Market Roundup
• Japan Tokyo Core CPI (YoY) (Jun) 1.6%, 1.6% forecast, 1.3% previous
• Japan CPI Tokyo Ex Food and Energy (MoM) (Jun)0.0% ,0.0% previous
• Japan CPI (YoY) (Jun) 1.1%, 0.7% previous
• Japan Tokyo CPI (YoY) (Jun) 1.7%,1.4% previous
Looking Ahead Economic Data (GMT)
• 10:00 IT Italian Business Confidence (Jun) 88.4 forecast, 87.9 previous
• 10:00 Italian Consumer Confidence (Jun) 94.5 forecast, 93.4 previous
•10:30 Italian 10-Year BTP Auction 3.77% previous
•10:30 Italian 5-Year BTP Auction 3.16% previous
•Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro edged lower on Friday as dollar was supported by growing expectations of higher U.S. interest rates . The currency is the top performer at the halfway point of the year, gaining 3% , a stark reversal from last year when it dropped over 10% in its worst first-half performance since the early 1970s amid U.S. tariff pressures. Data on Thursday showed that U.S. inflation increased further in May, breaking above 4.0% for the first time in three years, as forecast by economists surveyed by Reuters.Traders expect three Fed rate hikes this year and are pricing in about a 64% chance of a September increase, according to the CME FedWatch Tool. Immediate resistance can be seen at 1.1487(Daily high), an upside break can trigger rise towards 1.1577(38.2%fib).On the downside, immediate support is seen at 1.1357(Daily low), a break below could take the pair towards 1.1329(Lower BB).
GBP/USD: The pound eased on Friday as dollar remained bid on expectations of faster U.S. rate hikes. Data on Thursday showed that the personal consumption expenditures price index surged 4.1% in the 12 months through May, the largest increase and first reading above 4.0% since April 2023, the Commerce Department's Bureau of Economic Analysis said on Thursday.PCE inflation rose by an unrevised 3.8% in April. The PCE price index climbed 0.4% over the month after rising by the same margin in April. The increase in PCE inflation was in line with economists' expectations. The Fed tracks the PCE inflation measures for its 2% target. The Fed last week kept its benchmark overnight interest rate in the 3.50%-3.75% range, but updated quarterly projections showed policymakers expected to raise borrowing costs this year Immediate resistance can be seen at 1.3326(38.2%fib), an upside break can trigger rise towards 1.3373(SMA 20).On the downside, immediate support is seen at 1.3163(23.6%fib), a break below could take the pair towards1.3135(Lower BB).
AUD/USD: Australian dollar eased against dollar on Friday as the U.S. dollar gained support from rising expectations of further Federal Reserve rate hikes.The greenback has been on a sustained upswing since the Fed’s unexpectedly hawkish turn last week, with markets now pricing a 75% likelihood of a rate increase in September.In contrast, investors have scaled back expectations for further Australian rate hikes as the pullback in oil prices is expected to ease inflationary pressures.While core inflation edged up in May, analysts now think inflation for the whole second quarter will undershoot the Reserve Bank of Australia's forecast of 3.8%.Markets imply just a 50% chance of a further rise in the 4.35% cash rate, and are actually flirting with the prospect of rate cuts in the second half of 2027. Immediate resistance can be seen at 0.6934(38.2%fib), an upside break can trigger rise towards 0.7000(Psychological level).On the downside, immediate support is seen at 0.6868(Lower BB), a break below could take the pair towards 0.6813(Lower BB).
USD/JPY: The dollar dipped against yen on Friday as investors digested Tokyo core inflation data.Market participants also remain alert to the risk of Japanese foreign exchange intervention, although authorities have so far refrained from acting despite the yen's continued weakness.Investors believe the Ministry of Finance may see limited benefits from intervention given the persistent strength of the U.S. dollar, while others argue that any sharp move beyond 162.00 could force officials to step in to curb excessive volatility.Tokyo’s annual core inflation accelerated in June, Friday data revealed, indicating growing price pressures stemming from the Middle East conflict and keeping the central bank on course to consider more rate hikes.Tokyo’s core consumer price index (CPI), excluding volatile fresh food items, increased 1.6% in June from a year earlier, data released on Friday showed, matching the median market forecast. Immediate resistance can be seen at 161.93(June 25th high) an upside break can trigger rise towards 162.00(Psychological level) .On the downside, immediate support is seen at 161.21(Daily low) a break below could take the pair towards 160.13(SAM 20).
Equities Recap
Asian shares retreated on Friday after a strong quarterly performance, as Apple’s sharp price increases highlighted risks from surging chip demand, while yen weakness was capped by the threat of Japanese intervention.
Japan’s Nikkei 225 was up by 4.69% , Souk Korea’s KOSPI was up at 5.42%, China A50 was up at 1.00%
Commodities Recap
Gold was set on Friday for a fourth straight weekly fall, as a resilient dollar and expectations of faster U.S. rate hikes to tame inflation kept bullion pressured near $4,000 per ounce.
Spot gold fell 0.6% to $4,002.77 per ounce by 0441 GMT. U.S. gold futures for August delivery lost 0.7% to $4,017.30.
Crude prices sank 2% on Friday and were headed for steep weekly losses amid easing supply concerns as more stranded oil tankers exited the Strait of Hormuz, even though a cargo vessel was hit near Oman on Thursday.
Brent crude futures fell $1.47, or 1.95%, to $73.79 a barrel as of 0421 GMT, while U.S. West Texas Intermediate fell $1.44, or 2%, to $70.48 a barrel.
