Market Roundup
• US Q1 GDP Advance, 2.3%, 2.0% forecast, 2.9% previous.
• US Q1 GDP Sales Advance, 1.9%, 1.4% forecast, 3.4% previous.
• US Q1 GDP Cons Spending Advance, 1.1%, 4.0% previous.
• US Q1 GDP Deflator Advance, 2.0%, 2.2% forecast, 2.3% previous.
• US Apr U Mich Sentiment Final, 98.8, 98.0 forecast, 97.8 previous.
• US Apr U Mich Conditions Final, 114.9, 115.0 forecast, 115.0 previous.
• US Apr U Mich Expectations Final, 88.4, 86.9 forecast, 86.8 previous.
• US Apr U Mich 1Yr Inf Final, 2.7%, 2.7% previous.
• US Apr U Mich 5-Yr Inf Final, 2.5%, 2.4% previous.
• US Q1 Core PCE Prices Advance, 2.5%, 2.4% forecast, 1.9% previous.
• US Q1 PCE Prices Advance, 2.7%, 2.6% forecast, 2.7% previous.
• US Q1 Employment Wages QQ, 0.9%, 0.5% previous.
• US Q1 Employment Benefits QQ, 0.7%, 0.5% previous.
• US Q1 Employment Costs, 0.8%, 0.7% forecast, 0.6% previous.
• CA Feb Budget Balance, C$ , 2.83 bln, 0.17 bln previous.
• CA Feb Budget, Year-to-date, C$, -5.56 bln, -8.38 bln previous.
• Korean leaders set 'denuclearization' goal; Trump says he will maintain pressure.
• UK growth falls to 5-year low, BoE seen delaying rate hike.
• Russia ran U.S. election interference, no Trump collusion -panel Republicans.
• U.S. considers tightening grip on China ties to Corporate America.
• Venezuela faces heavy bill as grace period lapses on China loans –sources.
Looking Ahead - Economic Data (GMT)
• Apr 30 01:00 China Apr NBS Manufacturing PMI, 51.3 forecast, 51.5 previous
• Apr 30 01:00 China Apr NBS Non-Mfg PMI, 54.60 previous
• Apr 30 01:00 New Zealand Apr NBNZ Business Outlook, -20% previous
• Apr 30 01:00 New Zealand Apr NBNZ Own Activity, 21.8% previous
• Apr 30 00:00 Australia Oct HIA New Home Sales m/m, -6.1% previous
• Apr 30 01:30 Australia Mar Private Sector Credit, 0.4% previous
• Apr 30 01:30 Australia Mar Housing Credit, 0.5% previous
• Apr 30 23:30 Australia AIG Manufacturing Index, 63.10 previous
Looking Ahead - Events, Other Releases (GMT)
• Apr 30 08:00 The European Central Bank releases monthly data on lending and money supply in Frankfurt
Currency Summaries
EUR/USD is likely to find support at 1.2000 levels and currently trading at 1.2128 levels. The pair has made session high at 1.2122 and hit lows at 1.2052 levels. The euro dipped against the greenback on Friday as dollar held steady despite a government report showing slower first-quarter economic growth, while the euro was hampered by a dovish tone from the European Central Bank. The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, the Commerce Department reported. But the setback is likely temporary against the backdrop of a tightening labor market and large fiscal stimulus. U.S. gross domestic product, the government's broadest economic gauge, grew at a 2.3 percent annualized pace in the first three months of 2018, slower than the 2.9 percent rate in the prior quarter. The recent GDP growth came in stronger than the 2.0 percent increase forecast among economists polled. The euro, in which speculators held record long position, fell to $1.20965 in the previous session, its lowest level since Jan. 12. It was last trading at $1.2128, and is down 1.4 percent on the week. The common currency slid on Thursday after ECB chief Mario Draghi acknowledged evidence of a "pull-back" from exceptional growth readings seen around the turn of the year, although the central bank sought to bolster expectations for a gradual withdrawal of its monetary stimulus.
GBP/USD is supported in the range of 1.3705 levels and currently trading at 1.3778 levels. It reached session high at 1.3835 and dropped to session low at 1.3748 levels. The British pound declined to hit two-month low against the greenback on Friday after Britain's economy slowed far more than expected in the first quarter of 2018, slashing expectations the Bank of England will raise interest rates in May. The pound fell as low as $1.3748 against the dollar, weaker by more than one percent, after data showed Britain's economy grew at its weakest pace since the fourth quarter of 2012.Against the euro, the pound dropped as much as one percent to 87.85 pence. The scale of the economic slowdown may unsettle the Bank of England, which meets next week to consider whether to raise rates for only the second time since the 2008 financial crisis. Market expectations of a rate hike in May more than halved on Friday to 20 percent from around 50 percent before the GDP data. The market is now pricing in less than one 25-basis-point rate move this year, instead of the two increases expected by many economists only a fortnight ago. The slide marks a major reversal for the pound, which had been among the best performing major currencies in 2018 as investors loaded up on long positions. Just last week, expectations of higher rates lifted it to its highest level since the Brexit referendum in June 2016.
