Market Roundup
• US Non-Farm Aug 156K, 180K forecast, 189k previous.
• US Private Payrolls Aug 165k, 179k forecast, 202k previous.
• US Unemployment Rate Aug 4.4%, 4.3% forecast, 4.3% previous.
• US Average Earnings MM Aug 0.1%, 0.2% forecast, 0.3% previous.
• US Markit Mfg PMI Final Aug 52.8, 52.5 previous.
• US Construction Spending MM Jul -0.6%, 0.5% forecast, -1.3% previous.
• US ISM Manufacturing PMI Aug 58.8, 56.5 forecast, 56.3 previous.
• US U Mich Sentiment Final Aug 96.8, 97.4 forecast, 97.6 previous.
• US U Mich Conditions Final Aug 110.9, 111.0 forecast, 111.0 previous.
• Atlanta Fed pares US Q3 GDP growth view to 3.2%.
• NY Fed raises US Q3 GDP growth view above 2%.
• Traders see next Fed rate hike in mid-2018.
• Harvey seen disrupting US factory sector near term - ISM's Fiore.
• NAFTA talks kick off in Mexico City, clouded by Trump threats.
• Kenyan assets drop after the court declares election result invalid.
• Brazil GDP grows stronger-than-expected 0.2 pct in the second quarter.
• Chile central bank divided on August rate hold.
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Business Inventories QQ Q2 0.4% forecast, 1.2% previous (Sep 4)
• 01:30 Australia Gross Company Profits QQ Q2 -4.0% forecast, 6.0% previous (Sep 4)
Looking Ahead - Events, Other Releases (GMT)
• No Major Events
Currency Summaries
EUR/USD is likely to find support at 1.1794 levels and currently trading at 1.1866 levels. The pair has made session high at 1.1978 and hit lows at 1.1848 levels. Euro declined against the dollar in the US session on Friday as the dollar rebounded from earlier losses after U.S. jobs data was seen as sufficiently strong to support the possibility of another interest rate increase from the Federal Reserve this year. Traders initially sold the dollar in a knee-jerk reaction to Labor Department data showing nonfarm payrolls increased by 156,000 last month, below expectations of economists for a gain of 180,000. The Federal Reserve is expected to announce plans to pare its balance sheet at its September meeting, with an interest rate hike in December also viewed as possible. The euro last down 0.4 percent at $1.1866 after briefly hitting a session high of $1.1979. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.1 percent at 92.801 after initially plunging 0.5 percent. The dollar index was set to gain just 0.1 percent for the week after posting its biggest percentage decline in more than a month, of 0.7 percent, last week.
GBP/USD is supported in the range of 1.2900 levels and currently trading at 1.2950 levels. It reached session high at 1.2995 and dropped to session low at 1.2939 levels. Sterling rose against the dollar on Friday as pound was boosted by a stronger-than-expected business sentiment survey as well as a forecast-lagging U.S. non-farm payrolls report that knocked the dollar down. The pound briefly looked as if it were set to top $1.30 after the U.S. numbers were published, jumping half a cent to $1.2995, its strongest since Aug. 14. But the dollar did recover a little after the numbers, with the pound slipping back, trading at around $1.2950 by 1900 GMT. That still left it up 0.1 percent on the day and came after a month in which it slipped 2.5 percent against the dollar, its worst month since October. Earlier, a purchasing managers' index survey showed Britain's factory activity grew a lot more strongly than expected in August as work flowed in from home and abroad, suggesting the economy might be picking up speed after a slow first half of 2017.That comes, however, after growing nerves around the Brexit process helped drive the pound's biggest monthly fall in trade-weighted terms since last October.
