Market Roundup
• US Core PCE Price Index MM Aug, 0.1%, 0.2% forecast, 0.1% previous.
• US Personal Consumption Expenditure Aug, -0.1%, 0.2% previous.
• US Personal Income MM Aug, 0.2%, 0.2% forecast, 0.4% previous.
• US Consumption, Adjusted Aug, 0.1%, 0.1% forecast, 0.3% previous.
• US Core PCE Price Index YY Aug, 1.3%, 1.4% previous.
• US PCE Price Index Aug, 0.2%MM, 1.4%YY, 0.1%, 1.4% previous.
• CA GDP MM Jul, 0.0%, 0.1% forecast, 0.3% previous.
• CA Producer Prices MM Aug, 0.3%, 0.5% forecast, -1.5% previous.
• CA Raw Materials Prices MM Aug, 1.0%, 0.3% forecast, -0.6% previous.
• US Chicago PMI Sep, 65.2, 58.5 forecast, 58.9 previous.
• US U Mich Sentiment Final Sep, 95.1, 95.3 forecast, 95.3 previous.
• US Dallas Fed PCE Aug, 1.5%, 1.4% previous.
• Rich would benefit most from Trump tax cut plan - policy group.
Looking Ahead - Economic Data (GMT)
• 01:00 China NBS Non-Mfg PMI Sep, 53.40 previous (Sep 30)
• 01:00 China NBS Manufacturing PMI Sep, 51.5 forecast, 51.7 previous (Sep 30)
• 01:45 China Caixin Mfg PMI Final Sep, 51.5 forecast, 51.6 previous (Sep 30)
• 22:30 Australia AIG Manufacturing Index Sep, 59.80 previous (Oct 1)
• 23:50 Japan Tankan Big Mf Index Q3, 18 forecast, 17 previous (Oct 1)
• 23:50 Japan Tankan Big Mf Outlook DI Q3, 16 forecast, 15 previous (Oct 1)
• 23:50 Japan Tankan Big Non-Mf Index Q3, 23 forecast, 23 previous (Oct 1)
• 23:50 Japan Tanka Big Non-Mf Outlook DI Q3, 20 forecast, 18 previous (Oct 1)
• 23:50 Japan Tankan All Sm Capex Est Q3, -13.8% forecast, -20.6% previous (Oct 1)
• 00:30 Japan Nikkei Mfg PMI Sep, 52.6 previous (Oct 2)
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1755 levels and currently trading at 1.1823 levels. The pair has made session high at 1.1831 and hit lows at 1.1787 levels. The euro inched higher against the dollar on Friday as dollar dipped after data showed that U.S. consumer spending barely rose in August and reports U.S. President Donald Trump met with former Federal Reserve Governor Kevin Warsh about a potential nomination to head the U.S. central bank. In light of his views on rates and past stance against the expansion of the Fed's balance sheet, Warsh is seen as more hawkish than current Fed Chair Janet Yellen, whose term expires in February, analysts said. Friday's data did not change traders' expectations, at about 73 percent, that the Fed would raise short-term rates again in December. The dollar index, a trade-weighted basket of the greenback against its rivals, was flat at 93.05.It has gained more than 1 percent this week, putting it on track for its best weekly performance since December. The euro was up 0.35 percent at $1.1824, having earlier hit a three-day high against the dollar.
GBP/USD is supported in the range of 1.3333 levels and currently trading at 1.3414 levels. It reached session high at 1.3451 and dropped to session low at 1.3341 levels. Sterling inched slightly higher against the dollar on Friday after data showed U.S. consumer spending barely rose in August but the report did little to change expectations that the Federal Reserve would raise interest rates again in December. Another report showed the Chicago purchasing managers index, which gauges factory activity, came in better than expected for September. British pound had weakened earlier after data showed Britain's economy had recorded its weakest annual growth since 2013 in the second quarter of the year, but recovered to trade last at $1.3410. Friday's data showed year-on-year gross domestic product growth slowed to 1.5 percent in the second quarter from 1.8 percent in the first three months of the year. The British pound is on track for an almost 4 percent climb versus the dollar since the start of the month, its best performance since September 2013, lifted by dollar weakness as well as a shift to a more hawkish tone from the BoE. Against the euro, it slipped as much as 0.8 percent to 88.41 pence, before recovering to 88.12 pence, still down half a percent on the day.
