Market Roundup
• Trump ups ante on China, threatens duties on $267 bln more imports
• Trump open to Russia probe interview 'under certain circumstances'
• Canada sees increasing chance NAFTA deal can be struck this month -source
• US Aug Non-Farm Payrolls, 210K, 157K previous, 191K forecast, 147K revised
• US Aug Private Payrolls, 204K, 170K previous, 190K forecast, 153K revised
• US Aug Unemployment Rate, 3.9%, 3.9% previous, 3.8% forecast
• US Aug Average Earnings m/m, 0.4%, 0.3% previous, 0.2% forecast
• US Aug Average Earnings Y/Y, 2.9%, 2.7% previous, 2.7% forecast
• CA Aug Employment change, -51.6K, 54.1K previous, 50.0K forecast
• CA Aug Unemployment Rate, 6.0%, 5.8% previous, 5.9% forecast
• CA Aug Full Time Employment Change, 40.4K, -28.0K previous
• CA Aug Part Time Emploment Change, -92.0K, 82.0K previous
• CA Aug Participation Rate, 65.30%, 65.40% previous
• Argentina central bank chief says financing assured in 2019, peso rises
Looking Ahead - Economic Data (GMT)
• 8 Sep N/A China Aug Exports y/y, 12.2% previous, 10.1% forecast
• 8 Sep N/A China Aug Imports y/y, 27.3% previous, 18.7% forecast
• 8 Sep N/A China Aug Trade Balance USD, 28.05B, 31.79B forecast
• 9 Sep 22:45 New Zealand Q2 Manufacturing Sales, 1.4% previous
• 9 Sep 23:50 Japan Aug Bank Lending y/y, 2.0% previous
• 9 Sep 23:50 Japan Jul Current Account Balance JPY, 1,175.6B previous, 1,852.0B forecast
• 9 Sep 23:50 Japan Q2 GDP Rev q/q Annualised, 1.9% previous, 2.6% forecast
• 9 Sep 23:50 Japan Q2 GDP Revised q/q, 0.5% previous, 0.7% forecast
• 9 Sep 23:50 Japan Q2 GDP Cap Ex Rev q/q, 1.3% previous, 2.8% forecast
• 9 Sep 23:50 Japan Q2 GDP Pvt Consumption q/q, 0.7% previous
• 10 Sep 01:30 China Aug Producer Price Index y/y, 4.6% previous, 4.0% forecast
• 10 Sep 01:30 China Aug Consumer Price Index y/y, 2.1% previous, 2.2% forecast
• 10 Sep 01:30 China Aug CPI m/m, 0.3% previous, 0.5% forecast
• 10 Sep 05:00 Japan Aug Economy Watchers poll, 46.6 previous
Looking Ahead - Events, Other Releases (GMT)
• Sep 8 10:30 EU Finance Ministers hold news conference in Vienna.
• Sep 8 14:45 Boston Fed's President Eric Rosengren discusses the paper titled,"Some Unpleasant Stabilization Arithmetic," in Boston.
• Sep 10 16:00 Fed's Atlanta President Raphael Bostic speaks before the Albany Chamber of Commerce in Albany, Georgia.
Currency Summaries
EUR/USD is likely to find support at 1.1516 levels and currently trading at 1.1559 levels. The pair has made session high at 1.1592 and hit lows at 1.1548 levels. The euro declined against the dollar on Friday as dollar rose after data showed U.S. job growth surged in August, but investor concerns about a possible escalation of the U.S.-Chinese trade conflict held gains in check. Nonfarm payrolls surged by 201,000 jobs last month. Average hourly earnings increased 0.4 percent in August, resulting in an annual increase 2.9 percent, the largest since June 2009. U.S. job growth accelerated in August and wages notched their largest annual increase in more than nine years, the clearest signs that the economy was so far weathering the Trump administration's escalating trade war with China. The Labor Department's closely watched employment report published on Friday also showed slack in the jobs market was rapidly diminishing, with a broader measure of unemployment falling to a level not seen since 2001. The report cemented expectations for a third interest rate increase from the Federal Reserve this year when policymakers meet on Sept. 25-26. The dollar was boosted by U.S. job growth data but uncertainty over the U.S.-Chinese trade conflict held gains in check.
