to $72.69 a barrel, and set for about a $5 weekly gain, or 8 percent.
U.S. West Texas Intermediate (WTI) crude futures rose 36 cents to $67.43 a barrel, up 8 percent for the week.
