Market Roundup
• U.S. House passes bill to reopen some agencies shut down in wall fight
• Powell sought quick end in 2013 to Fed's bond-buying program
• UK economy slows as global worries, Brexit weigh on factories
• Leading Brexit donors say Britain will reverse decision to leave EU
• US Dec CPI MM, SA, -0.1%, -0.1% forecast, 0.0% previous
• US Dec CPI YY, NSA, 1.9%, 1.9% forecast, 2.2% previous
• US Dec Core CPI MM, SA 0.2%, 0.2% forecast, 0.2% previous
• US Dec Core CPI YY, NSA, 2.2%, 2.2% forecast, 2.2% previous
• US Dec Core CPI Index, SA, 260.03, 259.48 previous
• ECB rate hike still possible this year, narrative unchanged - Nowotny
Looking Ahead - Economic Data (GMT)
• 14 Jan N/A China Dec Trade Balance USD, 51.53 bln forecast, 44.71 bln previous
Looking Ahead - Events, Other Releases (GMT)
• No major economic events scheduled
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Friday, as risk appetite rose on hopes of a halt to the U.S. rate hike cycle, and the world's top two economies settling a months-long trade row. Data on Friday showed U.S. consumer prices fell for the first time in nine months in December, which likely supports recent remarks by several policymakers, including Powell, for caution about raising interest rates this year. The euro was down 0.33 percent at $1.1462. Strong resistance can be seen at 1.1569 (Jan 10th high), an upside break can trigger rise towards 1.1569 (Jan 10th high).On the downside, immediate support is seen at 1.1445 (9 DMA), a break below could take the pair towards 1.1402 (21 DMA).
GBP/USD: The Sterling strengthened against the dollar on Friday, as growing expectations that Britain will seek to delay its scheduled departure date from the European Union supported the cable.A denial by Prime Minister Theresa May's spokeswoman of a newspaper report knocked sterling off highs but it remained up on the day, with analysts citing a growing sense among some investors that Britain will not be leaving the EU on March 29. Sterling rose as much as 0.6 percent to $1.2851, its highest since late November, before settling around $1.28. The British currency is headed for its best week since early November. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2889 (100 DMA), an upside break can trigger rise towards 1.2996 (23.6% retracement level).On the downside, immediate support is seen at 1.2709 (11 DMA), a break below could take the pair towards 1.2615 (Jan 4th low).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday, as oil prices fell, but the loonie still advanced for a second consecutive week after the Bank of Canada said the challenges facing the economy were temporary. The Canadian dollar was last trading down 0.21 percent at 1.3263 to the greenback. The price of oil, one of Canada's major exports, fell on worries about a global economic slowdown. U.S. crude oil futures settled 1.9 percent lower at $51.59 a barrel. Immediate resistance can be seen at 1.3274 (38.2% retracement level), an upside break can trigger rise towards 1.3344 (50% retracement level).On the downside, immediate support is seen at 1.3170 (100 DMA), a break below could take the pair towards 1.3100 (Psychological level).
USD/JPY: The dollar gained against Japanese yen on Friday, as investors adopted a wait-and-see approach as they tracked developments in U.S.-China trade talks. Both the United States and China have underscored satisfactory progress in their bid to resolve the months-long trade dispute that has rattled global financial markets. Investors remain wary as the world's top two economies continue their talks ahead of the March 1 deadline when the 90-day trade truce between Washington and Beijing ends. The dollar was 0.12 higher versus the Japanese yen at 108.55. Strong resistance can be seen at 108.94 (50% retracement level), an upside break can trigger rise towards 109.54 (61.8% retracement level).On the downside, immediate support is seen at 108.00 (Psychological level), a break below could take the pair towards 107.63 (23.6% retracement level).
Equities Recap
European shares closed higher on Friday after hitting one-month highs as investor appetite for assets considered risky remained firm, despite caution over trade and ahead of earnings season.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.03 percent, Germany's Dax ended down by 0.3 percent, France’s CAC finished the day down by 0.7 percent.
Wall Street dipped slightly on Friday, breaking a five-session rally, as energy shares declined and investors looked ahead to earnings season, which kicks off next week with Citigroup, JPMorgan and other big banks.
Dow Jones closed down by 0.04 percent, S&P 500 ended down by 0.04 percent, Nasdaq finished the down up by 0.23 percent.
Treasuries Recap
U.S. Treasury debt prices gained on Friday as stocks weakened in choppy trading, and as bonds were also helped by the weight of new Treasury supply this week being lifted from the market.
Benchmark 10-year notes gained 10/32 in price to yield 2.697 percent, down from 2.731 percent late Thursday.
Commodities Recap
Gold edged higher on Friday and was on track for its fourth successive weekly gain, as U.S. stocks slipped and expectations rose that the U.S. Federal Reserve might halt its monetary policy tightening cycle.
Spot gold was up 0.2 percent at $1,288.47 an ounce by 1:52 p.m. EST (1852 GMT). U.S. gold futures settled 0.2 percent higher at $1,289.5.
Oil prices fell nearly 2 percent on Friday as investors worried about a global economic slowdown, snapping a nine-day winning streak spurred by U.S.-China trade hopes, but clung to some gains from that rally to end the week higher.
Brent crude futures dropped $1.2 to settle at $60.48 a barrel, a 1.95 percent loss. U.S. West Texas Intermediate (WTI) crude futures were down $1 to settle at $51.59 a barrel, or 1.9 percent.
