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  |   Market Roundups


America’s Roundup: Dollar drops after shift in Fed policy, Wall Street gains, Gold surges over 2%, Oil prices dip as producers, refiners avoid worst of hurricane-August 29th,2020

Market Roundup

• Canada GDP Annualized (QoQ) (Q2) -38.7%, -39.6% forecast, -8.2% previous

•Canada GDP (QoQ) (Q2)  -11.5%,-2.1% previous

•Canada GDP Implicit Price (QoQ) (Q2) -1.20%, 0.50% previous

•US Jul Personal Income (MoM) 0.4%, -0.2% forecast, -1.1% previous

•US Jul Personal Spending (MoM) 1.9%, 1.5% forecast, 5.6% previous

•US Jul Real Personal Consumption (MoM)  1.6%, 5.2% previous

•Canada GDP (YoY) (Q2) -13.01%, -0.91% previous

•US Jul PCE price index (MoM) 0.3%, 0.4% previous

•US Jul PCE Price index (YoY) 1.0, 0.8 previous

•US Jul Core PCE Price Index (MoM) 0.3%,   0.5% forecast, 0.2% previous

•US Jul Core PCE Price Index (YoY)   1.3%,1.2% forecast, 0.9% previous

•US Jul Retail Inventories Ex Auto 0.6%, -0.8% previous

•US Jul Goods Trade Balance -79.32B, -70.99B previous

•Canada June GDP (MoM) 6.5%,  5.6% forecast,4.5% previous

•US Wholesale Inventories (MoM) -0.1%,-1.4% previous

• US Aug Chicago PMI  51.2, 52.0 forecast, 51.9  previous

• US Aug Michigan Inflation Expectations 3.1%,  3.0% forecast, 3.0% previous

• US Aug Michigan 5-Year Inflation Expectations 2.70%2.70% forecast,2.60% previous

•US Aug Michigan Current Conditions 82.9,  82.5 forecast, 82.8 previous

• US Aug Michigan Consumer Expectations  68.5, 66.5 forecast, 65.9 previous

•US Aug Michigan Consumer Sentiment 74.1, 72.8 forecast, 72.5 previous

•Canada Jun Budget Balance (YoY) -120.35B, -86.77B previous

•Canada Jun Budget Balance  -33.58B,-43.93B previous

•US Jul Dallas Fed PCE 2.00%, 1.70% previous

• U.S. Baker Hughes Oil Rig Count 180, 183 previous

Looking Ahead - Economic Data (GMT) 

• No  data ahead

Looking Ahead - Economic events and other releases  (GMT)     

• No significant events

Currencies Recap

EUR/USD: The euro rose against dollar on Friday as the U.S. Federal Reserve's new policy framework suggested that interest rates would remain low. The greenback resumed its slide against a basket of major currencies in the wake of Fed Chair Jerome Powell's remarks at the virtual Jackson Hole conference. Powell said the U.S. central bank would seek to keep inflation at 2%, on average, so that periods of too-low inflation would likely be followed by an effort to lift inflation above 2% for some time. The dollar index was last 0.5% lower at 92.513.As the dollar weakened, the euro climbed 0.4% to $1.1875.Immediate resistance can be seen at 1.1919 (Daily high), an upside break can trigger rise towards 1.1947(23.6% fib).On the downside, immediate support is seen at 1.1837 (38.2% fib ), a break below could take the pair towards 1.1815(Daily low).

GBP/USD: Sterling rose above $1.33 for the first time in 2020 and touched an eight-month high as the dollar fell across the board in the aftermath of a speech by Federal Reserve Chairman Jerome Powell. In his address to the virtual Jackson Hole Symposium, Powell fuelled expectations that U.S. interest rates could remain low for a long time to come by signalling the central bank would aim for inflation to average 2%, rather than exactly hit that level. Immediate resistance can be seen at 1.3350 Daily high), an upside break can trigger rise towards 1.3423 (Dec 16th 2019 High).On the downside, immediate support is seen at 1.3200 (Psychological level), a break below could take the pair towards 1.3171(5 DMA).

USD/CAD: The Canadian dollar climbed to a fresh seven-month high against its U.S. counterpart on Friday, on pace for a fourth straight day of gains as the U.S. dollar remained broadly weak and after data showed a record surge in Canada’s real gross domestic product in June. Canada’s real GDP surged by a record 6.5% in June, as the economy continued to claw back from steep declines in March and April, though economic activity still remained below pre-pandemic levels, Statistics Canada said on Friday. The Canadian dollar was at 1.3094 to the greenback, stronger than Thursday’s close of 1.3123 .Immediate resistance can be seen at 1.3153 (5DMA), an upside break can trigger rise towards 1.3175 (11DMA).On the downside, immediate support is seen at 1.3045 (Daily low), a break below could take the pair towards 1.3000 (Psychological level).

USD/JPY: The dollar declined against the Japanese yen on Friday as Japanese yen surged on safe-haven buying after Prime Minister Shinzo Abe resigned for health reasons. There had been speculation about Abe’s health all week but the resignation of Japan’s longest-serving premier rattled investors, given that he has spearheaded efforts to revive growth through his reflationary “Abenomics” policies. The dollar was last down 1.0% against the yen at 105.35. Strong resistance can be seen at 105.53(38.2% fib), an upside break can trigger rise towards 106.00 (21 DMA).On the downside, immediate support is seen at 105.15 (Daily low), a break below could take the pair towards 104.91 (Lower BB).

Equities Recap

Equities Recap

European stocks slipped on Friday as investors dumped this year’s outperformers including technology and healthcare stocks and bid up banking shares after the U.S. Federal Reserve unveiled its new policy framework.

UK's benchmark FTSE 100 closed down by  1.51 percent, Germany's Dax ended down by 2.56 percent, France’s CAC finished the day down by 2.85 percent.                

U.S. stocks fell sharply for the second day on Wednesday after Federal Reserve Chairman Jerome Powell warned of an extended period of weak growth and stagnant incomes due to the coronavirus pandemic, dashing hopes of a quick economic recovery.

Dow Jones closed up by  0.57% percent, S&P 500 closed up by 0.67 % percent, Nasdaq settled down  by 0.60%  percent.

Treasuries Recap

Longer-term U.S. Treasury yields rose on Friday as U.S. Federal Reserve officials fleshed out the central bank's new approach to inflation, while investors rebalanced intermediate-dated debt following large auctions earlier this week.

The benchmark 10-year yield was down a basis point at 0.7359% in afternoon trading, while the five-year note  was down 3 basis points at 0.2799%.

Commodities Recap

Gold rebounded over 2% on Friday, a day after a steep sell-off, as the U.S. dollar weakened and the U.S. Federal Reserve signaled a prolonged low interest rate strategy.

Spot gold rose 2.1% to $1,968.59 per ounce by 12:41 pm EDT (1641 GMT), taking gains this week to about 1.5%. Prices fell as much as 2.2% on Thursday after U.S. Treasury yields gained following Fed Chair Jerome Powell’s speech.U.S. gold futures rose 2.5% to $1,980.90.

Oil prices inched lower on Friday as Hurricane Laura passed the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage and companies began to restart operations.

Brent crude futures   for October fell 4 cents to settle at $45.05 a barrel, before expiring on Friday. U.S. West Texas Intermediate (WTI) crude   fell 7 cents to $42.97 a barrel.

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