Market Roundup
• US GDP advance Q1 0.7% v 1.2% forecast, 2.1% previous, Core PCE 2% v 2% forecast, 1.3% previous.
• US Employment costs 0.8% v 0.6% forecast, 0.5% previous.
• US Chicago PMI 58.3 v 56.4 forecast, 57.7 previous.
• University of Michigan sentiment final 97 v 98 forecast, 98 previous.
• University of Michigan expectations final 97 v 98 forecast, 86.9 previous.
• University of Michigan 1-yr inflation final 2.5% v 2.5% previous, 5-yt 2.4% v 2.4% previous.
• Canada GDP m/m 0% v 0% forecast 0.6% previous.
• Eurozone Inflation surge to keep the pressure on ECB to cut stimulus, Core inflation jumped to 3-yr high, household lending at its highest since the crisis.
• US House approves bill to avert government shutdown, reprieve until May 5.
• S&P: could lower UK rating if GDP per capita or public finances weaken markedly; forecast Avg GDP growth of 1.4% in ’17-20 vs 2.1% pre-Brexit.
• UK government: Scottish Brexit proposal could disrupt trade, Scottish minister: UK government not taking us seriously –letter.
• British economy slows sharply as inflation hits home, Q1 GDP +0.3 percent q/q vs Q4 +0.7 pct, weakest in a year.
• Sterling hits 7-month high, posts best month since Brexit.
• US says "major conflict" with N. Korea possible, China warns of escalation.
• US. economic growth slower than France, 'terrible' -BlackRock's Fink - Reuters News.
Looking Ahead - Economic Data (GMT)
• 01:00 (Sun) China NBS Non-Mfg PMI* Apr 55.10-previous
• 01:00 (Sun) China NBS Manufacturing PMI Apr forecast 51.6, 51.80- previous
• 23:30 Australia AIG Manufacturing Index Apr 57.50- previous
• 00:30 Japan Nikkei Mfg PMI Apr 52.80- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0839 levels and currently trading at 1.0894levels. The pair has made session high at 1.0921 and hit lows at 1.0882 levels. The euro initially rose against the dollar on Friday as the dollar retreated after downbeat US GDP data but gave up ground after traders booked profits and avoided making big bets on euro ahead of long holiday weekend. The U.S. economy grew at its weakest pace in three years in the first quarter as consumer spending almost stalled, but a surge in business investment and wage growth suggested activity would regain momentum as the year progresses. Gross domestic product increased at a 0.7 percent annual rate also as the government further cut defence spending and businesses spent less on inventories, the Commerce Department said on Friday in its advance estimate. That was the weakest performance since the first quarter of 2014. In a separate report on Friday, the Labor Department said wages jumped 0.9 percent in the first quarter, the largest increase in 10 years, after rising 0.5 percent in the fourth quarter. The euro initially reached as high as $1.0921, before retreating to trade at $1.0892 in the late US session. The dollar index, which measures the greenback against a basket of six major rivals, was last mostly flat at 99.102.
GBP/USD is supported in the range of 1.2860 levels and currently trading at 1.2949 levels. It reached session high at 1.2964 and dropped to session low at 1.2901 levels. Sterling rose against the dollar to hit its highest against the dollar since late September on Friday, brushing off data showing a sharp slowdown in UK economic growth as traders closed off heavy bets against the pound ahead of a long Bank Holiday weekend. Numbers from the Office for National Statistics showed Britain's economy slowed to a one-year low in the first three months of 2017, as higher inflation - in large part caused by sterling weakness following last year's Brexit vote hurt retailers and other consumer-focused businesses. On the last trading day of April, the pound was up almost 3 percent versus the dollar on the month, its best performance since March 2016, before the vote for Brexit. Analysts have noted a trend of sterling appreciation in April, largely put down to a heavy month of dividend payments by British companies and the end of the UK tax year. The pound is now down less than 14 percent against the dollar since last June's referendum on European Union membership, having fallen as much as 23.5 percent to a 31-year low of $1.1491 in October.
