Market Roundup
• May challenges EU as Brexit talks hit "impasse", sterling tumbles .
• US ‘very close’ to proceeding with Mexico-only trade deal-Trump adviser.
• White House optimistic on China trade; no date for more talks.
• US Sep Markit Comp Flash PMI, 53.4, 54.7 previous.
• US Sep Markit Services PMI Flash 52.9, 54.8 previous, 55.0 previous .
• US Sep Markit Manufacturing PMI Flash, 55.6, 54.7 previous, 55.0 forecast.
• CA Aug CPI Inflation m/m, -0.1%, 0.5% previous, -0.1% forecast.
• CA Aug CPI Inflation y/y, 2.8%, 3.0% previous, 2.8% forecast.
• CA Aug CPI BoC Core y/y, 1.7%, 1.6% previous.
• CA Aug CPI BoC Core m/m, 0.1%, 0.2% previous.
• CA Jul Retail Sales m/m, 0.3%, -0.2% previous, 0.4% forecast, -0.1%devided .
• CA Jul Retail Sales Ex-Autos m/m, 0.9%, -0.1% previous, 0.6%, 0.1% previous.
• OPEC and allies consider oil output boost as Iranian supply falls -source
• Argentine peso strengthens again on optimism of new IMF deal
• Still work to do before second Trump-Kim summit – Pompeo
• Trump delays release of Russia probe documents
Looking Ahead - Economic Data (GMT)
• No major economic data scheduled.
Looking Ahead - Events, Other Releases (GMT)"
• 22 Sep N/A The Riksbank celebrates 350th anniversary of its head office in Stockholm.
• 24 Sep N/A Roundtable with Nestor Espenilla, Governor of the Bangko Sentral NG Pilipinas in London.
• 24 Sep 13:00 ECB President Draghi speaks to the European Parliament's ECON committee in a regular hearing in Brussels.
• 24 Sep 15:30 Swedish Central Bank First Deputy Governor Kerstin af Jochnick speaks on the Riksbank's history, in Sundsvall, Sweden.
Currency Summaries
EUR/USD is likely to find support at 1.1679 levels and currently trading at 1.1753 levels. The pair has made session high at 1.1766 and hit lows at 1.1728 levels. The euro slipped lower against the U.S. dollar on Friday as euro after British Prime Minister Theresa May said the European Union must come up with an alternative to her Brexit proposals, saying talks had reached an impasse after the bloc's leaders rejected her plans without explaining why. British Prime Minister Theresa May said on Friday that Brexit talks with the European Union had hit an impasse, defiantly challenging the bloc to come up with its own plans a day after EU leaders savaged her proposals. At a summit in Austria on Thursday, EU leaders rejected May's "Chequers" plan, saying she needed to give ground on trade and customs arrangements for the UK border with Ireland. The British media said the response had left her proposals in tatters, and May angrily struck back in a televised address from her Downing Street office, saying neither side should expect the impossible from the other. Investors await next week's Federal Reserve meeting, where the U.S. central bank is widely expected to raise benchmark interest rates. Fed funds futures are pricing in a roughly 80 percent chance for a tightening at the December meeting, with implied rates showing a 50-50 probability of another hike as soon as the March 2019.
GBP/USD is supported in the range of 1.3000 levels and currently trading at 1.3081 levels. It reached session high at 1.3221 and dropped to session low at 1.3054 levels. Britain's pound declined sharply against the dollar on Friday after fears rose that Britain would leave the European Union without a trade deal. British Prime Minister Theresa May said on Friday the European Union must supply an alternative Brexit proposal, saying talks had reached an impasse after the bloc's leaders had rejected her plans without fully explaining why. The pound was down 1.44 percent on Friday, set for its biggest daily loss since June 2017. The pound's move strengthened the dollar, which rebounded from early lows, but it was still on track for its biggest weekly drop since February as stronger equity markets and rising bond yields fuelled a rush to buy riskier assets. The dollar index rose 0.38 percent Friday to 94.255. With trade war concerns receding and emerging market central banks led by Turkey taking measures to stabilize their currencies, investors pushed the euro just past the $1.18 line for the first time in more than three months during the European session. The dollar's bounce, however, pulled the single currency back into the red, last at $1.174.
