Market Roundup
• US Markit Flash Comp PMI Sep, 54.6, 55.3 previous.
• US Markit Mfg PMI Flash Sep, 53.0, 53.0 forecast, 52.8 previous.
• US Markit Svcs PMI Flash Sep, 55.1, 55.9 forecast, 56.0 previous.
• CA CPI Inflation MM Aug, 0.1%, 0.2% forecast,, 0.0% previous.
• CA CPI Inflation YY Aug, 1.4%, 1.5% forecast,, 1.2% previous.
• CA CPI BoC Core YY Aug, 0.9%, 0.9% previous.
• CA CPI BoC Core MM Aug, 0.0%, -0.1% previous.
• CA Retail Sales MM Jul, 0.4%, 0.1% forecast,, 0.1 previous.
• CA Retail Sales Ex-Autos MM Jul, 0.2%, 0.4% forecast,, 0.7% previous.
• Dallas Fed's Kaplan says open to Dec rate hike but still eyeing inflation.
• N.Korea may consider H-bomb test in Pacific, Kim calls Trump 'deranged'.
Looking Ahead - Economic Data (GMT)
• 00:30 Japan Nikkei Mfg PMI Flash Sep, 52.2 prev (Sep 25)
Looking Ahead - Events, Other Releases (GMT)
• (Sep 25) 05:35 BOJ Governor Kuroda will deliver speech and take questions in Osaka
• (Sep 25) 08:30 BOE's Financial Policy Committee statement to be published
• (Sep 25) 12:30 Fed’s Dudley speaks at Onondaga Community College, Syracuse
• (Sep 25) 13:00 Introductory statement by ECB’s Draghi in Brussels, Belgium
• (Sep 25) 16:40 Fed’s Evans speaks at Grand Rapids, Michigan
• (Sep 25) 22:30 Fed’s Kashkari speaks at Town Hall Event, Grand Forks, North Dakota.
Currency Summaries
EUR/USD is likely to find support at 1.1900 levels and currently trading at 1.1940 levels. The pair has made session high at 1.1982 and hit lows at 1.1935 levels. The euro fell against the dollar on Friday, retracing most of its previous day’s gains as renewed flare-up of tensions between Pyongyang and Washington put pressure on euro. U.S. President Donald Trump ordered new sanctions against North Korea on Thursday and Pyongyang's leader defiantly vowed to persist with its nuclear and missile programmes and said it would consider measures against the United States. North Korea's leader Kim Jong Un said in a rare statement on Friday the North will consider the "highest level of hard-line countermeasure in history" against the United States in response to U.S. President Donald Trump's threat to "totally destroy" the North. On the data front, the number of Americans filing for unemployment benefits unexpectedly fell last week, but the near-term outlook for the labour market was muddied by the continuing impact of Hurricanes Harvey and Irma. The dollar index, which tracks the U.S. unit against a basket of six major rivals, fell 0.2 percent to 92.16, still up 0.2 percent for the week and holding well above its more than 2-1/2 year nadir of 91.011 marked on Sept. 8.
GBP/USD is supported in the range of 1.3452 levels and currently trading at 1.3526 levels. It reached session high at 1.3584 and dropped to session low at 1.3484 levels. Sterling declined against the dollar on Friday as sterling came under selling pressure after British Prime Minister Theresa May failed to give any concrete details for how Britain might retain preferential access to Europe's single market. In a closely watched speech in Italy, May said Britain should stay in the trade bloc during a roughly two-year transition out of the European Union, and offered concessions on a divorce deal as she appealed for a revival of Brexit negotiations. May said Britain would honour its budget commitments made during the period of its EU's membership, and that Britain could seek a "better" deal than that a Canada-style free-trade agreement or membership of the European Economic Area would offer. But analysts said the speech was scant on details about how Britain might secure proper access to the EU's lucrative single market, a sticking point in the negotiations, causing traders to sell the British currency. The EU's Brexit negotiator Michel Barnier praised May's speech for a "constructive spirit" in divorce talks with the EU, but said he needed more clarity on what some of her declarations meant. Sterling gained about 20 ticks after Barnier's response, last down 0.4 percent on the day at $1.3524.