USD/CAD is supported at 1.2300 levels and is trading at 1.2392 levels. It has made session high at 1.2492 and lows at 1.2337 levels. The Canadian dollar rose to hit a 2-year high against its U.S. counterpart on Friday after monthly U.S. job growth slowed more than expected and chances of a Bank of Canada interest rate hike next week approached a coin toss. The U.S. Labor Department said nonfarm payrolls rose by 156,000 in August, which should allow the Federal Reserve to announce a plan to start trimming its massive bond portfolio this month. But an anemic gain in wages may make the central bank cautious about raising rates again this year. In contrast, chances of a Bank of Canada rate hike as soon as next week rose to nearly 50 percent. The probability was around 20 percent before data on Thursday showed Canada's economy expanding in the second quarter at its fastest pace in nearly six years. Gains for the loonie came even as oil prices slipped in the wake of Hurricane Harvey, which has killed more than 40 people and brought record flooding to the oil heartland of Texas, paralyzing a quarter of the U.S. refining industry. The Canadian dollar was trading at C$1.2393 to the greenback, or 80.66 U.S. cents, up 0.7 percent.
USD/JPY is supported around 109.50 levels and currently trading at 109.20 levels. It peaked to hit session high at 110.46 and made session lows at 109.55 levels. The U.S. dollar strengthened against the yen on Friday as the dollar strengthened after U.S. jobs data was seen as decent enough to support the possibility of another interest rate increase from the Federal Reserve this year. U.S. job growth slowed more than expected in August after two straight months of hefty increases, but the pace of gains should be more than enough for the Federal Reserve to announce a plan to start trimming a massive bond portfolio accumulated as it sought to bolster the economy. Persistently sluggish wage growth could, however, make the U.S. central bank cautious about raising interest rates again this year. The Labor Department said on Friday nonfarm payrolls increased by 156,000 last month. The economy created 399,000 jobs in June and July. The dollar was last trading up 0.3 percent against the yen at 110.24 yen after slumping to a session low of 109.55 yen just after the jobs data.
Equities Recap
European shares started September on a firm footing on Friday after three months of losses as industrials rose and an update from Vivendi boosted media stocks.
UK's benchmark FTSE 100 closed up by 0.24 percent, the pan-European FTSEurofirst 300 ended the day up by 0.68 percent, Germany's Dax ended up by 0.74 percent, France’s CAC finished the day up by 0.76 percent.
Wall Street gained on Friday as a tepid U.S. jobs report did little to change bets for another interest rate hike this year, while investors were on track to kick off a typically dour month for stocks on a positive note.
Dow Jones closed up by 0.17 percent, S&P 500 ended down 0.19 percent, Nasdaq finished the day up by 0.09 percent.
Treasuries Recap
U.S. Treasury yields rose on Friday as strong manufacturing data boosted sentiment that economic growth is solid, even after the August jobs report was weaker than economists expected.
Benchmark 10-year yields fell to 2.10 percent in the immediate aftermath of the jobs data. They rose to 2.16 percent after the strong manufacturing figures.
Commodities Recap
Gold rose to the highest in nearly 10 months on Friday after U.S. job growth slowed more than expected in August, but pared gains when investors judged that the figures were unlikely to change the outlook for U.S. interest rate rises.
Spot gold was up 0.2 percent at $1,324.46 an ounce by 1:59 p.m. EDT (1759 GMT) after reaching $1,328.80, the highest since Nov. 9. It was set for a weekly gain of 2.6 percent.
U.S. gold futures settled up 0.6 percent at $1,330.40. On Monday, The U.S. metals futures markets will shut early for the U.S. Labor Day holiday.
Benchmark U.S. gasoline prices slid for the first day since Hurricane Harvey struck the U.S. oil industry heartland, as some refineries restarted operations, but oil prices slid further.
U.S. gasoline hit a two-year high above $2 a gallon. On Friday, as two refineries began to restart and some ports reopened, gasoline futures fell 2 percent and the crack spread fell more than 5 percent.
Brent crude for November was 36 cents lower at $52.50 a barrel by 12:53 EDT (1653 GMT). The Brent contract for October, which expired on Thursday, closed up $1.52 at $52.38.
