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Americas Roundup: Dollar slides on hopes of Brexit, U.S.-China trade deals, Wall Street jumps ,Gold slides, Oil rises 2% after reports of Iranian tanker attack-October 12th,2019

Market Roundup

• Price of U.S. oil increases 2%

• Trump says U.S.-China negotiations “very, very good”

• US Sep Export Price Index (MoM)  -0.2%, -0.2% forecast, -0.6% previous

• US   Export Price Index (YoY) -1.6%,-1.5% forecast, -1.4% previous    

• US Sep Import Price Index (MoM) 0.2%,-0.1% forecast, -0.2% previous

• US Import Price Index (YoY) -1.6%,-1.8% forecast, -2.0% previous

• Canada Sep Employment Change 53.7K, 10.0K forecast, 81.1K previous

• Canada Sep   Full Employment Change 70.0K, 23.8K previous

• Canada Sep Participation Rate 65.7%, 65.8% forecast 65.8% previous

• Canada Sep Unemployment Rate 5.5%, 5.7% forecast 5.7% previous

• Russia Aug Trade Balance 12.01B, 12.00B forecast, 10.79B previous

• US Oct Michigan 5-Year Inflation Expectations 2.20%, 2.40%                previous               

• US Oct Michigan Consumer Expectations 84.8, 81.7 forecast, 83.4 previous

• US Oct Michigan Consumer Sentiment 96.0, 92.0 forecast, 93.2 previous                                                                         Looking Ahead - Economic Data (GMT)

 No economic data

Looking Ahead - Events, Other Releases (GMT)

No significant events

Currency Summaries

EUR/USD: The euro strengthened against the U.S. dollar on Friday, as weaker dollar and improved on hopes of progress in trade negotiations between the United States and China boosted euro. Trump and China’s top trade negotiator, Vice Premier Liu He, are scheduled to meet later on Friday.A Chinese newspaper said on Friday a “partial” trade deal would benefit China and the United States, reflecting Beijing’s aim of cooling the row before more U.S. tariffs kick in.The euro was down 0.01 percent at $1.0972. Immediate resistance can be seen at 1.0987 (21 DMA), an upside break can trigger rise towards 1.1049 (50 DMA).On the downside, immediate support is seen at 1.0940 (Oct 8th low), a break below could take the pair towards 1.2900 (Psychological level).

GBP/USD: The British pound rose against dollar on Friday, as investors rushed to price in the prospect of a last-minute Brexit deal between the European Union and Britain. The pound has rallied more than 3% since Thursday, its biggest two-day gain since mid-June 2016, before the British public voted to leave the EU. The pound rose nearly 2% to a three-month high at $1.2685.Versus the euro, the pound strengthened as much as 1.4% to 87.20 pence.. Immediate resistance can be seen at 1.2275 (5 DMA), an upside break can trigger rise towards 1.2365 (21 DMA).On the downside, immediate support is seen at 1.2195 (Daily low), a break below could take the pair towards 1.2154 (Lower BB).

USD/CAD: The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Friday after domestic data showing a much bigger-than-expected jobs gain in September supported bets for the Bank of Canada to keep interest rates on hold this month. The Canadian economy added 53,700 jobs in September, the second straight month of robust jobs gains, Statistics Canada data showed. Analysts had forecast a gain of 10,000 jobs. Chances of a Bank of Canada interest rate cut at the October 30 policy decision dipped to 7% from 9% before the data, the overnight index swaps market indicated. At (2020GMT), the Canadian dollar was trading 0.7% higher at 1.3204 to the greenback. Immediate resistance can be seen at 1.3347 (Oct High), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3287 (11 DMA), a break below could take the pair towards 1.3243 (100 DMA).

USD/JPY: The U.S. dollar strengthened against the yen on Friday, as revived hopes the U.S.-Chinese trade deal increased demand for risk appitite. The improved appetite for riskier assets carried from Thursday and improved after U.S. President Donald Trump said “good things” were happening during high-level China-U.S. trade talks and spoke of warmer feelings.His comments and plans to meet China’s Vice Premier Liu He on Friday at the White House fed hopes that the two sides could dial down a trade war that has upset global supply chains. Strong resistance can be seen at 107.64 (21 DMA), an upside break can trigger rise towards 108.00 (Psychological level).On the downside, immediate support is seen at 106.90 (50 DMA), a break below could take the pair towards 106.55 (Lower BB).

Equities Recap

European shares were on a tear on Friday as a surprise breakthrough in Brexit negotiations drove UK-focused London-listed companies and the Irish index about 4% higher, while German shares logged their best day in nine months.

The UK's benchmark FTSE 100 closed up by 0.84 percent, Germany's Dax ended up by 2.86 percent, and France’s CAC finished the up by 1.73 percent.

U.S. stocks rose sharply on Friday as hopes grew that the talks between President Donald Trump and Chinese Vice Premier Liu He would culminate in a partial trade deal and delay planned U.S. tariff increases.

Dow Jones closed up by 1.21 percent, S&P 500 ended up 1.05 percent, Nasdaq finished the day up  by 1.34 percent.

Treasuries Recap

 U.S. Treasury yields were higher on Friday morning in step with the equity market as hopes rose for amicable resolutions to the U.S.-China trade war and Britain’s exit from the European Union.

The two-year Treasury yield, which is a proxy for market expectations of moves in Fed interest rate policy, rose 8.8 basis points to 1.618%. The benchmark 10-year yield was up 9.4 basis points to 1.750%.

Commodities Recap

Gold prices fell 1% on Friday, on track for a weekly loss, as optimism around the U.S.-China trade talks and the possibility of a Brexit deal diminished some save-haven interest in bullion, while palladium scaled a new record peak.

Spot gold fell 0.6% to $1,485.53 per ounce at 1323 GMT, after touching their lowest in over week at $1,479.31, heading towards a weekly decline of about 1%. U.S. gold futures slid 0.7% to $1,490.20.

Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the U.S.-China trade war lifted sentiment.

Brent crude futures  gained $1.41, or 2.4%, to settle at $60.51 a barrel.West Texas Intermediate (WTI) crude  futures rose $1.15, or 2.2%, to settle at $54.70 a barrel

By Srikanth G
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