Market Roundup
• Trump wants tariffs on $200 bln more Chinese goods despite talks –source.
• US Aug Retail Sales Ex- Autos m/m, 0.3%, 0.6% previous, 0.5% forecast, 0.9% revised.
• US Aug Retail Sales m/m, 0.1%, 0.5% previous, 0.4% forecast, 0.7% revised.
• US Aug Industrial Production m/m, 0.4%, 0.1% previous, 0.3% forecast, 0.4% revised.
• US Aug Import Prices m/m, -0.6%, 0.0% previous, -0.2% forecast, -0.1% revised.
• US Aug Export Prices m/m, -0.1%, -0.5% previous, 0.0% forecast.
• US Aug Manufacturing Output m/m, 0.2%, 0.3% previous, 0.3% forecast.
• US Aug Capacity Utilization SA, 78.1%, 78.1% previous, 78.2% forecast, 77.9% revised.
• US Jul Business Inventories m/m, 0.6%, 0.1% previous, 0.6% forecast.
• US Sep University of Michigan Prelim, 100.8, 96.2 previous, 96.6 forecast.
• Yellen: Fed should commit to future 'booms' to make up for major busts.
• Fed policy to turn mildly restrictive in 2019, Evans says.
• Trump ex-campaign head Manafort to cooperate with Russia probe.
• BoE's Carney sees 16 bln stg economy boost if Chequers Brexit deal approved .
• IMF's $3 bln tranche to Argentina on hold as talks go on -source .
• Venezuela hands China more oil presence, but no mention of new funds .
• ECB has no plan to issue digital currency Draghi.
Looking Ahead - Economic Data (GMT)
• No major economic events are scheduled.
Looking Ahead - Events, Other Releases (GMT)
• Sep 17 07:30 Swedish Central Bank Minutes from the Monetary Policy will be published in Stockholm.
• Sep 17 09:00 ECB Board Member Benoit Coeure speaks at the German Institute for Economic Research in Berlin, Frankfurt.
• Sep 17 13:00 Riksbank Governor Stefan Ingves participates in a discussion of the lessons learned from the banking crisis of the 1990s in Stockholm.
Currency Summaries
EUR/USD is likely to find support at 1.1563 levels and currently trading at 1.1626 levels. The pair has made session high at 1.1672 and hit lows at 1.1618 levels. The euro declined against dollar on Friday as upbeat U.S. economic data and higher Treasury yields rekindled some investor appetite for the greenback. The world's top reserve currency was still on track for a weekly loss as reduced trade tensions between China and the United States, together with encouraging developments between Britain and the European Union on terms for Britain's exit from the economic bloc, pared safe-haven demand for the dollar. The U.S. Commerce Department said domestic retail sales rose 0.1 percent in August, the smallest gain in six months, but July figures were revised higher, supporting the view of solid consumer spending in the third quarter. Consumer spending, which accounts for two-third of the U.S. economy, will likely hold firm as consumer optimism improved to its strongest since March, according to the University of Michigan. An index that tracks the dollar against six major currencies was up 0.47 percent at 94.753, trimming its weekly decline to 0.6 percent. The euro climbed to a two-week high earlier on Friday following the disappointing U.S. inflation data before retreating against the greenback. The common currency was down 0.2 percent at $1.1624.
GBP/USD is supported in the range of 1.2973 levels and currently trading at 1.3068 levels. It reached session high at 1.3105 and dropped to session low at 1.3050 levels. Sterling declined against dollar on Friday but remained on track for its biggest weekly rise since March, as worries about emerging markets faded and investors bet Britain would eventually clinch a Brexit trade deal with the European Union. Britain and the EU are "closing in" on a withdrawal agreement, Brexit minister Dominic Raab said on Friday. The British currency has become increasingly correlated to risk appetite in recent weeks and concerns over a widening emerging market currency selloff had also weighed on sterling. On Friday, after initially trading to its highest since July 31, at $1.3145, sterling fell 0.1 percent to $1.3092, pushed lower by a stronger dollar. Sterling has reversed nearly all of its losses against the dollar in August, when fears of a no-deal Brexit surged. The BoE voted 9-0 to leave interest rates at 0.75 percent, a month after tightening policy for only the second time since the 2009 financial crisis, and upgraded its forecast for third-quarter GDP growth, to 0.5 percent from 0.4 percent. Despite growing confidence Britain can land a Brexit deal, domestic political uncertainty remains high.
