Market Roundup
•Focus on U.S. inflation data due at 1230 GMT
•UK Jul Trade Balance Non-EU -2.36B , 0.30B previous
•UK Jul Industrial Production (MoM) 5.2%,4.0% forecast, 9.3% previous
•UK GDP (MoM) 6.6%,6.7% forecast, 8.7% previous
•UK Index of Services-8.1%,-19.9% previous
•UK Monthly GDP 3M/3M Change-7.6% , -7.5% forecast, -20.4% previous
•German Aug WPI (MoM) -0.4% , 0.5% previous
•UK Jul Trade Balance -8.64B, -6.90B forecast, -5.12B previous
•U.K. Construction Output (YoY ) -12.7% , -16.4% forecast, -24.8% previous
•U.K. Construction Output (MoM) 17.6%,10.5% forecast, 23.5% previous
•U.K. Jul Manufacturing Production (MoM) 6.3%,5.0% forecast, 11.0% previous
•German Aug CPI (MoM) -0.1%,-0.1% forecast, -0.5% previous
•U.K. Jul Manufacturing Production (YoY) -9.4%,-10.5% forecast, 14.6% previous
•German Aug HICP (MoM) -0.2%,-0.2% forecast, -0.5% previous
•German Aug CPI (YoY) 0.0%,0.0% forecast, 0.1% previous
•German Aug HICP (YoY) -0.1%, -0.1% forecast, 0.0% previous
•Italian Quarterly Unemployment Rate 8.3%,8.9% previous
Looking Ahead - Economic Data (GMT)
•US Aug Real Earnings (MoM) -0.6% previous
•US Aug CPI Index, s.a 258.72 previous
•US Aug CPI, n.s.a (MoM ) 259.52 forecast, 259.10 previous
•US Aug Core CPI (MoM) 0.2% forecast, 0.6% previous
•US Aug CPI (MoM) 0.3% forecast, 0.6% previous
•US Aug Core CPI (YoY) 1.6% forecast, 1.6% previous
•Canada Capacity Utilization Rate (Q2) 70.2%,79.8% previous
•Russia Jul Trade Balance 5.50B, 5.29B previous
•UK NIESR GDP Estimate-6.3% forecast, -7.9% previous
•US Aug Cleveland CPI (MoM) 0.3% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Fx Beat
EUR/USD: The euro rose on Friday as traders noted European Central Bank policymakers’ calm approach to the euro’s recent appreciation. After a press conference on Thursday at which ECB President Christine Lagarde said the bank did not target the exchange rate, sources said policymakers had agreed to look through the euro’s rise, judging it was broadly in line with economic fundamentals. Any advance higher in the euro may be curtailed, however, by ECB chief economist Philip Lane’s warning on Friday that a strong euro will further dampen price pressures. The euro was last trading up 0.4% at $1.1863 , though it had reached $1.1917 the day before, an eight-day high. Immediate resistance can be seen at 1.1892 (61.8% fib), an upside break can trigger rise towards 1.1935 (Higher BB).On the downside, immediate support is seen at 1.1814 (50%fib), a break below could take the pair towards 1.1751 (50%fib ).
GBP/USD: The pound rose against the dollar on Friday, bobbing above the $1.28 mark after a week in which new Brexit friction between Britain and the European Union put the currency on track for its worst week since March’s coronavirus-led market selloff. Brexit has returned to dog the pound this week as Britain introduced new draft legislation that it acknowledged would be inconsistent with international law, angering the EU.Investors fear this may derail trade talks with the bloc before an Oct. 15 deadline set by Britain, for reaching a trade deal with the EU. By 12:00 GMT, sterling traded 0.2% higher to the dollar, stabilizing above the $1.28 mark at $1.2825, but still on track for a 3% loss this week. Immediate resistance can be seen at 1.2877(38.2%fib), an upside break can trigger rise towards 1.2947( 5DMA).On the downside, immediate support is seen at 1.2747(23.6% fib), a break below could take the pair towards 1.2700 (Psychological level).
USD/CHF: The dollar declined against the Swiss franc on Friday as greenback weakened after data showed U.S. weekly jobless claims flattened. The number of Americans filing new claims for unemployment benefits hovered at high levels last week, suggesting the labor market recovery from the COVID-19 pandemic was stalling. The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy’s health, followed news last Friday of a further slowdown in employment growth in August and an increase in permanent job losses. Immediate resistance can be seen at 0.9120 (23.6%fib), an upside break can trigger rise towards 0.9174 (Higher BB).On the downside, immediate support is seen at 0.9051 (Sep 10th low), a break below could take the pair towards 0.9022 (Lower BB).
USD/JPY: The dollar was little changed against the Japanese yen on Friday as doubts about extra monetary stimulus and overnight falls in U.S. big tech shares kept investors on edge. In other political wrangling, the U.S. Senate on Thursday killed a Republican bill that would have provided around $300 billion in new coronavirus aid, as Democrats seeking far more funding prevented it from advancing. That followed European Central Bank President Christine Lagarde earlier in the day appearing to rule out measures to weaken the euro. Strong resistance can be seen at 106.26 (Daily high), an upside break can trigger rise towards 106.83 (50%fib).On the downside, immediate support is seen at 106.05 (21DMA), a break below could take the pair towards 105.54 (38.2%fib).
Equities Recap
European shares turned flat after opening marginally lower on Friday, a day after the European Central Bank took a less dovish tone than expected on stimulus, while growing prospects of a no-deal Brexit kept risk sentiment subdued.
At (GMT 12:30),UK's benchmark FTSE 100 was last trading up at 0.34 percent, Germany's Dax was downby 0.01 percent, France’s CAC was up by 0.11 percent.
Commodities Recap
Gold dipped on Friday after the European Central Bank stopped short of offering any concrete signals on further stimulus, but lingering economic uncertainties kept the metal on track for a weekly rise.
Spot gold was down 0.5% at $1,945.18 per ounce by 1040 GMT, after hitting its highest level since Sept. 2 at $1,965.94 on Thursday. Gold has gained 0.7% this week.
Oil prices fell for a second day and were on track for a second weekly fall after U.S. stock markets tumbled and U.S. stockpiles rose unexpectedly.
Brent was down 12 cents, or 0.3%, at $39.94 a barrel by 0841 GMT, after falling nearly 2% on Thursday, while U.S. crude dropped 3 cents, or 0.1%, to $37.27 a barrel, having fallen 2% in the previous session.
