Market Roundup
- Short-term yields edge up as Fed rate hike expectations increase.
- Gold edges up, set to snap 7-week losing streak.
- Euro working group recommends 23 billion euro initial tranche to Greece.
- Eurogroup chief Dijsselbloem says Greek debt sustainability a concern.
- Germany's Schaeuble says confident of agreement on Greece, commitment of IMF is essential.
- Canadian factory sales up for second month in June.
- Mexico to trim 2016 budget further due to weak oil output.
- Brazil's Tombini says inflation peaking, confidence to improve, must remain vigilant on inflation.
- US PPI ExFood/Energy MM Jul 0.3%, f/c 0.1%, 0.3%-previous.
- US Industrial Output MM Jul 0.6%, f/c 0.3%, 0.1%-previous.
- US Manufacturing Output MM Jul 0.8%, f/c 0.4%, -0.3%-previous.
- US U Michigan Sentiment Prelim Aug 92.9, f/c 93.5, 93.1-previous.
- US Manufacturing Sales MM Jun 1.2%, f/c 2.1%, 0.2%-previous.
- Gold edges up, set to snap 7-week losing streak.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan GDP QQ Q2 f/c -0.5%, 1%-previous
- 23:50 Japan GDP QQ Annualised Q2 f/c -1.9%, 3.9%-previous
- 23:50 Japan GDP QQ Pvt Consumption Prelim Q2 f/c -0.4%, 0.4%-previous
- 23:50 Japan GDP QQ Capital Expend. Q2 f/c -0.1%, 2.7%-previous
- 23:50 Japan GDP QQ External Demand Q2 f/c -0.3%, -0.2%-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is supported at 1.1070 levels and currently trading at 1.1115 levels. The pair has made session high at 1.1190 and hit lows at 1.1093 levels. The dollar trimmed losses against Euro early on Friday as U.S. producer prices data released, during the early hours in the US session, hinted some pickup in inflation, which may allow the Federal Reserve to raise interest rates by year-end. The U.S. Labor Department said on Friday, producer prices grew 0.2 percent last month, stronger than the 0.1 percent rise forecast by economists. The euro was trading around 1.1180 levels, in the early hours of New York session , after the data release the pair slipped to hit 1.1100 levels, euro almost conceded 90 pips to dollar to trade at 1.1112 in the late American hours. Meanwhile, Euro zone finance ministers agreed on Friday to launch a third bailout programme for Greece. Belgian Finance Minister said, they had agreed to a Memorandum of Understanding drafted by institutional negotiators on Tuesday, with some additional measures. The meeting ended after some six hours of talks following the endorsement of the loan conditions by the Athens parliament. To the upside, immediate resistance can be seen at 1.1145. To the downside, immediate support level is located at 1. 1090 levels.
GBP/USD is supported in the range of 1.5600 levels and currently trading at 1.5648 levels. It reached session high at 1.5656 and dropped to session low at 1.5600 levels. Sterling inched higher against the dollar on Friday, as investors refocused on the prospect of the Bank of England raising interest rates in the coming months, after fears of a China-led global "currency war" subsided. Earlier in US session, the pound declined after, Macro economic data was released from US market, showed producer prices increased for a third straight month, and industrial production rose at its strongest pace in eight months. The pound declined from 1.5646 to hit daily lows at 1.5600 levels, after the market cooled down from the impact of the news, the pound inched higher after a poll released on Thursday showed economists still expected a rate hike early next year, but conviction was wavering. The pound was trading around 0.2 percent up against the dollar at $1.5646 during late US session on Friday. To the upside, immediate resistance can be seen at 1.5660. To the downside, immediate support level is located at 1.5660 levels.
