Market Roundup
• US consumer spending slows +0.1% v 0.2% forecast & previous; but inflation is rising PCE price Index y/y 2.1% v 1.9% previous.
• US Personal income m/m 0.4 v 0.4% forecast 0.5% previous.
• US Chicago PMI 57.7 v 56.9 forecast, 57.4 previous.
• U Mich sentiment final 96.9 v 97.6 forecast, 97.6 previous.
• U Mich expectations final 86.5 v 87 forecast, 86.7 previous.
• U Mich 1-yr inflation final 2.5% v 2.4% previous, 5-yr 2.4% v 2.2% previous.
• Atlanta Fed’s GDPNow: US econ seen growing 0.9% in Q1 vs 1% March 24.
• NY Fed’s Nowcast: US economy seen growing 2.87% in Q1 v 2.96% Mar 24; Q2 seen growing 2.58% v 2.66% Mar 24.
• Fed’s Dudley A couple more hikes this year reasonable, not at stage where there is great urgency to tighten policy.
• Fed’s Kashkari: Fed needs to be more transparent on how it makes decisions.
• Fed’s Bullard: Ending bond reinvestments could cause Fed to slow US rate hikes.
• Euro zone inflation plunge may vindicate cautious Draghi, Inflation in currency union falls to 1.5% in March.
• ECB’s Coeure: ECB guidance valid but order of next steps could change.
• Top Venezuela official breaks with government, protests escalate.
• Stocks dips as investors lock in gains after strong quarter.
Looking Ahead - Economic Data (GMT)
• 23:30 Australia AIG Manufacturing Index Mar 59.30-previous
• 23:50 Japan Tankan Big Mf Index Q1 forecast 14, 10- previous
• 23:50 Japan Tankan Big Manufacturing Outlook DI Q1 forecast 13, 8- previous
• 23:50 Japan Tankan All-Big Capex Est Q1 forecast -0.10%, 5.50%- previous
• 23:50 Japan Tankan Small Manufacturing Index Q1 forecast 3, 1- previous
• 23:50 Japan Tankan Small Manufacturers Outlook DI Q1 forecast 1, -4- previous
• 23:50 Japan Tankan Small Non- Manufacturers Index Q1 forecast 2, 2- previous
• 23:50 Japan Tankan Small non- Manufacturers outlook DI Q1 forecast -1, -2- previous
• 23:50 Japan Tankan All Sm Capex Est Q1 forecast -18.40%, -6.20%- previous
• 00:30 Japan Nikkei Mfg PMI Mar 52.6- previous
• 01:30 Australia Building Approvals* Feb forecast -0.5%, 1.80%- previous
• 01:30 Australia Private House Approvals* Feb -3.00%- previous
• 01:30 Australia Retail Sales MM* Feb forecast 0.3%, 0.40%- previous
• 01:45 China Caixin Mfg PMI Final Mar forecast 51.6, 51.70- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0643 levels and currently trading at 1.0672 levels. The pair has made session high at 1.0702 and hit lows at 1.0668 levels. The euro dipped against the U.S. dollar on Friday as investors revised their expectations for when the European Central Bank will begin to tighten monetary policy and uncertainty over a series of elections in Europe weighted on euro.Dollar was flat on Friday as a Federal Reserve official's seemingly dovish remarks and uninspiring data on the U.S. economy doused the sanguine mood from earlier this week. New York Fed President William Dudley, seen as one of the most important members of the Fed's rate-setting committee, said the central bank was in no rush to tighten monetary policy. U.S. economic data on Friday, meanwhile, was a mixed bag, with the rise in year-on-year inflation to a nearly five-year high, a stronger-than-expected factory activity in the U.S. Midwest and easing consumer sentiment for March. The report backed the Fed's view that the U.S. economy is growing at a steady, but not a rapid pace.
GBP/USD is supported in the range of 1.2451 levels and currently trading at 1.2530 levels. It reached session high at 1.2547 and dropped to session low at 1.2522 levels. Sterling rose against the dollar on Friday as mixed bag of economic numbers pushed sterling higher against the greenback, with upbeat foreign investment inflows at the end of last year offsetting another set of warning signs on household spending. The pound fell initially on the detailed breakdown of fourth-quarter gross domestic product and other data that showed consumers borrowing more, and the dominant services industry contracting for the first time since last March. But a rough halving of Britain's huge current account deficit as a percentage of output, and a rise in foreign direct investment to 110 billion pounds offered hope that one of the economy's big vulnerabilities may already be fading as ministers begin 18 months of talks on leaving the European Union. Driven by a late surge around month-end fixing of major currencies at 1500 GMT, that hope helped the pound gain almost half a percent on the day to $1.2536 by 20:00 GMT. It was also 0.2 percent higher at 85.41 pence per euro.
