Market Roundup
- U.S. Jan CPI unchanged at-0.1, Core m/m +0.3 vs 0.2 forecast larges rise since '11.
- US real weekly earnings +0.7 vs 0.1% previous.
- Canada Dec retail sales tumble more than expected, down 2.2 percent, ex-autos -1.6%.
- France's Hollande: hopes for Brexit deal but not at any cost.
- British Justice Sec Gove, ally of Cameron, to campaign for Brexit.
- ECB's Constancio: may 'decide to act' if inflation recovery delayed, inflation would have been negative last year if not for ECB measures, recovery is ongoing.
- Fed's Mester: still expects gradual tightening of interest, upbeat on inflation, path of tightening.
- ECB's Visco: risk of second round effects materializing, if need have plenty of instruments available, can create new ones.
- IMF re-elects Lagarde to second five-year term as chief.
- Stocks lower as oil rally falters, yen gains as risk assets fall; Cable rallies on EU deal talk, RS beat.
- Brazil's Tombini: Brazil cannot consider interest rate cuts.
Looking Ahead - Economic Data (GMT)
- 02:00 Japan Nikkei Mfg PMI Flash Feb 52.3-previous
Looking Ahead - Events, Other Releases (GMT)
- Sun 22:10 Australia RBA Asst Gov (Financial System) Guy Debelle speaks at the Kanga News DCM Summit
Currency Summary
EUR/USD is likely to find support at 1.1200 levels and currently trading at 1.1280 levels. The pair has made session high at 1.1138 and hit lows at 1.1078 levels. Dollar declined against the euro on Friday after yet another downbeat session for oil prices and stock markets worldwide increased worries about global growth. The euro rose against the dollar, trading up 0.2 percent at $1.1018. However, it still posted its worst weekly loss against the dollar since the third week of November. ECB Vice President Vitor Constancio said, that the central bank had not yet committed to any decision for its next meeting on March 10 but might act there is a recovery in inflation. The euro rose against the dollar, trading up 0.2 percent at $1.1018. However, it still posted its worst weekly loss against the dollar since the third week of November.
GBP/USD is supported in the range of 1.4225 and currently trading at 1.4372 levels. It reached session high at 1.4388 and hit low at 1.4244 levels. British pound rose against dollar on Friday after France's President Francois Hollande said that he hoped that EU leaders would reach a deal to help Britain stay in the Eurozone a summit in Brussels. The summit dragged on more than the scheduled time on Friday as British Prime Minister David Cameron struggled clinch a deal. British voters in a referendum promised by the end of 2017 but that is likely to come in June. The pound had slipped steadily throughout the day as the summit dragged on, falling to as low as $1.4247. But it bounced to $1.4373 after the comments from Hollande, which followed an EU official saying there was a "good chance" a deal would be reached by the end of the day that left sterling up 0.2 percent on the day against the greenback, but over 1 percent down for the week - its weakest performance since mid-January.
USD/CAD is supported at 1.3630 levels and is trading at 1.3765 levels. It has made session high at 1.3846 and lows at 1.3763 levels. The Canadian dollar weakened against US dollar on Friday as crude oil prices tumbled and domestic data showed a sharp drop in retail sales. A sell-off in global stocks added to pressure on commodity-linked currencies including the Canadian dollar as worries about the global economic outlook returned to the forefront. On the data front, Canadian retail sales fell 2.2 percent in December after rising 1.7 percent in November as unseasonably warm weather cut into seasonal purchases. It was the largest such decline since April 2010 and far exceeded the 0.6 percent drop predicted by analysts. The currency's strongest level of the session was C$1.3715, while its weakest level was C$1.3846.
AUD/USD is supported around 0.7070 levels and currently trading at 0.7145 levels. It hit session high at 0.7154 and made session lows at 0.7148 levels. The Australian dollar declined against its US peer on Friday as concerns about global growth sent investors towards safe heaven assets and government bonds, but the currencies were still on track for sharp weekly gains against the euro and pound. The Aussie was dragged lower by renewed appetite for the yen following a pause in an oil rally. The Aussie dropped 0.8 percent on the day to 80.37 yen, having erased all this week's gains. It was poised to end the week where it started and still well above a seven-year trough of $0.6828 last month. Support was found around $0.7080.
Equities Recap
European shares turned lower on Friday, hit by a drop in bank, oil and auto shares, as investors locked in gains following a strong week that has helped to stabilise markets after a tumultuous start to the year.
UK's benchmark FTSE 100 closed up by 2.71 percent, the pan-European FTSEurofirst 300 ended the day up by 2.58 percent, Germany's Dax closed up at 2.68 percent, and France's CAC finished the day up by 2.93 percent.
Wall Street dipped on Friday, hurt by a renewed drop in oil prices and disappointing earnings from Nordstrom, but the major indexes still posted their best weeks of the year.
Dow Jones closed up by 1.57 percent, S&P 500 ended the day up by 1.63 percent, Nasdaq finished the day up by 2.19 percent.
Treasuries Recap
Yields on shorter-dated U.S. Treasury debt rose on Friday as a stronger-than-expected report on consumer prices in January kindled bets the Federal Reserve may raise interest rates swifter than some traders had anticipated.
Two-year Treasury notes, which are the most sensitive to traders' view on Fed policy, fell 2/32 in price to yield 0.746 percent, up over 3 basis points from Thursday.
U.S. benchmark 10-year Treasury notes were up 3/32 in price to yield 1.748 percent, down 1 basis point from Thursday and little changed on the week.
Commodities recap
Gold eased on Friday as investors cashed in some of the previous day's 2 percent gains, though expectations that rock-bottom interest rates would persist served to keep prices above $1,225 an ounce.
Spot gold was down 0.04 percent at $1,231.43 an ounce at 2:40 p.m. EST (1940 GMT), and was on track to finish the week down 0.5 percent, its first week down in five weeks.
U.S. gold futures for April delivery settled up 0.4 percent to $1,230. prices fell 4 percent on Friday, with Brent down a third straight week, as record high U.S. crude stockpiles intensified worries that a plan to freeze world output will do little or nothing to reduce massive oil supplies already in the market.
Brent crude settled $1.27, or 3.7 percent, lower at $33.01 a barrel.U.S. crude lost $1.13, also finishing 3.7 percent lower at $29.64.