USD/CAD is supported at 1.2809 levels and is trading at 1.2834 levels. It has made session high at 1.2891 and lows at 1.2826 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday after mixed U.S. economic figures drove investors to pare back bets on a fast pace of U.S. interest rate hikes in coming months. The U.S. economy slowed in the first quarter as growth in consumer spending braked sharply, though labor costs increased more than expected in the period. U.S. labor costs increased more than expected in the first quarter, with wages and salaries recording their biggest gain since 2007.The Employment Cost Index, the broadest measure of labor costs, increased 0.8 percent after an unrevised 0.6 percent rise in the fourth quarter, the Labor Department said on Friday. That lifted the year-on-year rate of increase to 2.7 percent from 2.6 percent in the fourth quarter. Economists polled had forecast the ECI rising 0.7 percent in the January-March quarter. Wages and salaries, which account for 70 percent of employment costs, jumped 0.9 percent in the first quarter. The price of oil, one of Canada's major exports, was little changed on concerns of U.S. sanctions on Iran. The Canadian dollar was trading 0.29 percent higher at C$1.2826 to the greenback.
AUD/USD is supported around 0.7529 levels and currently trading at 0.7578 levels. It hit session high at 0.7580 and made session lows at 0.7547 levels. Australian dollar slipped against dollar on Friday to a near five-month trough as the greenback looked set to continue climbing. The Australian dollar eased to $0.7548, a level not seen since early December. Technical analysts see critical support at $0.7498.The Aussie fell on every single day of this week and is on track for its second straight weekly loss. The Australian dollar eased to $0.7548, a level not seen since early December. Technical analysts see critical support at $0.7498.The Aussie fell on every single day of this week and is on track for its second straight weekly loss. The Aussie was also weighed down by weakening iron ore and declining Chinese equity prices. Dalian iron ore has fallen nearly 14 percent this year so far. Separately, data out on Friday showed profits earned by China's industrial firms slowed sharply in March. China is Australia's leading trading partner and the Aussie is often played as a liquid proxy for the Chinese yuan. The Reserve Bank of Australia (RBA) board meets on Tuesday for its monthly policy decision where it is all but certain to hold rates at a record low 1.50 percent.
Equities Recap
Well-received results from Spanish banks and a recovery among tech stocks lifted European shares to a fifth straight week of gains on Friday, its longest winning streak since September.
UK's benchmark FTSE 100 closed up 1.1 percent, FTSEurofirst 300 ended the day up by 0.24 percent, Germany's Dax ended up by 0.7 percent, France’s CAC finished the day up by 0.5 percent.
Wall Street struggled for direction on Friday as inflation jitters and sagging technology and energy stocks offset an advance in the consumer discretionary sector led by Amazon.
Dow Jones closed down by 0.06 percent, S&P 500 ended up 0.11percent, Nasdaq finished the day up by 0.02 percent.
Treasuries Recap
The margin between U.S. shorter-dated Treasury yields and longer-dated ones shrank on Friday on investors' skepticism about the global economy even as the United States fared better than other nations in the first quarter.
The 10-year Treasury yield fell 3.1 basis points to 2.959 percent. It reached 3.035 percent on Wednesday, its highest level since January 2014.
Two-year note yield slipped 0.8 basis point to 2.484 percent after it hit 2.508 percent two days ago, which was last seen in September 2008.
The gap between two-year and 10-year yields narrowed by 2.4 basis points to 47.3 basis points after reaching 54.6 basis points on Thursday, its steepest level in a month.
Commodities Recap
Gold edged higher on Friday after the dollar and U.S. Treasury yields backed off highs, but the prospect of a Korean denuclearisation deal eroded bullion's safe-haven appeal.
Spot gold gained 0.4 percent at $1,321.81 per ounce by 1:37 p.m. EDT (1737 GMT). U.S. gold futures for June delivery settled up $5.50, or 0.42 percent, at $1,323.40 per ounce.
Oil prices were little changed on Friday, with Brent on track for its third week of gains amid supply concerns should the United States reimpose sanctions on Iran.
Brent crude futures rose 6 cents to $74.80 a barrel, a 0.1 percent gain, by 1:11 p.m. EDT (1711 GMT). This month, the global benchmark hit highs above $75, a level last seen in late 2014.U.S. West Texas Intermediate (WTI) crude futures fell 3 cents to $68.16 a barrel.
