Market Roundup
•Japan PPI (YoY) (Apr) 4.9%, 3.0% forecast, 2.9% previous
•Japan Machine Tool Orders (YoY) (Apr) 45.1%, 28.1% forecast, 24.2% previous
Looking Ahead Economic Data (GMT)
• 09:00 Italian CPI Ex Tobacco (YoY) (Apr) 1.5% previous
• 09:00 Italian CPI (MoM) (Apr) 1.2% forecast, 0.5% previous
• 09:00 Italian CPI (YoY) (Apr) 2.8% forecast, 1.7% previous
• 09:00 Italian HICP (YoY) (Apr) 2.9% forecast, 1.6% previous
• 09:00 Italian HICP (MoM) (Apr) 1.7% forecast, 1.7% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Summaries
EUR/USD : The euro dipped on Friday as rising energy prices and prolonged disruptions to shipping stoked inflationary pressures, boosting bets on a Federal Reserve rate hike this year.Markets were also keeping a close eye on the second day of a high-stakes summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping, with Trump seeking economic wins from Beijing against the backdrop of the Iran war.The U.S. summary of the talks focused on the leaders' shared desire to reopen the key waterway of the Strait of Hormuz, which Iran has effectively shut since the war began late in February, and Xi's apparent interest in buying American oil to reduce China's dependence on Middle East supplies.Market reaction to the talks has so far been muted as investors awaited more details. Immediate resistance can be seen at 1.1666(50%fib), an upside break can trigger rise towards 1.1727(SMA 20).On the downside, immediate support is seen at 1.1547(38.2%fib), a break below could take the pair towards 1.1501(April 67th low).
GBP/USD: Sterling slipped on Friday amid growing political uncertainty in the UK and renewed tensions surrounding Middle East peace efforts. Confidence in Prime Minister Keir Starmer weakened further after the resignation of Health Minister Wes Streeting. Investors remain mindful of the 2022 market turmoil during former Prime Minister Liz Truss’s tenure and are assessing whether any potential successor to Starmer could adopt looser fiscal policies.On the economic front, data released on Thursday showed Britain’s economy unexpectedly expanded in March, capping a solid first quarter and indicating the economy was in better shape than many had feared after near-stagnation in the final quarter of last year. Immediate resistance can be seen at 1.3414(Daily high), an upside break can trigger rise towards 1.3475(38.2%fib).On the downside, immediate support is seen at 1.3321(38.2%fib), a break below could take the pair towards 1.3154(23.6%fib).
AUD/USD: Australian dollar slipped lower on Friday as the U.S. dollar gained ground on expectations of a Federal Reserve rate hike later this year.The dollar rally has been gathering pace all week, on the back of evidence that domestic inflation is mounting while the U.S. economy remains resilient despite the ongoing Middle East conflict.Data on Thursday showed U.S. retail sales increased further in April while weekly initial jobless claims figures pointed to stability in the labour market.Investors are now pricing in just over a 44% chance that the Fed could raise rates in December, compared to a 22.5% chance a week ago, according to the CME FedWatch tool. Immediate resistance can be seen at 0.7191(SMA 20), an upside break can trigger rise towards 0.7270(23.6%fib).On the downside, immediate support is seen at 0.7155(38.2%fib), a break below could take the pair towards 0.7112(Lower BB).
USD/JPY: The U.S. dollar firmed on Friday as greenback firmed as mounting inflationary pressures from higher energy prices fuelled bets of a Federal Reserve rate hike this year.Data on Thursday showed U.S. retail sales increased further in April while weekly initial jobless claims figures pointed to stability in the labour market.The greenback's strength pushed the yen to the weaker side of 158 per dollar and kept traders on alert for further intervention from Tokyo.Japan’s wholesale inflation hit a three-year high in April as the Iran war drove up oil and chemical prices, boosting expectations of a BOJ rate hike soon. The data came after a Bank of Japan (BOJ) policymaker called for raising rates "at the earliest stage possible" as soaring fuel costs from the Middle East war stoked price pressures.Immediate resistance can be seen at 158.58(38.2%fib) an upside break can trigger rise towards 159.00(Psychological level) .On the downside, immediate support is seen at 157.42(Daily low) a break below could take the pair towards 156.84(50%fib ).
Equities Recap
Asian shares dived on Friday as investor euphoria over tech stocks gave way to inflation fears that saw Treasury yields spike to one-year highs and rising bets on a U.S. rate hike this year.
Japan’s Nikkei 225 was down by 1.76% , Hang Seng was down at 1.83%, China A50 was down at 1.40%
Commodities Recap
Gold prices fell on Friday and headed for a weekly loss as rising energy prices lifted inflation concerns and supported higher-for-longer rate expectations ahead of the U.S.-China summit.
Spot gold extended losses for a fourth consecutive session, and was down 0.6% at $4,619.61 per ounce by 0411 GMT, its lowest point since May 6. Bullion has lost 2% so far this week.
Oil prices rose more than 1% after President Donald Trump said he was losing patience with Iran, while concerns over ship attacks and seizures in the Strait of Hormuz continued despite Tehran saying around 30 vessels had passed through the waterway.
Brent crude oil futures rose $1.32, or 1.25%, to $107.04 a barrel by 0425 GMT, while U.S. West Texas Intermediate futures were up $1.33, or 1.31%, to $102.50.