USD/CAD is supported at 1.2960 levels and is trading at 1.3036 levels. It has made session high at 1.3053 and lows at 1.2985 levels. The Canadian dollar weakened against its U.S. counterpart on Friday as the greenback rose broadly, but the loonie was on course for its best weekly performance in five months. The U.S. dollar gained against a basket of other major currencies as U.S. retail sales rose less than forecast in August, but revised higher readings on July sales supported the view of solid economic expansion in the third quarter. The loonie has been boosted this week by higher oil prices and optimism that a deal to renew the North American Free Trade Agreement will be reached. It has climbed 1.1 percent since the start of the week, the most since April. The price of oil, one of Canada's major exports, was modestly higher on Friday after falling by the most in a month in the previous session, as the focus returned to supply concerns ahead of a November deadline for U.S. sanctions on Iranian crude. The Canadian dollar was trading 0.2 percent lower at C$1.3032 to the greenback. The currency, which touched on Thursday its strongest in two weeks at C$1.2976, traded in a range of C$1.2984 to C$1.3053.
USD/JPY is supported around 111.60 levels and currently trading at 111.96 levels. It peaked to hit session high at 112.12 and made session lows at 111.80 levels. US dollar strengthened against the Japanese yen on Friday as U.S.-China trade developments strengthened the dollar. U.S. President Donald Trump has directed aides to proceed with tariffs on about another $200 billion of Chinese goods, despite Treasury Secretary Steven Mnuchin's attempts to restart trade talks with China, a source familiar with the matter said on Friday. The timing for activating the additional tariffs was unclear. Trump, who had already imposed 25 percent tariffs on $50 billion of Chinese goods, said a week ago that he would be adding tariffs on another $200 billion in goods and had tariffs on another $267 billion in Chinese imports "ready to go on short notice if I want." The Trump administration has demanded that China cut its $375 billion trade surplus with the United States, end policies aimed at acquiring U.S. technologies and intellectual property and roll back high-tech industrial subsidies. On the data front, U.S. retail sales recorded their smallest gain in six months in August, but upward revisions to July data likely kept expectations of strong third-quarter economic growth intact. U.S. dollar index rose 0.47 percent. The greenback has been a safe haven from setbacks on the trade front.
Equities Recap
Gains among tech, auto and mining stocks pushed European shares higher on Friday, as hopes of new trade talks between the United States and China boosted investor sentiment.
The UK's benchmark FTSE 100 closed up 0.34 percent, FTSEurofirst 300 ended the day up by 0.up percent, Germany's Dax ended up by 0.63 percent, and France’s CAC finished the up by 0.53 percent.
U.S. stocks ended little changed on Friday as financials rose with bond yields, while news that President Donald Trump instructed aides to proceed with tariffs on about $200 billion of Chinese products limited gains.
Dow Jones closed down by 0.03 percent, S&P 500 ended up 0.03 percent, Nasdaq finished the day down by 0.06 percent.
Treasuries Recap
U.S. Treasury yields retreated on Friday on reports President Donald Trump has instructed aides to proceed with tariffs on about $200 billion more Chinese goods, despite Treasury Secretary Steven Mnuchin's attempts to restart trade talks with China.
The 10-year yield was last at 2.990 percent, with the 30-year at 3.128 percent. The two-year note yield was last at 2.782 percent, a session high.
Commodities Recap
Oil prices pulled back on Friday amid concerns additional U.S. tariffs would be placed on China, trading mixed after a rally triggered by worries of more sanctions on Iran.
Brent crude however pulled back on the reports of additional tariffs, dropping 5 cents a barrel to $78.12 by 1:03 p.m. EDT.
U.S. West Texas Intermediate (WTI) futures were up 29 cents at $68.88 a barrel after dropping 2.5 percent on Thursday.
Gold turned negative on Friday, as the U.S. dollar rose against the Chinese yuan after U.S. President Donald Trump reportedly told aides to proceed with tariffs on Chinese imports.
Spot gold lost 0.5 percent at $1,195.21 per ounce by 1:35 p.m. EDT (1735 GMT), having hit its highest since Aug. 28 at $1,212.65 on Thursday. It has risen more than 0.1 percent so far this week, on track for its first weekly gain in three.
U.S. gold futures for December delivery settled down $7.10, or 0.6 percent, at $1,201.10 per ounce.
