Market Roundup
• Trump says no rush to reach deal with China as trade war escalates
• U.S.-China negotiators agree to meet again in Beijing - Global Times editor in chief
• Fed's Bostic says tariff hikes could prompt rate cut if consumers pull back
• US Apr Core CPI YY, NSA, 2.1%, 2.1% forecast, 2.0% previous
• US Apr CPI MM, SA, 0.3%, 0.4% forecast, 0.4%previous
• US Apr CPI YY, NSA, 2.0%, 2.1% forecast, 1.9% previous
• US Apr Real Weekly Earnings MM, -0.4%, 0.2% forecast, 0.0% previous
• US Apr Federal Budget,$, 160.00 bln, 165.00 bln forecast, -147.00 bln previous
• US Apr Cleveland Fed CPI, 0.2%, 0.3% previous
• CA Apr Employment Change, 106.5k, 10.0k forecast, -7.2k previous
• CA Apr Unemployment Rate, 5.7%, 5.8% forecast, 5.8% previous
Looking Ahead - Economic Data (GMT)
• 12 May 23:50 Japan Apr Foreign Reserves, 1,291.8 bln previous
• 13 May 01:30 Australia Mar Housing Finance, 2.0% previous
Looking Ahead - Events, Other Releases (GMT)
• May 12 N/A San Francisco Fed President Mary Daly delivers commencement address and receives honorary degree at Syracuse University
• May 13 10:30 Riksbank Deputy Governor Henry Ohlsson speaks on underlying inflation at the Swedish Society of Financial Analysts in Stockholm
• May 13 13:05 Boston Fed President Eric Rosengren speaks at a conference in Boston
• May 13 13:10 Fed's Clarida speaks at a conference in Boston
• May 13 16:55 Boston Fed President Eric Rosengren and Fed's Clarida give closing remarks at "FedListens - New England Perspectives on Fed Policymaking" conference in Boston
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Friday, as investors avoided making big bets on riskier assets amid worries that a rift over trade between the United States and China . The single currency was last trading 0.18% higher to $1.1234 and was on track for a second consecutive week of gains. The dollar index measuring the U.S. currency against a basket of six major currencies, of which the euro is a main component, was slightly weaker at 97.33. Immediate resistance can be seen at 1.1251 (50 DMA), an upside break can trigger rise towards 1.1309 (Higher Bollinger Bands).On the downside, immediate support is seen at 1.1174 (May 9th low), a break below could take the pair towards 1.1118 (Lower Bollinger Bands).
GBP/USD: The pound edged higher against dollar on Friday, after data showed the UK economy got a boost ahead of a Brexit that never came, with traders doubtful Prime Minister Theresa May can reach a deal with the opposition on how to leave the European Union. Britain's economy grew at a quarterly rate of 0.5% in the first quarter of 2019, in line with the reading expected by the Bank of England, as well as by private-sector economists in a poll. Sterling rose 0.2% to $1.3035 , cutting its week-to-date losses so far to around 1.1%, although analysts were doubtful the pound's move higher on Friday had legs. Immediate resistance can be seen at 1.3033 (5 DMA), an upside break can trigger rise towards 1.3083 (50 DMA).On the downside, immediate support is seen at 1.2966 (May 10th low), a break below could take the pair towards 1.2900 (Psychological level).
USD/CAD: The Canadian dollar strengthened to a nine-day high against its U.S. counterpart on Friday, as investors slashed bets for an interest rate cut this year from the Bank of Canada after domestic data showing a record jobs gain. The Canadian economy added 106,500 jobs in April, the biggest monthly gain on record, led by employment increases in the two most populous provinces, Ontario and Quebec, Statistics Canada data showed. That far outstripped analysts' expectations of 10,000 jobs. At (1316 GMT), the Canadian dollar was last trading 0.6% higher at 1.3313 to the greenback, , its biggest gain since March 29. The currency touched its strongest intraday level since May 1 at 1.3384.Immediate resistance can be seen at 1.3485 (Daily high), an upside break can trigger rise towards 1.3521 (21 DMA).On the downside, immediate support is seen at 1.3418 (21 DMA), a break below could take the pair towards 1.3383 (50 DMA).
USD/JPY: The dollar strengthened against the Japanese yen on Friday, as investors unwound long bets on Japanese yen after hopes rose for a U.S.-China compromise on trade. Investor sentiment remained fragile over uncertainty related to the U.S.-China trade deal.Global equities started the day on a strong note as investors looked past increased U.S. tariffs on $200 billion worth of Chinese goods and focused on hopes for a trade deal between the United States and China. The dollar was 0.47 percent higher versus the Japanese yen at 109.97. Strong resistance can be seen at 110.15 (5 DMA), an upside break can trigger rise towards 110.69 (9 DMA).On the downside, immediate support is seen at 109.45 (Lower Bollinger Band), a break below could take the pair towards 109.00 (Psychological level).
Equities Recap
European shares rose on Friday, with surging shares of Thyssenkrupp and robust defensive stocks helping equities on the continent avert the losses seen among their U.S. peers, which slid on persisting worries about U.S.-China trade.
UK's benchmark FTSE 100 closed up by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.34 percent, Germany's Dax ended up by 0.9 percent, France’s CAC finished the day up by 0.4 percent.
U.S. stocks rebounded from early losses on Friday to snap a four-day losing streak after U.S. President Donald Trump and Treasury Secretary Steven Mnuchin said trade talks between the United States and China were constructive.
Dow Jones closed up by 0.45 percent, S&P 500 ended up by 0.40 percent, Nasdaq finished the day up by 0.09 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Friday, with longer-dated yields hovering at five-week lows, as worries about trade tension between China and the United States simmered down even in the absence of a deal following two-days of negotiations.
In late U.S. trading, benchmark 10-year Treasury yields edged up 0.3 basis point to 2.4601%. They fell to a five-week low of 2.424% on Thursday.On the week, 10-year yields fell 7 basis points, the steepest drop in seven weeks.
Commodities Recap
Gold prices rose on Friday and were set to post a weekly rise as the United States raised tariffs on Chinese goods, exacerbating fears of a global economic slowdown, while palladium surged more than 5% on technical buying and short covering.
Spot gold gained 0.2% to $1,286.56 per ounce and is up about 0.6% so far this week.U.S. gold futures settled up 0.2% at $1,287.40.
Oil prices were mostly steady on Friday, ending the week slightly lower as trade tensions stoked by a U.S. move to hike tariffs on Chinese goods overshadowed tightened global supplies and expectations of rising U.S. refining demand.
Brent crude oil settled 23 cents, or 0.4%, higher at $70.62 a barrel, but posted a weekly loss of 0.3%.U.S. West Texas Intermediate (WTI) crude futures ended 4 cents lower at $61.66, with a weekly loss of 0.5%.
