Market Roundup
• US Core PCE Price Index MM May 0.1% vs 0.1% forecast, 0.1% previous
• US Core PCE Price Index YY May 1.4%, 1.5% previous
• US PCE Price Index MM May -0.1%, 0.2% previous
• US Dallas Fed PC May 1.5%, 1.9% previous
• US Chicago PMI Jun 65.7, 58.0 forecast, 59.4 previous
• US Personal Consumption Real MM May 0.1%, 0.2% previous
• US U Mich Sentiment Final Jun 95.1 vs 94.5 forecast, 94.5 previous
• US economy is seen growing 1.91% in Q2 vs 1.88% estimate June 23 – NY Fed
• US economy is seen growing 1.61% in Q2 vs 1.55% estimate June 23 – NY Fed
• Atlanta Fed pares U.S. Q2 GDP estimate to 2.7%
• ECB's Coeure: recent broadening of the Euro area recovery an encouraging development
• Trump says determined response needed on North Korea, targets Seoul on trade
• Canada GDP grows 0.2% in April
• BOCWATCH: Chances of July hike jumped to 57% after the qtrly business outlook survey
• Several UK banks stop selling Qatar riyals as diplomatic crisis mounts
Looking Ahead - Economic Data (GMT)
• 23:50 (Jul 2) JapanTankan Big Mf Idx Q2 15 forecast, 12 previous
• 23:50 (Jul 2) JapanTankan Small Mf Idx Q2 7 forecast, 5 previous
• 00:30 (Jul 3) JapanNikkei Mfg PMI Jun, 52.0 previous
• 05:00 (Jul 3) Japan Consumer Confid. Index Jun, 43.6 previous
• 01:45 (Jul 3) China Caixin Mfg PMI Final Jun 49.5 forecast, 49.6 previous
• 01:30 (Jul 3) Australia Building Approvals MM May -2.0% forecast, 4.4% previous
• 01:30 (Jul 3) Australia Private House Approvals May, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1383 levels and currently trading at 1.1418 levels. The pair has made session high at 1.1427 and hit lows at 1.1394 levels. Euro strengthened modestly against the dollar on Friday as the dollar declined following hawkish signals from foreign central banks this week pressured the greenback further. Investors have ramped-up expectations for tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada after hints from officials this week. This has made the greenback less attractive, in addition to doubts that the Federal Reserve would be able to raise interest rates again this year and that U.S. President Donald Trump could enact his pro-growth agenda. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was set to decline about 4.6 percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010. The euro touched its strongest in nearly 14 months on Thursday, at $1.1445, while the dollar index touched a roughly nine-month low of 95.470.
GBP/USD is supported in the range of 1.2947 levels and currently trading at 1.3017 levels. It reached session high at 1.3020 and dropped to session low at 1.2945 levels. Sterling struggled for direction against the dollar on Friday as sterling lost its bullish momentum after data showed British consumers have suffered the longest decline in spending power since the 1970s, though it stayed close to a six-week high on bets for interest rate hikes in the coming months. The latest figures from the Office for National Statistics painted a bleak picture for consumers who are facing the double hit of rising inflation caused in large part by the fall in the pound since the Brexit vote and slowing wage growth. Having reached as high as $1.3030, its strongest since May 23 and close to a nine-month high, sterling inched down slightly and was last trading at $1.3018. Despite Friday's modest move lower against the dollar, the pound has risen around 3.2 percent since the start of April its best quarterly performance in two years and its second straight quarter of gains after six successive losses.
USD/CAD is supported at 1.2900 levels and is trading at 1.2963 levels. It has made session high at 1.3000 and lows at 1.2945 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as oil rose and domestic growth supported the Bank of Canada's more hawkish stance. Canada's economy expanded by 0.2 percent in April after a 0.5 percent increase in March, Statistics Canada said. Hawkish comments earlier this week from Bank of Canada Governor Stephen Poloz have raised expectations for an interest rate hike as early as next month. Chances of a Bank of Canada rate hike in July have increased to one-in-two from just 20 percent after subdued inflation data last week, data from the overnight index swaps market showed.Oil prices climbed for a seventh straight session in their longest bull run since April but were still set for the worst first-half performance since 1998. The Canadian dollar was last trading at C$1.2964 to the greenback, up 0.29 percent.The currency's weakest level of the session was C$1.3011, while it touched its strongest since Sept. 9 at C$1.2947.
AUD/USD is supported around 0.7660 levels and currently trading at 0.7684 levels. It hit session high at 0.7696 and made session lows at 0.7665 levels. Australian dollar soared to a more than three-month peak against the dollar on Friday and was set for its best weekly performance since mid-March, supported by a survey showing solid manufacturing growth in top trading partner China.A gauge of manufacturing activity in the world's second-biggest economy expanded to 51.7 in June, the eleventh straight month of gains and the fastest pace since March. The Australian dollar, typically used as a liquid proxy for China plays, scaled a high of $0.7712 a level last seen on March 21.For the week, the Aussie is up nearly 1.9 percent. It notched up gains of 3.66 percent for the month, following losses in March, April and May. Next week investors will closely watch a monetary policy statement from the Reserve Bank of Australia (RBA) for any shift in language from its neutral stance. The RBA meets on Tuesday when it is widely expected to hold rates at a record low of 1.50 percent.
Equities Recap
After a choppy day, European shares sealed their worst month and first quarterly loss in a year as worries over signs of tightening monetary conditions soured the mood.
The UK's benchmark FTSE 100 closed down by 0.6 percent, FTSEurofirst 300 ended the day down by 0.51 percent, Germany's Dax ended down 0.7, and France’s CAC finished the day down by 0.7 percent.
Wall Street climbed on Tuesday as telecom stalwarts AT&T and Verizon gained and bank shares added to their torrid post-election rally, helping the Dow set another record closing high.
Dow Jones closed up by 0.31 percent, S&P 500 ended up 0.16 percent, Nasdaq finished the day down by 0.06 percent.
Treasuries Recap
U.S. Treasury yields rose on Friday as inflation data was not seen as weak enough to delay the Federal Reserve’s expected path on interest rate hikes, and as investors worried about less accommodative central banks in Europe.
Benchmark 10-year notes fell 7/32 in price to yield 2.29 percent, after reaching an more than six-week high of 2.30 percent overnight, up from 2.27 percent late on Thursday.
Commodities Recap
Oil climbed on Friday for a seventh straight session as a decrease in the U.S. rig count and stronger demand data from China lifted depressed prices that still finished the first half with the biggest decline for that period since 1998.
U.S. crude futures settled up $1.11, or around 2.5 percent, to $46.04 a barrel. Benchmark Brent crude futures settled up 50 cents at $47.92 a barrel.
Gold eased on Friday to stay on track for its first monthly loss this year, as hints from leading central banks that the era of easy money may be coming to a close pushed bond yields higher, hurting the non-interest bearing metal.
Spot gold was down 0.3 percent at $1,241.41 an ounce by 2:34 p.m. EDT (1834 GMT), while U.S. gold futures for August delivery settled down 0.3 percent at $1,242.30.