GBP/USD is supported in the range of 1.2841 levels and currently trading at 1.2922 levels. It reached session high at 1.3028 and dropped to session low at 1.2906 levels. Sterling initially rose against the dollar on Friday after European Union negotiator Michel Barnier said the EU was open to discussing other "backstops" on the Brexit issue, but reversed course after dollar was boosted by U.S. job growth data. The EU has made a so-called "backstop" proposal to guarantee an open UK-EU land border in Ireland a condition for any divorce deal before Britain leaves the bloc on March 29, 2019. Both sides are under increasing pressure to overcome the outstanding issues. In testimony to British lawmakers dated Sept. 3, Barnier said a backstop on Ireland was crucial but added that the EU remained open to finding other solutions. The British currency jumped as much 0.7 percent against the dollar to $1.3027 before reversing course. U.S. job growth accelerated in August and wages notched their biggest annual increase in more than nine years, sending the dollar to a two-week high against a basket of its rivals and cutting into sterling's gains. By late US session, sterling trimmed gains to be trading down 0.06 percent at 1.2919. The British currency has had a volatile week as headlines on the progress of Brexit negotiations forced traders to switch positions rapidly in a currency market that is broadly short on the pound based on positioning data.
USD/CAD is supported at 1.3100 levels and is trading at 1.3179 levels. It has made session high at 1.3189 and lows at 1.3107 levels. The Canadian dollar weakened against its U.S. counterpart on Friday, pressured by domestic data showing that the economy unexpectedly shed jobs in August. Canada's economy lost 51,600 jobs in August after two months of gains, with losses in part-time work overtaking gains in full-time employment, Statistics Canada said. Analysts surveyed had expected the economy to add 5,000 jobs. Chances of a Bank of Canada interest rate hike in October were little changed following the release of the data, at about 60 percent, the overnight index swaps market indicated. On Thursday, the loonie got a boost after Bank of Canada Senior Deputy Governor Carolyn Wilkins said in a speech that the central bank had discussed dropping its gradual approach to raising rates. U.S. and Canadian negotiators pushed ahead in talks to rescue the North American Free Trade Agreement on Thursday, but a few stubborn issues stood in the way of a deal. These included dairy quotas, protection for Canadian media companies, and how to resolve future trade disputes. The Canadian dollar was trading 0.2 percent lower at C$1.3170 to the greenback. The currency traded in a range of C$1.3105 to C$1.3189.
USD/JPY is supported around 110.31 levels and currently trading at 110.96 levels. It peaked to hit session high at 111.24 and made session lows at 110.71 levels. The dollar strengthened against the Japanese yen on Friday after strong U.S. jobs data cemented expectations for the Federal Reserve to increase interest rates further. U.S. job growth accelerated in August, with wages notching up their largest annual increase in nine years, strengthening views the economy was so far weathering the Trump administration's escalating trade war with China. Average hourly earnings increased 0.4 percent or 10 cents in August. That raised the annual increase in wages to 2.9 percent in August, the largest gain since June 2009.Nonfarm payrolls surged by 201,000 jobs last month, boosted by hiring at construction sites, wholesalers and professional and business services, the Labor Department said. The greenback has soared this year on escalating U.S.-Sino trade tensions, though it has lost some steam this week to rival safe haven currencies like the yen and Swiss franc even as investors brace for new U.S. tariffs on China. Interest rate futures traders are fully pricing in a rate increase at this month’s Federal Reserve meeting, according to the CME Group’s FedWatch Tool. The odds of an additional hike in December, which would be the fourth this year, rose to 79 percent, from 67 percent before the jobs data. The dollar was last trading 0.29 percent at 110.96 against the Japanese yen.
Equities Recap
European shares steadied on Friday but suffered their worst week since end March as uncertainty over global trade rippled through markets and investors dumped riskier sectors.
UK's benchmark FTSE 100 closed down by 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended flat, France’s CAC finished the day up by 0.1 percent.
Wall Street's major indexes moved lower on Friday after U.S. President Donald Trump said he had tariffs ready to impose on an additional $267 billion worth of Chinese imports, though stocks pared losses late in the afternoon.
Dow Jones closed down by 0.77 percent, S&P 500 ended down by 0.71 percent, Nasdaq finished the day down by 0.67 percent.
Treasuries Recap
U.S. benchmark Treasury yields rose on Friday to their highest levels in almost a month after the largest annual increase in wages since 2009 raised expectations of higher inflation.
U.S. benchmark 10-year Treasury notes fell 18/32 in price to yield 2.941 percent, up from 2.877 percent on Thursday.
Commodities Recap
Gold fell on Friday as the dollar resumed its rally versus a currency basket after stronger-than-expected payrolls data cemented expectations that the Federal Reserve will raise interest rates in September, in what would be its third hike this year.
Spot gold fell 0.4 percent at $1,195.48 an ounce by 2:49 p.m. EDT (1849 GMT), and was on track to close the week down 0.5 percent. U.S. gold futures settled down 0.3 percent at $1,200.40 an ounce.
Oil prices were little changed on Friday, with U.S. crude slightly lower on weak equity markets while Brent inched up on geopolitical factors, such as violent protests in Iraq.
U.S. West Texas Intermediate (WTI) crude futures settled down 2 cents at $67.75 per barrel. Brent crude futures settled up 33 cents at $76.83 a barrel. For the week, WTI lost almost 3 percent, while Brent was down 0.8 percent.