USD/CAD is supported at 1.2249 levels and is trading at 1.2338 levels. It has made session high at 1.2351 and lows at 1.2266 levels. The Canadian dollar pared some gains against its U.S. counterpart on Friday after domestic data indicated the country's central bank does not have to raise rates rapidly. Canada’s annual inflation rate rose to 1.4 percent last month from 1.2 percent in July. That was slightly below economists' forecasts of 1.5 percent, although two out of three of the central bank's core inflation measures also increased. Retail sales rose 0.4 percent in July, topping economists' expectations for a gain of 0.1 percent, but volumes showed a 0.2 percent decline. The central bank raised rates earlier in September for the second time in three months after Canada's economic growth accelerated this year. Chances of another rate hike in October edged lower, to 38 percent from 42 percent before the data, the overnight index swaps market indicated. The price of oil, one of Canada's major exports, dipped as investors waited to see whether major producers meeting in Vienna would back an extension to output cuts beyond March. At (1950 GMT), the Canadian dollar was trading at C$1.2331 to the greenback, or 81.23 U.S. cents, up 0.1 percent.
USD/JPY is supported around 111.20 levels and currently trading at 112.09 levels. It peaked to hit session high at 112.15 and made session lows at 111.59 levels. The U.S. dollar gave up ground against the yen on Friday as simmering tensions on the Korean peninsula and as the boost from heightened expectations of a U.S. interest rate hike in December faded. North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after U.S. President Donald Trump threatened to destroy the reclusive country, with leader Kim Jong Un promising to make a "mentally deranged" Trump pay dearly for his comments. The dollar was down 0.42 percent at 112.99 yen, on pace to snap a five-day winning streak against the Japanese currency. The dollar scaled a two-month peak of 112.71 yen on Thursday after the Bank of Japan maintained its bond-buying pledge. The move also was spurred by the Federal Reserve's policy statement on Wednesday in which it signalled it still intended to raise rates in December. The dollar index, which tracks the greenback against six major currencies, was down 0.13 percent to 92.136.
Equities Recap
European shares steadied on Friday, as tensions over North Korea kept some investors on the sidelines ahead of a national election in Germany that conservative Chancellor Angela Merkel looks set to win.
UK's benchmark FTSE 100 closed up by 0.6 percent, the pan-European FTSEurofirst 300 ended the day up by 0.05 percent, Germany's Dax ended flat, France’s CAC finished the day up by 0.3 percent.
The S&P 500 closed slightly higher on Friday as worries about Washington's latest healthcare legislation overhaul proposal eased and investors shrugged off concerns about U.S.-North Korea tensions even as Apple weighed on the market.
Dow Jones closed down by 0.07 percent, S&P 500 ended up 0.05 percent, Nasdaq finished the day up by 0.04 percent.
Treasuries Recap
U.S. Treasury prices gained on Friday on global concerns about North Korea after it said it might test a hydrogen bomb over the Pacific Ocean, and as investors closed positions before the weekend.
Benchmark 10-year notes gained 7/32 in price to yield 2.26 percent, down from 2.28 percent on Thursday.
Commodities Recap
Gold edged up from the previous day's four-week low on Friday as the dollar fell and investors sought a safe haven from geopolitical uncertainty caused by rising tensions between North Korea and the United States.
Spot gold was up 0.36 percent at $1,295.71 per ounce by 2:29 p.m. EDT (1829 GMT), having hit a four-week low of $1,287.61 on Thursday. Prices hovered near support at the 50-day moving average. U.S. gold futures for December delivery settled up $2.70, or 0.21 percent, at $1,297.50 per ounce.
Oil prices ended nearly 1 percent higher on Friday, close to their highest levels in months, as major producers meeting in Vienna said they may wait until January before deciding whether to extend output curbs beyond the first quarter.
Brent crude rose 43 cents, or 0.8 percent, to settle at $56.86, a penny shy of the session high which was also the highest since March.
U.S. West Texas Intermediate (WTI) crude settled at $50.66 a barrel, up 11 cents or 0.2 percent, within a few cents of its May peak.
