Market Roundup
• IMF likely to contribute up to EUR 5bn to Greek bailout –Spiegel.
• Euro zone investment inflows surge in December- ECB.
• China central bank says to tighten oversight of company debt, bank assets.
• Yen rises as political worries stoke safe-haven bids, Lack details on Trump's economic plan weighs on dollar.
• Sterling drops on weak UK retail sales under Brexit shadow.
• Oil prices drop as oversupply concerns overshadow OPEC cuts.
• Bonds gain on falling stocks, French election worries.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand PPI Inputs QQ* Q4 1.50%-previous
• 21:45 New Zealand PPI Output* Q4 1.00%-previous
• 23:50 J am Exports YY* Jan forecast 4.7%, 5.40%-previous
• 23:50 JP Imports YY* Jan f/c 4.7%, -2.60%-previous
• 23:50 JP Trade Bal Total Yen* Jan f/c -636.8b, 641.4b-previous
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Looking Ahead - Events, Other Releases (GMT)
• 01:15 US Cleveland Fed President Loretta Mester will speak on "View From the Federal Reserve" before the Global Interdependence Center "Central Bank Series: Singapore" event.
Currency Summaries
EUR/USD is likely to find support at 1.0559 levels and currently trading at 1.0611 levels. The pair has made session high at 1.0666 and hit lows at 1.0603 levels. The euro declined against the U.S. dollar on Friday as concerns about the upcoming French elections weighted on euro. News the French left could unite behind one candidate in presidential elections, possibly knocking centrist and right-leaning nominees out of the race in the first round, raised a new scenario for a second-round runoff. This possible alliance could increase the chances of anti-EU, anti-immigrant Marine Le Pen winning the presidency. In the wake of this political development, the euro fell 0.5 percent against the dollar at $1.0623, holding above a five-week low of $1.0520 struck on Wednesday. The euro's weakness helped stabilize the dollar as traders had pared bullish bets on the greenback earlier this week on reduced expectations the Federal Reserve will raise interest rates at its March 14-15 policy meeting. The Federal Reserve will release minutes from its January meeting next Wednesday, which will be evaluated for any new signals on when a rate hike is next likely.
GBP/USD is supported in the range of 1.2384 levels and currently trading at 1.2420 levels. It reached session high at 1.2451 and dropped to session low at 1.2408 levels. Sterling declined against the U.S. dollar on Friday after a surprise third monthly fall running in British retail sales pointed to weakening consumer sentiment as the government gets ready to launch talks on leaving the European Union. Official data on Friday showed retail sales volumes fell by 0.3 percent month-on-month in January, much weaker than economists' forecasts for a 0.9 percent increase. Consumers were barely fazed last year by June's decision to leave the European Union. But they are turning more cautious with prices rising quickly in response to the post-referendum slump in the value of the pound and higher oil price. Sterling hit its lowest in 10 days against the euro, down almost 0.5 percent on the day at 85.82 pence. It fell to a one-week low of $1.2388, down almost 1 percent on the day, before recovering to $1.2418 in the London afternoon.
USD/CAD is supported at 1.3030 levels and is trading at 1.3098 levels. It has made session high at 1.3127 and lows at 1.3077 levels. The Canadian dollar weakened against its U.S. counterpart on Friday as oil dipped and dollar recovered some ground as signs of strength in the U.S. economy and bets on lower corporate taxes under President Donald Trump have lifted dollar. Prices of oil, one of Canada's major exports, were pressured by growing global stocks. U.S. crude prices were down 0.49 percent at $53.10 a barrel. The dollar also rose following mildly hawkish view from Federal Reserve Chair Janet Yellen and surprising strong U.S. data on retail sales and consumer prices. The Canadian dollar was trading at C$1.3090 to the greenback, or 76.44 U.S. cents, slightly weaker than Thursday's close of C$1.3080, or 76.45 U.S. cents.
AUD/USD is supported around 0.7615 levels and currently trading at 0.7668 levels. It hit session high at 0.7680 and made session lows at 0.7654 levels. The Australian dollar declined slightly against US dollar on Friday after greenback recovered some ground as disquiet about the policies of U.S. President Donald Trump cooled. The Australian dollar was last trading at $0.7669 after briefly popping up to $0.7732 on Thursday, a level not seen since Nov.10. It quickly fizzled to as low as $0.7654 in early dealing before inching back towards 0.7669 U.S. cents. The Aussie is set to end the week slightly higher, having traded in a sideways direction since the beginning of February. Still, the currency is already up nearly 7 percent this year, led largely by expectations of faster inflation in the United States and globally. The price of Australia's biggest earning export iron ore has also soared in recent months, boosting terms of trade and in turn the country's national income.
Equities Recap
European shares posted their second week of gains on Friday with personal and household goods stocks led by a leap in Unilever's ULVR.L shares after a takeover bid, though banking and resources stocks saw a pull-back.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.06 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.8 percent.
The Dow Jones Industrial Average barely reached a seventh straight record high on Friday and the S&P 500 and Nasdaq also closed at a record as gains in Kraft Heinz helped offset selling in energy stocks.
Dow Jones closed up by 0.01 percent, S&P 500 ended up 0.15 percent, Nasdaq finished the day up by 0.38 percent.
Treasuries Recap
U.S. Treasury prices gained on Friday as concerns over the French election and weak data in Britain added to risk aversion, hurting stock markets and boosting demand for safe haven U.S. debt.
Benchmark 10-year notes were last up 12/32 in price to yield 2.41 percent, down from 2.45 percent late on Thursday, and the lowest since Feb. 10.
Commodities Recap
Gold crept higher on Friday as investors opted for the safe haven qualities of bullion due to uncertainty about U.S. and European politics as well as the direction of stock markets.
Spot gold was 0.14 percent lower at $1,237 per ounce by 2:44 p.m. EST (1944 GMT), while U.S. gold futures ended the session down 0.2 percent at $1,239.10.
Oil prices ended steady on Friday but lower on the week, with U.S. crude notching its first weekly decline in five weeks, as the market weighed rising U.S. drilling and record stockpiles against efforts by major producers to cut output to reduce a global glut.
Brent futures settled 16 cents, or 0.3 percent, firmer at $55.81 a barrel, while U.S. West Texas Intermediate (WTI) crude settled up 4 cents at $53.40 a barrel.
