Market Roundup
• Yields recover as U.S. stocks stage rebound.
• U.S.-China trade talks must cover currency, U.S. Treasury chief says.
• British PM May struggles to sell at home Brexit deal emerging with EU.
• Sterling falls as traders prepare for EU summit next week.
• US Sep Import Prices m/m, 0.5%, 0.2% forecast 0.6% previous, -0.4% revised.
• US Sep Export Prices m/m, 0.0%, 0.2% forecast, -0.1% previous, -0.2% revised.
• US Oct U Mich Sentiment Prelim, 99.0, 100.4 forecast, 100.1 previous.
• US Oct U Mich Expectations Prelim, 89.1, 90.0 f forecast, 90.5 previous.
• US Oct U Mich 5-Yr Inf Prelim, 2.3%, 2.5% previous.
• Canada home prices flat in Sept, up 2.1 pct on year -Teranet.
• Latam stocks, FX rise as risk aversion lessens on Wall St bounce
Looking Ahead - Economic Data (GMT)
• 14 Oct 23:00 Japan Oct Reuters Tankan DI, 26 previous
• 15 Oct 04:30 Japan Aug Industrial Output Rev, 0.7% previous
• 15 Oct 04:30 Japan Aug Capacity Utilization m/m SA, -0.6% previous
Looking Ahead - Events, Other Releases (GMT)
• 15 Oct N/A European Union banking regulators and supervisors speak in Brussels at the annual conference of the Single Resolution Board in Brussels.
Currency Summaries
EUR/USD is likely to find support at 1.1507 levels and currently trading at 1.1561levels. The pair has made session high at 1.2446 and hit lows at 1.1586 levels. The euro slipped lower against the U.S. dollar on Friday as global equity prices rebounded from this week's rout and robust Chinese export figures soothed worries about the world's second-biggest economy and its trade war with Washington. China's exports jumped 14.5 percent in September from a year earlier, the biggest year-over-year increase in seven months and marking a record trade surplus with the United States. The data suggested that the tariffs U.S. President Donald Trump has slapped on Beijing have yet to bite. U.S. Treasury Secretary Steven Mnuchin said on Friday that he told China's central bank chief that currency issues need to be part of any further U.S.-China trade talks. An index that tracks the dollar versus six major currencies was up 0.23 percent at 95.234, reducing its weekly loss to 0.4 percent. The dollar index touched a seven-week high of 96.15 on Tuesday as the U.S. 10-year Treasury yield hit a seven-year peak due to worries about rising inflation and U.S. government debt supply.
GBP/USD is supported in the range of 1.3095 levels and currently trading at 1.3155 levels. It reached session high at 1.3219 and dropped to session low at 1.3145 levels. Britain's pound declined sharply against the dollar on Friday as investors booked profits after a rally that has left the British currency poised for a second consecutive week of gains on growing optimism about an agreement on a Brexit deal at a European Union Summit next week. Underscoring the British pound's gains have been favorable comments this week from EU Brexit negotiator Michel Barnier that a deal with Britain could be "within reach" next week. Negotiators from both sides have been locked in talks this week to overcome differences on the biggest outstanding hurdle to a deal - how to keep the UK frontier with the Irish republic free of border checks after Britain leaves the EU in March. Britain's Brexit minister Dominic Raab said on Friday that there remained significant sticking points that need to be resolved before a deal on the terms of the UK's departure from the EU can be agreed. The British currency slid to as low as $1.3151, down half a percent on the day. Against the euro, sterling was broadly steady at 87.575 pence.
USD/CAD is supported at 1.3000 levels and is trading at 1.3037 levels. It has made session high at 1.3051 and lows at 1.3004 levels. The Canadian dollar was little changed against a broadly stronger greenback on Friday as oil and stock prices rebounded, but the loonie lost ground for the week as investors worried about threats to the global growth outlook. The Canadian dollar was trading nearly unchanged at 1.3037 to the greenback, or 76.70 U.S. cents. The currency, which on Thursday touched its weakest intraday level in nearly two weeks at 1.3077, traded in a range of 1.3003 to 1.3052. On the data front, Canadian home prices were unchanged in September from August as the number of areas across the country posting price gains declined, data showed. The price of oil pared some of this week's losses despite a report from the International Energy Agency that deemed supply adequate and the outlook for demand weakening. For the week, the loonie was down 0.7 percent as investors worried that higher bond yields and trade conflicts could hurt global economic growth.
USD/JPY is supported around 111.79 levels and currently trading at 112.14 levels. It peaked to hit session high at 112.54 and made session lows at 111.81 levels. The dollar edged higher against the Japanese yen on Friday as the dollar gained momentum on a rebound in Wall Street after its two-day slide. Wall Street rose as investors returned to technology and other growth sectors, but gains were limited by ongoing worries about U.S.-China trade tensions and rising interest rates. The biggest market shakeout since February has been blamed on factors including fears about the impact of the U.S.-China tariff fight, a spike in U.S. bond yields this week and caution ahead of earnings season. On the data front, the University of Michigan consumer sentiment report on Friday showed a preliminary index for October of 99, slightly lower than expectations. But more importantly, the five-year inflation outlook component of the survey, a key measure that the Fed looks at, was at 2.3 versus 2.5 in September. The University of Michigan report followed U.S. data on Thursday that also showed tame inflation: a weaker-than-expected rise in U.S. consumer prices for September in both the headline and core number.
Equities Recap
European stocks failed to stage a recovery on Friday, posting their worst week since a market correction last February as a new sell-off hit bourses across the globe, amid worries about protectionism and fast-rising U.S. interest rates.
UK's benchmark FTSE 100 closed down 0.1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.22 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.1 percent.
The three major U.S. stock indexes gained ground on Thursday after a report that all countries could negotiate for exclusions from President Donald trump's proposed metals tariffs and that Canada and Mexico could be exempted indefinitely.
Dow Jones closed up by 1.10 percent, S&P 500 ended up by 1.40 percent, Nasdaq finished the day up by 2.30 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Friday, rising from the previous session on Wall Street's selloff, as equities recovered globally and investors unwound safe-haven bids.
U.S. 10-year note yields were at 3.140 percent, slightly up from 3.131 percent late Thursday.
U.S. 30-year bond yields rose to 3.315 percent, from Thursday's 3.305 percent. On the short end of the curve, U.S. two-year yields were at 2.836 percent.
Commodities Recap
Gold prices eased on Friday, the session after their biggest daily gain in more than two years, coming under pressure as the U.S. dollar climbed and global stocks rebounded from a six-day rout.
Spot gold was down 0.5 percent at $1,217.81 an ounce by 13:55 p.m. EDT (1755 GMT). On Thursday, bullion jumped about 2.5 percent on safe-haven buying during an equities selloff. U.S. gold futures settled down $5.6, or 0.46 percent, at $1,222.
Crude futures steadied late in the session on Friday, following the stock market slightly higher after earlier swinging lower on a weakening oil demand outlook.
Brent crude settled up 17 cents a barrel at $80.43, after dropping 3.4 percent on Thursday. U.S. crude futures rose 37 cents to $71.34 a barrel.
