Market Roundup
•US Apr Retail Inventories Ex Auto 1.7%,2.5% previous
•US Apr Personal Income (MoM) 0.4%,0.5%forecast, 0.5% previous
•US Apr Goods Trade Balance -105.94B,-127.12B previous
•US Apr Core PCE Price Index (YoY) 4.9%,4.9% forecast, 5.2% previous
•US Apr Personal Spending (MoM) 0.9%, 0.7% forecast, 1.1% previous
•US Apr PCE Price index (YoY) 6.3,6.6 previous
•US Apr PCE price index (MoM) 0.2%,0.9% previous
•US Apr Real Personal Consumption (MoM) 0.7%, 0.2% previous
•US Apr Core PCE Price Index (MoM) 0.3% ,0.3% forecast, 0.3% previous
•US May Michigan 5-Year Inflation Expectations 3.00%,3.00% forecast, 3.00% previous
•US May Michigan Current Conditions 63.3, 63.6 forecast,69.4 previous
•US May Michigan Inflation Expectations 5.3%,5.4% forecast,5.4% previous
•US Michigan Consumer Sentiment 58.4,59.1 forecast, 65.2 previous
•US May Michigan Consumer Expectations 55.2, 56.3 forecast, 62.5 previous
•Canada Mar Budget Balance -25.75B ,5.47B previous
•Canada Mar Budget Balance (YoY) -95.57B,-69.82B previous
•U.S. Baker Hughes Oil Rig Count 574,576 previous
•U.S. Baker Hughes Total Rig Count 727, 728 previous
Looking Ahead - Economic Data (GMT)
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro strengthened on Friday as traders pared expectations for U.S. Federal Reserve interest rate hikes and as improving inflation and consumer spending data eased recession fears. Although inflation continued to increase in April, it rose less than in recent months, data showed on Friday. The personal consumption expenditures (PCE) price index rose 0.2%, the smallest gain since November 2020, after shooting up 0.9% in March. For the 12 months through April, the PCE price index advanced 6.3% after jumping 6.6% in March. The euro has been the chief beneficiary of the dollar's decline. The single currency was up 0.12 the day at $1.0731. Immediate resistance can be seen at 1.0755(38.2%fib), an upside break can trigger rise towards 1.0813(Higher BB).On the downside, immediate support is seen at 1.0706(5DMA), a break below could take the pair towards 1.0649(233.6%fib).
GBP/USD: Sterling steadied against dollar on Friday as sterling was helped by a large government spending package to support households and which economists said should support the economy in the short term. The government on Thursday announced a 25% windfall tax on oil and gas producers’ profits to help fund a 15 billion pound ($18.9 billion) package of support for households struggling to meet soaring energy bills. The pound was 0.28% higher at $1.2624 after earlier reaching $1.2666. It is on course for a 1% gain this week. Immediate resistance can be seen at 1.2657(38.2%fib),an upside break can trigger rise towards 1.2703(Higher BB).On the downside, immediate support is seen at 1.2579(5DMA), a break below could take the pair towards 1.2495 (23.6%fib).
USD/CAD: The Canadian dollar rose to its highest level in more than three weeks against its U.S. counterpart on Friday, and posted its second straight weekly gain as recent volatility in global financial markets continued to subside. Gains for the loonie came ahead of a Bank of Canada interest rate decision next Wednesday. The central bank is expected to hike by half a percentage point for a second straight meeting to tackle soaring inflation. The loonie traded 0.3% higher at 1.2730 to the greenback, after touching its strongest since May 5 at 1.2729. For the week, the currency was up 0.8%. Immediate resistance can be seen at 1.3423 (300DMA),, an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3283 (Daily low), a break below could take the pair towards 1.3220 (23.6%fib).
USD/JPY: The dollar edged lower against the Japanese yen on Friday as investors a took comfort from Federal Reserve minutes showing a pause to its rate hikes is on the cards later this year.The Fed’s minutes of its May meeting released on Wednesday confirmed two more 50-basis point hikes each in June and July, but policymakers also suggested the potential for a pause later in the year. Signs that aggressive Fed action may already be slowing economic growth are also emerging. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week as the labor market remained tight. Strong resistance can be seen at 127.28(5DMA), an upside break can trigger rise towards 128.53(23.6%fib).On the downside, immediate support is seen at 126.53 (Lower BB), a break below could take the pair towards 125.78(38.2%fib).
Equities Recap
European stocks closed higher on Friday, extending recent gains, amid easing worries about tighter monetary stance from the Federal Reserve, and on some upbeat earnings updates from U.S. retailers.
UK's benchmark FTSE 100 closed up by 0.27 percent, Germany's Dax ended up by 1.62 percent, France’s CAC finished the day up by 1.64 percent.
Wall Street closed sharply higher on Friday as signs of peaking inflation and consumer resiliency sent investors into the long holiday weekend with growing optimism that the Federal Reserve will be able to tighten monetary policy without tipping the economy into recession.
Dow Jones closed up by 1.76 percent, S&P 500 was last up by 2.47 percent, Nasdaq was up by 3.44 % percent.
Treasuries Recap
U.S. Treasury yields ended near six-week lows on Friday as concerns about growth and signs that inflation may have peaked led investors to speculate that the Federal Reserve may not raise rates as much as previously expected.
Benchmark 10-year yields have dropped from 3-1/2 year highs reached earlier this month on concerns that the U.S. central bank's aggressive rate hikes could tip the economy into recession.
Commodities Recap
Gold prices edged up on Friday and were headed for a second consecutive weekly gain propped up by a pullback in the dollar and U.S Treasury yields, while fears of aggressive policy tightening by the Federal Reserve subsided.
Spot gold gained 0.1% to $1,852.22 per ounce by 2:16 p.m. ET (1816 GMT). It has risen about 0.4% for the week.U.S. gold futures settled up 0.2% at $1,851.3.
Oil prices rose on Friday, closing out the week with gains ahead of the U.S. Memorial Day holiday weekend, the start of peak U.S. demand season, and as European nations negotiate over whether to impose an outright ban on Russian crude oil.
Brent crude rose $2.03, or 1.7%, to settle at $119.43. U.S. West Texas Intermediate (WTI) crude rose 98 cents, or 0.9%, to settle at $115.07 a barrel. For the week, Brent rose 6% while WTI gained 1.5%.
