Market Roundup
• US GDP 2nd Estimate Q1 +1.2% vs 0.9% forecast, 0.7% previous.
• US Cons Spending Prelim Q1 +0.6%, 0.3% previous.
• US Durable Goods Apr -0.7% vs -1.2% forecast, +2.3 previous.
• US Core PCE Prices Prelim Q1 +2.1% vs 2.0% forecast, 2.2% previous.
• US U Mich Sentiment Final May 97.1 vs 97.5 forecast, 97.7 previous.
• US ECRI Weekly Index 144.1, 144.5 previous.
• Atlanta Fed pares US Q2 GDP growth estimate to 3.7% from 4.1% on May 16.
• NY Fed trims US Q2 GDP growth view to 2.17% from 2.32% on May 19.
• May and Trump reaffirm UK-U.S.trade commitment - May's spokesman.
• U.S., Japan agree to enhance North Korea sanctions- White House.
• UK PM May's lead falls to new low of 5 points ahead of June 8 election-YouGov poll.
• US economy has seen "splutter" rather than fundamental change in trajectory - IMF
chief economist.
Looking Ahead - Economic Data (GMT)
• No significant data
Looking Ahead - Events, Other Releases (GMT)
• --:-- BOJ Governor Haruhiko Kuroda speaks at the 2017 Spring Annual Meeting of the
Japan Society of Monetary Economics (May 27)
Currency Summaries
EUR/USD is likely to find support at 1.1139 levels and currently trading at 1.1169 levels. The pair has made session high at 1.1187 and hit lows at 1.1158 levels. The euro declined against the dollar on Friday as dollar after upbeat U.S. gross domestic product data. The U.S. economy slowed less than initially thought in the first quarter. Gross domestic product increased at a 1.2 percent annual rate instead of the 0.7 percent pace reported last month, the Commerce Department said on Friday. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose at a 0.6 percent rate instead of the previously reported 0.3 percent pace. That was still the slowest pace since the fourth quarter of 2009 and followed the fourth quarter's robust 3.5 percent growth rate. The greenback weakened earlier this week after minutes of the Federal Reserve's most recent meeting showed policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary. The dollar index, which tracks the greenback against six major rivals, was up 0.18 percent to 97.423, after rising to a one-week high of 97.548, earlier in the session.
GBP/USD is supported in the range of 1.2749 levels and currently trading at 1.2808 levels. It reached session high at 1.2827 and dropped to session low at 1.2774 levels. British pound declined sharply against the dollar on Friday as sellers stepped in after an opinion poll showed the governing Conservatives' lead over the labour opposition down to just 5 percentage points less than two weeks before a parliamentary election. The pound sank against the euro and by more than 1 percentage point against the dollar to its lowest in a month, more than 2 cents below last week's six-month highs. The assumption that Prime Minister Theresa May's Conservatives would win handsomely, strengthening her hand in negotiations on Britain's departure from the European Union, has driven the pound higher since she called an election for June 8.But a poll by the YouGov organisation taken after Monday's bombing in Manchester showed her lead is just a quarter of what some polls showed a month ago and might deliver the slimmest of majorities. By 20:00 GMT, the pound had fallen to $1.2772, down 1.2 percent on the day in its biggest one-day tumble since Jan. 18. It fell 1 percent to 87.15 pence per euro.
USD/CAD is supported at 1.3400 levels and is trading at 1.3458 levels. It has made session high at 1.3486 and lows at 1.3438 levels. Canadian dollar strengthened on Friday against its U.S. counterpart as prices of oil, one of Canada's major exports, stabilized after a sharp drop the day before. Oil prices recovered on Friday from some of the previous day's steep slide after investor disappointment that OPEC curbs did not go far enough, while Wall Street stocks eked out a seventh straight day of gains. Friday's partial rebound for oil prices followed a day of downward pressure. Some market participants had priced in more aggressive, extended output cuts from the Organization of the Petroleum Exporting Countries. On Thursday, the loonie touched its strongest intraday level in five weeks at C$1.3388 after the Bank of Canada on Wednesday sketched a rosier economic view than investors had expected in its statement announcing no change in its 0.5 percent benchmark interest rate. The Canadian dollar was trading at C$1.3450 to the greenback, or 74.32 U.S. cents, up 0.2 percent. The currency traded in a range of C$1.3441 to C$1.3470.
USD/JPY is supported around 110.69 levels and currently trading at 111.28 levels. It peaked to hit session high at 111.41 and made session lows at 110.88 levels. The U.S. dollar inched slightly higher against the Japanese yen on Friday as dollar strengthened across the board after data showed larger-than-expected upward revision to gross domestic product in the first quarter. The U.S. economy slowed less than initially thought in the first quarter, but softening business investment and moderate consumer spending are clouding expectations of a sharp acceleration in the second quarter. Gross domestic product increased at a 1.2 percent annual rate instead of the 0.7 percent pace reported last month, the Commerce Department said on Friday in its second GDP estimate for the first three months of the year. Friday's data signaled the U.S. economy was expanding, albeit at a modest clip. This may allow the Federal Reserve to raise interest rates further and to begin paring its $4.5 trillion balance sheet.
Equities Recap
European shares slid in thin trade on Friday as shares in energy firms and banks dropped, ending a lacklustre week relatively little changed.
UK's benchmark FTSE 100 closed up by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.22 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day up by 0.1 percent.
U.S. stocks ended little changed on Friday ahead of the long holiday weekend, though indexes ended a two-week streak of losses and consumer shares were strong for a second day.
Dow Jones closed down by 0.03 percent, S&P 500 up down 0.02 percent, Nasdaq finished the day up by 0.08 percent.
Treasuries Recap
U.S. Treasury yields held steady in shortened trading on Friday as bond purchases for month-end portfolio rebalancing offset news of a larger-than-expected upward revision to gross domestic product in the first quarter.
The benchmark 10-year Treasury yield was down 0.5 basis point at 2.250 percent, ending marginally higher on the week. It traded in a tight seven-basis-point range this week on light trading volume.
Commodities Recap
Gold rose to its highest in nearly four weeks on Friday as political uncertainty led investors to favor bullion over assets considered riskier such as stocks.
Spot gold gained 1.1 percent at $1,268.69 an ounce by 2:19 p.m. EDT (1819 GMT), the highest since May 1. It was on track to close the week up around 1 percent, the third straight week higher. U.S. gold futures settled up 0.9 percent at $1,268.10.
Oil prices rebounded to rise more than 1 percent on Friday, but ended the week nearly 3 percent lower after an OPEC-led decision to extend production curbs did not go as far as many investors had hoped.
Brent futures settled up 69 cents to $52.15 a barrel, or 1.3 percent, after hitting a session low of $50.71.
U.S. West Texas Intermediate (WTI) crude futures settled at $49.80 a barrel, gaining 90 cents or 1.8 percent, after hitting an intra-day low at $48.18.
