Market Roundup
•US Jul Import Price Index (MoM) -1.4% ,1.0% forecast, 0.2%previous
•US Jul Export Price Index (MoM) -3.3%,-1.1% forecast, 0.7% previous
•US Aug Michigan 5-Year Inflation Expectations 3.00%,2.90% previous
•US Michigan Consumer Expectations 54.9, 48.4 forecast, 47.3 previous
•US Aug Michigan Inflation Expectations 5.0%,5.2 previous
•US Aug Michigan Consumer Sentiment 55.1,52.5 forecast,51.5 previous
•US Aug Michigan Current Conditions 55.5, 59.0 forecast, 58.1previous
•U.S. Baker Hughes Oil Rig Count 601,598 previous
•U.S. Baker Hughes Total Rig Count 763 ,764 previous
Looking Ahead – Economic data (GMT)
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Looking Ahead - Events, Other Releases (GMT)
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Fxbeat
EUR/USD: The euro declined on Friday as markets digested a new round of hawkish remarks from policy makers at the U.S. Federal Reserve, helping the dollar regain some of its losses from earlier in the week. Market participants have toned down expectations of an aggressive rate hike by the Fed after cooler-than-expected inflation data released earlier this week. However, recent comments by some Fed officials continue to highlight a hawkish tilt. Fed’s Mary Daly said on Thursday that while a half-percentage-point interest rate hike in September makes sense, she is open to the possibility of a bigger hike. The euro was down 0.52% at $1.0255. Immediate resistance can be seen at 1.0322(38.2%fib), an upside break can trigger rise towards 1.0412(23.6%fib).On the downside, immediate support is seen at 1.0247(50%fib), a break below could take the pair towards 1.0217(14DMA).
GBP/USD: Sterling declined against dollar on Friday after data showed Britain's economy contracted in June, even if not by as much as had been feared. The Office for National Statistics said gross domestic product fell by 0.6% in June, the biggest contraction since January 2021 but less severe than the 1.3% drop predicted by a poll of economists. The month unusually contained two bank holidays to celebrate Queen Elizabeth's Platinum Jubilee but most of the drag on GDP in June came from the winding-down of coronavirus-related health services. The pound tumbled 0.58% against the dollar to $1.2131. Immediate resistance can be seen at 1.2153(11DMA), an upside break can trigger rise towards 1.2183(38.2%fib).On the downside, immediate support is seen at 1.2097(50%fib),a break below could take the pair towards 1.2007(61.8%fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Friday as oil prices fell, but the currency still notched its biggest weekly gain this year as signs of U.S. inflation peaking eased worries of aggressive tightening by the Federal Reserve. The price of oil, one of Canada's major exports, has also rallied this week but gave back some of those gains on Friday. U.S. crude prices fell 1.8% to $92.62 a barrel.Canada's inflation report for July is due on Tuesday, which could offer clues on the Bank of Canada policy outlook. Money markets expect the central bank to raise rates by an additional half a percentage point in September. The loonie was trading 0.1% lower at 1.2775 to the greenback, easing back from a two-month high on Thursday at 1.2725.Immediate resistance can be seen at 1.2793 (5 DMA), an upside break can trigger rise towards 1.2815 (38.2%fib).On the downside, immediate support is seen at 1.2736(50%fib), a break below could take the pair towards 1.2717 (Lower BB).
USD/JPY: The dollar strengthened against yen on Friday worries over further rate hikes from the U.S. Federal Reserve boosted greenback.U.S. inflation figures on Wednesday and Thursday were lower than expected, boosting riskier assets such as equities and the dollar, as markets interpreted the data as indicating the Fed could be less aggressive in rate hikes. But Fed officials made clear they would continue to tighten monetary policy. San Francisco Federal Reserve Bank President Mary Daly said on Thursday she was open to the possibility of another 75 basis point (bp) hike in September to fight too-high inflation. The yen lost out to the dollar's strength, with the U.S. unit up 0.5% against the Japanese currency at 133.46 . Strong resistance can be seen at 133.54(11DMA), an upside break can trigger rise towards 134.05(38.2%fib).On the downside, immediate support is seen at 132.92(50%fib), a break below could take the pair towards 131.79 (61.8%fib).
EquitiesRecap
European stocks closed higher on Friday, gaining for a third successive session, as soft consumer price and producer price inflation data from the U.S. continued to support sentiment.
The UK's benchmark FTSE 100 was last trade date up by 0.47 percent, Germany's Dax ended up by 0.73 percent, and France’s CAC finished the up by 0.14 percent.
Wall Street closed higher on Friday as signs that inflation may have peaked in July increased investor confidence that a bull market could be under way and spurred the S&P 500 and the Nasdaq to post their fourth straight week of gains..
Dow Jones closed up at 1.27 percent, S&P 500 ended up 1.73 percent, Nasdaq finished the day up by 2.29 percent.
Treasuries Recap
U.S. Treasury yields dipped on Friday after a volatile week as investors evaluated whether an apparent slowdown in inflation increases could reduce the speed of Federal Reserve interest rate hikes.
Benchmark 10-year note yields US10YT=RR dipped five basis points to 2.839%, after reaching 2.902% on Thursday, the highest since July 22. Two-year note yields US2YT=RR fell six basis points to 3.174%.
Commodities Recap
Gold prices drifted higher on Friday helped by a drop in U.S. Treasury yields and setting the metal on path for a fourth straight week of gains, as investors took stock of the recent inflation data out of the United States.
Spot gold rose 0.5% to $1,798.86 per ounce by 1800 GMT and was headed for a more than 1% weekly rise. U.S. gold futures also settled up 0.5% at $1,815.5.
Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.
Brent crude futures fell $1.45, or 1.5%, to settle at $98.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.25, or 2.4%, to settle at $92.09 a barrel. Both contracts gained more than 2% on Thursday.