USD/CAD is supported at 1.2415 levels and is trading at 1.2467 levels. It has made session high at 1.2532 and lows at 1.2493 levels. The Canadian dollar weakened against its U.S. counterpart on Friday after domestic data showed the economy stalled in July, further dampening prospects of a another interest rate hike by the Bank of Canada next month. Canada’s economy was unchanged in July following eight consecutive months of growth, including a 0.3 percent increase in June, Statistics Canada said. The Bank of Canada raised rates in July and September after the country's growth accelerated in the first half of the year. But chances of another increase next month edged lower after Friday's data, to around 20 percent, the overnight index swaps market indicated. They were 40 percent before a speech on Wednesday by Bank of Canada Governor Stephen Poloz that analysts said was dovish. Both Poloz and Deputy Governor Tim Lane have helped talk down the Canadian dollar in recent weeks after the currency's strength put growth at risk. The Canadian dollar was down 0.3 percent at C$1.2468 to the greenback, or 80.27 U.S. cents. The currency traded in a range of C$1.2417 to C$1.2480. On Thursday it touched a four-week low at C$1.2519.
AUD/USD is supported around 0.8000 levels and currently trading at 0.8045 levels. It hit session high at 0.8049 and made session lows at 0.7815 levels. The Australian dollars declined on Friday and was poised for the worst weekly performance since April, underscoring a resurgent greenback as talk of another U.S. rate rise gathered momentum. The falls have come on the back of rising U.S. Treasury yields after Federal Reserve Chair Janet Yellen indicated the Fed would hike rates in December, which would be the third increase this year. At the same time, Reserve Bank of Australia (RBA) Governor Philip Lowe signalled a patient approach to any changes to policy, with the cash rates set to stay at a record low 1.50 percent for a while yet. The RBA meets next week for its October policy meeting where it is widely expected to stand pat. The Australian dollar was a touch weaker at $0.7844, not far from $0.7799 set on July 18.For the week, the Aussie is down about 1.5 percent, its worst showing since April 4.
Equities Recap
European shares ended with the best monthly gain this year on Friday, helped by a weakening euro, but uncertainty over the Catalan crisis weighed on Spanish stocks.
The UK's benchmark FTSE 100 closed up by 0.64 percent, FTSEurofirst 300 ended the day up by 0.32 percent, Germany's Dax ended up by 0.81percent, and France’s CAC finished the up by 0.45 percent.
The S&P 500 and the Nasdaq rose to record levels on Friday, buoyed by gains in technology stocks, while each of the major indexes were on track to close out the quarter with solid gains.
Dow Jones closed up by 0.07 percent, S&P 500 ended up 0.34 percent, Nasdaq finished the day up by 0.63 percent.
Treasuries Recap
Most U.S. Treasury yields edged higher on Friday, marking the end of a choppy third quarter, as investors weighed the chances on the Federal Reserve raising interest rates in December and Washington's implementation of tax cuts and other fiscal changes.
The benchmark 10-year U.S. Treasury note yield was up 2 basis points at 2.325 percent, while the 30-year yield was down 0.9 basis point at 2.859 percent.
The two-year yield was up over 2 basis points at 1.479 percent, not too far from the near nine-year peak it reached this week.
Commodities Recap
Gold prices edged lower on Friday as slightly weaker U.S. inflation and consumer spending data did little to dampen expectations of an interest rate hike in December. Spot gold was down 0.3 percent at $1,283.61 per ounce by 2:31 p.m. EDT (1831 GMT).
Gold futures for December delivery settled down $3.90, or 0.3 percent, at $1,284.80 per ounce, 2.8 percent lower for September, yet 2.9 percent higher for the quarter.
Oil prices closed up on Friday after a rally in prices around geopolitical instability in Iraqi Kurdistan helped Brent make its strongest third-quarter price performance since 2004.
U.S. crude closed up 11 cents to settle at $51.67 a barrel, its strongest third quarter in 10 years and its longest streak of weekly gains since January. U.S. crude was up around 2 percent on the week.