USD/JPY is supported around 124.08 levels and currently trading at 124.26 levels. It peaked to hit session high at 124.37 and made session lows at 124.04 levels. The pair jumped from 124 levels to erase earlier losses after series of economic data was released from US market. In July, U.S. producer prices increased for a third straight month, and industrial production rose at its strongest pace in eight months, government data released on Friday showed. These improved figures were mitigated by surprise deterioration in U.S. consumer sentiment as measured by University of Michigan in early August, still Friday's economic readings kept in play bets the Fed will end its near zero interest rate policy by year-end. Japanese yen gains faded as the greenback strengthened after the latest U.S. data. Not much upside movements was there for USD/JPY after US data, as this pair traded in very choppy range in the week end squaring between 124.04 to 124.40 levels. To the upside, immediate resistance can be seen at 124.47. To the downside, immediate support level is located at 124.00 levels.
USD/CAD is likely to find support at 1.3045 levels and is trading at 1.3094 levels. It has made intraday high at 1.3094 and lows at 1.3015 levels. The greenback firmed against the Canadian dollar on Friday, recouping earlier losses as investors digested data from the United States and Canada, and as calm returned to markets following a volatile trading week. In Canada, manufacturing sales jumped in 1.2 percent in June, the biggest gain since March and a welcome sign of economic activity following an overall lackluster first half of the year. The U.S. dollar pared losses against a basket of key counterparts following U.S. producer price data for July that showed signs of some pickup in inflation, which added to market expectations that, Federal Reserve could be hiking interest rates as early as next month. The currency stayed within a narrow trading range, however, between C$1.3031 and C$1. manufacturing sales jumped in June on increased sales of chemical products and motor vehicles, data from Statistics Canada showed on Friday, providing a welcome sign of activity in the economy at the end of the second quarter. To the upside, immediate resistance can be seen at 1.3100. To the downside, immediate support level is located at 1.3045 levels.
Equities Recap
European stock ended volatile week on negative note on Friday, hurt by negative Eurozone GDP figures. UK's benchmark FTSE 100 closed, down by 0.1 percent, the pan-European FTSEurofirst 300 closed, down by 0.1 percent, Germany's Dax closed, down by 0.2 percent, France's CAC closed, down by 0.5 percent, Italy's FTSE MIB closed, down by 0.5 percent. Meanwhile, Spain's IBEX 35 was down by 0.7 percent at close.
US stocks ended the week slightly higher on Friday, backed by positive economic data. Dow Jones closed, up by 0.41 percent, S&P 500 closed, up by 0.40 percent, Nasdaq closed, up by 0.29 percent.
Treasuries Recap
Short-term U.S. Treasuries yields rose on Friday, helped by a third straight monthly gain in U.S. producer prices that brightened odds for a Federal Reserve interest rate hike as soon as September.
Five-year Treasuries, which are one of the shorter maturities most affected by Fed rates policy shifts, were off 2/32 and yielding 1.5871 percent. The long bond, in contrast, was up 13/32 in price and yielding 2.8361 percent.
The benchmark 10-year Treasury was flat in price and yielding 2.1854 percent.
Commodities Recap
U.S. crude oil edged higher after falling to a fresh 6-1/2-year low on Friday, posting a seventh weekly loss amid concerns over global oversupply, while Brent futures slipped as the front-month September contract approached expiration.
U.S. September crude settled at $42.50 a barrel, up 27 cents, and continued to seesaw in post-settlement trade. It reached $42.96 after falling to $41.35, the lowest front-month price since March 2009, and finished off more than 3 percent for the week.
Expiring Brent September crude fell 19 cents to settle at $49.03, but gained nearly 1 percent for the week, snapping a string of six weekly losses. Brent prices are well above the 2015 low of $45.19 from January, despite its recent slide.
Gold turned slightly lower on Friday as the dollar shifted higher on encouraging U.S. data and as investors weighed the impact of China's currency intervention on the timing for the first U.S. interest rate increase in nearly a decade.
Spot gold was down 0.2 percent at $1,112.36 an ounce by 2:05 p.m. EDT (1805 GMT) after hitting $1,126.31 on Thursday, its highest since July 20.
U.S. gold for December delivery settled down 0.3 percent at $1,112.70 an ounce.