USD/CAD is supported at 1.3610 levels and is trading at 1.3654 levels. It has made session high at 1.3696 and lows at 1.3630 levels. The Canadian dollar declined against its U.S. counterpart on Friday as Canadian dollar was weighed down by down beat Canadian GDP data, offsetting a rebound in oil prices. The Canadian economy stalled in February after robust growth in January as gains in service-producing industries were offset by declines in the goods sector, Statistics Canada said on Friday. Gross domestic product was flat, matching the forecast by analysts in a poll. Oil prices advanced after a slide to a one-month low the previous day spurred buying ahead of an OPEC meeting next month at which producers could prolong output curbs. Both Brent and U.S. crude were on track for their second straight weekly and monthly declines. The Canadian dollar was last trading at C$1.3653 to the greenback, or 73.24 U.S. cents, weaker than Thursday's close of C$1.3624, or 73.40 U.S. cents.
AUD/USD is supported around 0.7435 levels and currently trading at 0.7487 levels. It hit session high at 0.7489 and made session lows at 0.7446 levels. The Australian dollars stood near multi-month lows on Friday as investors remained jittery about U.S. President Donald Trump's trade policies. The U.S. Commerce Department launched an investigation on Wednesday to determine whether a flood of aluminium imports from China and elsewhere was compromising U.S. national security, a step that could lead to broad import restrictions on the metal. Commodity-led currencies, such as the Australian dollar, could be badly hit by any measures in global trade deemed protectionist. The Australian dollar, seen as a liquid proxy for the Chinese yuan, stood at $0.7487, after earlier falling to $0.7440, the lowest since Jan.12. The Aussie is set to end the month down 2 percent to record its worst monthly performance since December 2016.
Equities Recap
European shares eased on Friday as investors took profits, but sealed their strongest week since December as political worries subsided and brokers forecast strong earnings growth would underpin valuations.
The UK's benchmark FTSE 100 closed down by 0.3 percent, FTSEurofirst 300 ended the day down by 0.12 percent, Germany's Dax ended up 0.1, and France’s CAC finished the day up by 0.1 percent.
U.S. stocks were slightly lower on Friday after data showed the economy grew at its weakest pace in three years in the first quarter.
Dow Jones closes down 0.20 percent, S&P 500 ended down 0.19 percent, Nasdaq finished the day down by 0.03 percent.
Treasuries Recap
U.S. Treasury prices ended higher on Friday on last-minute month-end buying, reversing losses fueled by data showing steady growth in U.S. inflation and wages despite soft economic growth in the first quarter.
In late trading, benchmark 10-year U.S. Treasury notes were up 3/32 in price to yield 2.285 percent, down from 2.296 percent late on Thursday. Yields earlier hit session highs of 2.338 percent in the wake of the U.S. GDP data.
U.S. 30-year bond prices rose 6/32, yielding 2.954 percent, down from Thursday's 2.965 percent.
On the front end, U.S. two-year yields were at 1.269 percent, up from Thursday's 1.258 percent.
Commodities Recap
Gold rose on Friday as forecast-beating euro zone inflation data boosted the euro versus the dollar, while global stock markets retreated from Wednesday's record highs on concerns about global trade.
Spot gold was up 0.3 percent at $1,266.9 an ounce by 2:42 p.m. EDT (1842 GMT), on track to close April up 1.5 percent. U.S. gold futures for June delivery settled up 0.2 percent at $1,268.30.
Oil prices were little changed on Friday in a see-saw session, retreating from session highs and headed for weekly declines on lingering questions about whether OPEC will extend output cuts at its May meeting and whether it will reduce a global crude glut enough to boost prices.
U.S. light crude rose 19 cents to $49.16 a barrel as of 1:08 p.m. EDT (1708 GMT), off the day's high of $49.76. Benchmark Brent crude futures were up 16 cents to $51.60 a barrel. Both benchmarks were headed for weekly and monthly losses.
U.S. light crude rose 18 cents to $49.15 a barrel at 4:03 p.m. EDT (1903 GMT), off the day's high of $49.76.
Benchmark Brent crude futures settled up 27 cents to $51.71 a barrel. Both benchmarks were headed for weekly and monthly losses.