USD/CAD is supported at 1.2881 levels and is trading at 1.2912 levels. It has made session high at 1.2942 and lows at 1.2895 levels. The Canadian dollar edged lower against its U.S. counterpart on Friday, but was on track to gain for the second straight week as data showing a pickup in underlying inflation boosted bets for a Bank of Canada interest rate hike next month. Canada’s annual inflation rate dipped to 2.8 percent in August from 3.0 percent in July, the seventh consecutive month it has exceeded the Bank of Canada's 2.0 percent target, Statistics Canada data indicated. All of the central bank's core inflation measures were 2.0 percent or higher, for the first time since February 2012. The Bank of Canada has raised interest rates four times since July 2017. Chances of another hike in October rose to nearly 90 percent from 85 percent before the data, the overnight index swaps market indicated. Separate data showed that Canadian retail trade rose 0.3 percent in July from June. The price of oil, one of Canada's major exports, climbed ahead of a meeting of OPEC and other large crude exporters. U.S. crude oil futures settled 0.7 percent higher at $70.78 a barrel. The Canadian dollar was trading 0.1 percent lower at C$1.2912 to the greenback. The currency, which touched its strongest in more than three months on Thursday at 1.2885, traded in a range of 1.2886 to1.2943.
AUD/USD is supported around 0.7250 levels and currently trading at 0.7288 levels. It hit session high at 0.7289 and made session lows at 0.7261 levels. The Australian dollar was heading for its best week in over a year Friday as risk sentiment recovered from the latest round of Sino-U.S. tariffs and a major ratings agency upgraded its outlook on Australia's credit standing. S&P Global Ratings revised its outlook to stable, from negative, removing the risk of a downgrade to Australia's triple-A rating and supporting bond prices. The Aussie dollar was at $0.7293 and holding gains for the week of 1.9 percent, the largest since July last year. It faces a trendline from this year's peak around $0.7300 and more chart resistance in the $0.7312/18 zone. A break of that would open the way to at least $0.7381, if not $0.7450. Investors had spent weeks shorting the Aussie as a wager on, or hedge against, global trade tensions and turmoil in emerging markets. But the actual impact of new tariffs has been limited, at least for now. Sentiment has also been supported by promises of economic stimulus from Beijing and reports it might cut tariffs on imports from other countries, perhaps including Australia.
Equities Recap
Easing fears of a trade war further lifted European shares on Friday, with trade-sensitive sectors like miners and autos leading the advance.
UK's benchmark FTSE 100 closed down 1.49 percent, the pan-European FTSEurofirst 300 ended the day up by 0.53percent, Germany's Dax ended up by 0,74 percent, France’s CAC finished the day down by 0.62 percent.
Industrials led the Dow to a new closing high on Friday ahead of Monday's major sector reshuffle, capping a week that largely shrugged off trade worries.
Dow Jones closed up by 0.27 percent, S&P 500 ended down by 0.14 percent, Nasdaq finished the day down by 52 percent.
Treasuries Recap
U.S. long-dated Treasury yields slipped on Friday, in tandem with those in Europe, as negotiations over Britain's exit from the European Union appeared to stall.
U.S. 10-year yields dipping to 3.068 percent in afternoon trading, from 3.078 percent late on Thursday.
U.S. 30-year yields were at 3.204 percent, down from Thursday's 3.214 percent.U.S. 2-year yields, meanwhile, were at 2.808 percent, unchanged from Thursday's levels, after earlier touching a more than 10-year high at 2.825 percent.
Commodities Recap
Gold prices fell more than 1 percent on Friday as the dollar firmed against the British sterling and the euro after British Prime Minister Theresa May said the European Union must supply an alternative Brexit proposal.
Spot gold lost 0.8 percent at $1,196.86 per ounce by 1:35 p.m. EDT (1735 GMT). During the session it touched its lowest since Sept 11 at $1,191.51. However, gold headed for a 0.4 percent weekly increase.
U.S. gold futures for December delivery settled down $10, or 0.8 percent, at $1,201.30 per ounce.
Oil prices were up slightly in heavy, seesaw trading on Friday, giving back most earlier gains after news that major producers would consider additional supply a day after U.S. President Donald Trump again blasted the cartel.
Global benchmark Brent crude settled 10 cents higher at $78.80 a barrel. U.S. light crude rose 46 cents to $70.78 a barrel, more than $1 below the session high of $71.80.U.S. crude rose 2.5 percent in the week and Brent posted a 0.7 percent weekly gain.