USD/CAD is supported at 1.3258 levels and is trading at 1.3299 levels. It has made session high at 1.3351 and lows at 1.3283 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday after data showing robust domestic growth in January increased pressure on the Bank of Canada to abandon its cautious stance on a possible interest-rate hike. Canada’s economy expanded by a greater-than-expected 0.6 percent in January from December, indicating first-quarter growth will be stronger than expected. Analysts in a survey had forecast 0.3 percent growth. On Tuesday, Bank of Canada Governor Stephen Poloz defended the central bank's cautious outlook on monetary policy tightening which contrasts with the U.S. Federal Reserve's hike earlier this month and plan for more - in the face of recent stronger-than-expected domestic data. The chance of a Bank of Canada interest rate hike this year rose to nearly 30 percent from less than 25 percent before the GDP report, data from the overnight index swaps market showed. The Canadian dollar was last trading at C$1.3310 to the greenback, or 75.20 U.S. cents, stronger than Thursday's close of C$1.3334, or 75.00 U.S. cents.
AUD/USD is supported around 0.7583 levels and currently trading at 0.7640 levels. It hit session high at 0.7651 and made session lows at 0.7621 levels. The Australian dollar declined against US dollar in the US session on Friday as investors took profits on Australian dollars initial rally. Australian dollar earlier in the Asian session powered up to daily as an upbeat survey on Chinese industry supported Australian dollar. China’s official Purchasing Managers' Index (PMI) rose to 51.8 in March, from the previous month's 51.6, as the industrial sector benefited from higher prices and a recovery in demand fuelled by a construction boom. The Australian dollar was last trading at $0.7637 after briefly popping up to $0.7750 in the early US session, but quickly fizzled to as low as $0.7622 in the US session. The Aussie is set to end the week slightly higher, having traded in a sideways direction since the beginning of week.
Equities Recap
European shares sealed their best quarter since 2015 on Friday, with inflows to European equities picking up on strong economic data and corporate earnings, despite a packed political calendar ahead.
UK's benchmark FTSE 100 closed up down 0.4 percent, FTSEurofirst 300 ended the day up by 0.20 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.5 percent.
Wall Street fell on Friday, pulled down by Exxon and JPMorgan Chase as investors wrapped up a strong quarter and weighed whether corporate earnings reports will justify the market's lofty valuations.
Dow Jones closed down by 0.31percent, S&P 500 ended down 0.22 percent, Nasdaq finished the day down by 0.03 percent.
Treasuries Recap
U.S. Treasury debt yields fell on Friday after a chorus of Federal Reserve officials questioned the need for a faster pace of interest rate increases given tame inflation and just modest growth in the U.S. economy.
In late trading, U.S. 10-year notes were up 6/32 in price to yield 2.396 percent, compared with 2.418 percent on Thursday.
U.S. two-year note yields were at 1.257 percent, down from 1.286 percent late on Thursday.
Commodities Recap
Gold notched a quarterly gain of about 8.4 percent on Friday, marking its best quarter in a year, as uncertainty over U.S. President Donald Trump's tax and investment plans and elections in Europe fueled demand for bullion as a safe haven.
Spot gold was up 0.4 percent at $1,247.4 an ounce at 3:48 p.m EDT (1948 GMT). U.S. gold futures ended the session 0.2 percent higher at $1247.30 an ounce.
Oil prices fell on Friday after a three-day rally ran out of steam as a higher U.S. rig count signaled rising production from shale, contributing to the global supply glut.
Brent futures settled down 13 cents at $52.83 a barrel. The contracts have lost around 7 percent since the previous quarter, the largest quarterly losses since late 2015.
U.S. crude futures settled up slightly, rising 25 cents to $50.60 a barrel after slipping below $50. They ended the quarter at about 5.7 percent lower, also the worst quarterly loss since late 2015.
