Market Roundup
• U.S., China to have face-to-face trade talk in Sept
• Dollar index climbs to one month high
• US Jul Core PCE Price Index (MoM) 0.2, 0.3 forecast, 0.2 previous
• Core Jul PCE Price Index (YoY) 1.6%, 1.6% forecast, 1.6% previous
• US PCE Deflator (YoY) 1.4%,1.4 previous
• US PCE price index (MoM)0.2%, 0.1% previous
• US Jul Personal Income (MoM) 0.1%,0.3% forecast, 0.5% previous
• US Jul Personal Spending (MoM) 0.6%,0.5% forecast, 0.3% previous
• US Jul Real Personal Consumption (MoM) 0.4%,0.2% previous
• Canada Jun GDP (MoM) 0.2%,0.1% forecast, 0.2% previous
• Canada Jun GDP (QoQ) (Q2) 0.9%,0.1% previous
• Canada Jun GDP (YoY) (Q2) 1.64%,1.35% previous
• Canada GDP Annualized (QoQ) (Q2) 3.7%,3.0% forecast, 0.5% previous
• US Aug Chicago PMI 50.4, 48.1 forecast, 44.4 previous
• US Aug Michigan 5-Year Inflation Expectations 2.60% , 2.60% 2.60% previous
• US Aug Michigan Consumer Expectations 79.9, 82.3 forecast, 82.3 previous
Looking Ahead - Economic Data (GMT)
• No economic data scheduled
Looking Ahead - Events, Other Releases (GMT)
• No major events scheduled
Currency Summaries
EUR/USD: The euro plunged to a one-month low against the dollar on Friday, as investors looked for aggressive easing by the European Central Bank and ignored doubts by some policymakers about the need for more stimulus.Poor euro zone economic data on Thursday reinforced views the ECB would cut its benchmark interest rate and announce a new round of quantitative easing at September’s meeting. German inflation slowed in August and unemployment rose, more evidence that Europe’s largest economy is slowing. The euro fell 0.62% to $1.0960, the lowest since Aug. 1. It has shed nearly 12% of its value against the dollar since the beginning of last year in a clear downward trajectory. Immediate resistance can be seen at 1.1057 (5 DMA), an upside break can trigger rise towards 1.0080 (21 DMA).On the downside, immediate support is seen at 1.0960 (Daily low), a break below could take the pair towards 1.0900 (Psychological level).
GBP/USD: Sterling declined against greenback on Friday, as concerns rose that the United Kingdom may be headed for a disruptive no-deal Brexit after Prime Minister Boris Johnson moved to restrict parliamentary time before Oct. 31. The opposition Labour Party said on Thursday it would trigger an emergency debate in parliament next week to try to stop Prime Minister Boris Johnson taking Britain out of the European Union without a withdrawal deal. The pound was broadly steady at $1.2173 and not far away from a 2-1/2 year low of $1.2015 reached earlier this month. Immediate resistance can be seen at 1.2230 (Daily high), an upside break can trigger rise towards 1.2300 (Higher Bollinger Band).On the downside, immediate support is seen at 1.2141 (Daily low), a break below could take the pair towards 1.2100 (Psychological level).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday, giving up gains it made after data showing stronger-than-expected GDP growth for the second quarter, as oil prices fell and the greenback broadly rallied.The Canadian economy expanded at a surprisingly strong annualized rate of 3.7% in the second quarter, a pace much higher than the Bank of Canada had predicted, thanks to a resurgence in goods exports, although business investment declined and growth in consumer spending slowed, Statistics Canada data indicated. The Canadian dollar was trading 0.3% lower at 1.3325 to the greenback.The currency, which was down 1% for the month, traded in a range of 1.3247 to 1.3328.. Immediate resistance can be seen at 1.3348 (Higher Bollinger Band), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3246 (Daily low), a break below could take the pair towards 1.3200 (Lower Bollinger Band).
USD/JPY: The dollar edged lower against the Japanese yen on Friday, as nagging fears the Sino-U.S. trade war will drag on increased demand for safe haven assets. China's commerce ministry said on Thursday Beijing and Washington were discussing the next round of face-to-face talks scheduled for September.U.S. President Donald Trump said some discussions were taking place on Thursday, ahead of a looming deadline for additional U.S. tariffs on Sept. 1. Yet, political risks from UK to Hong Kong and the Middle East added to the risks for the global economy and kept many investors on edge.The dollar was 0.25 percent lower versus the Japanese yen at 106.24. Strong resistance can be seen at 106.81 (Higher Bollinger Band), an upside break can trigger rise towards 107.00 (Psychological level).On the downside, immediate support is seen at 105.84 (Aug 30th low), a break below could take the pair towards 105.34 (Lower Bollinger Band).
Equities Recap
European stocks scaled fresh one-month highs on Friday, wrapping up a brutal month on a positive note as investors took comfort from Chinese and U.S. willingness to return to trade talks.
The UK's benchmark FTSE 100 closed up by 0.32 percent, Germany's Dax ended up by 0.85percent, and France’s CAC finished the up by 0.56 percent.
U.S. stocks edged higher on Wednesday, extending a strong start to the quarter as rising hopes of a trade deal with Beijing boosted investor sentiment.
Dow Jones closed up by 0.16 percent, S&P 500 ended up 0.06 percent, Nasdaq finished the day down by 0.13 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Friday on hopes the United States and China will take steps to de-escalate their trade war, though trading volumes were muted before a U.S. holiday.
The yield curve between 2-year and 10-year notes on Wednesday was the most inverted since 2007, at minus 6.50 basis points, a signal that a recession is likely in one to two years. The curve was last minus 0.30 basis point.
Thirty-year bond yields fell to record lows of 1.905% on Wednesday as investors sought safe-haven debt, but rose back to 1.992% on Friday.
Commodities Recap
Gold prices fell on Friday on a slight recovery in equities markets and Treasury yields but was on track for a fourth-straight monthly gain as fears of a global recession and uncertainty on U.S.-China trade relations drove investors to safe havens.
Spot gold fell 0.5% to $1,520.40 per ounce at 1:29 p.m. EDT (1729 GMT) and has gained 7.4% so far this month.U.S. gold futures settled down 0.5% at $1,529.40.
Oil prices eased on Friday after three days of gains, with concerns about the state of the global economy amid the U.S.-China trade war keeping prices in check.
Brent crude futures fell 65 cents, or 1.1%, to settle at $60.43 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled down $1.61, or 2.8%, at $55.10 a barrel
