- GBP/USD spike to 1.5400 overnight then swift return to 1.5484 levels.
- USD/JPY plays from 119.25 to 118.91 then back to 119.20 levels.
- Euro zone August Trade Balance bln vs bln previous.
- Euro zone August Euro stat NSA Trade Balance E11.2bln vs E31.4 bln.
- Euro zone September final inflation -0.1% y/y vs -0.1% previous.
- Euro zone September Inflation ex-food/energy +0.8% y/y vs 0.9% previous, 0.9% expected.
- Cleveland Fed Mester - Renews call for US rate hike, economy can handle it.
- BOJ's Kuroda - House hold sector in positive cycle supports gradual econ recovery.
- SSEC closes up 1.6% at 3391.35.
- (0830 ET/1230 GMT) Canadian manufacturing sales data.
- (0915 ET/1315 GMT) US September industrial output, -0.2% m/m eyed; last -0.4%.
- (0915 ET/1315 GMT) US September capacity utilization, 77.4% eyed; last 77.6%.
- (1000 ET/1400 GMT) US August JOLTS job openings, 5.63 mln eyed; last 5.75 mln.
- (1000 ET/1400 GMT) US Oct UOM sentiment index - prelim, 89.0 eyed; last 87.2.
- (1600 ET/2000 GMT) Treasury department will release a report on Treasury international capital for August.
Key Events Ahead
- (0345 ET/1345 GMT) Fed Trade operation 15-year Fannie Mae / Freddie Mac (max $525mln).
- (1200 ET/1600 GMT) Treasury releases primary dealer meeting agenda.
FX Recap
The dollar was steady after recovering from a 7-week low on Friday after better-than-expected U.S. inflation data and on increasing expectations of more euro zone easing. The dollar index was trading 0.2 percent higher on Friday at 94.536. The euro was 0.2 percent down at $1.13715.
EUR/USD: Prices in the euro area showed negative growth for the first time since March in September, Euro stat confirmed in the final reading on Friday, sending yet another signal to the European Central Bank (ECB) that the ongoing stimulus program might not be enough to boost the economy. The CPI in the 19-nation bloc dropped 0.1% on an annual basis during the ninth month of the year, following the 0.1% hike seen in August. It made intraday high at 1.1394 and low at 1.1334 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels. Option expiries are at 1.1300 (578M), 1.1350/60 (322M), 1.1400 (1B), 1.1425 (593M).
USD/JPY: The greenback was trading higher on Friday, as the US inflation figures surprised on the upside on Thursday, raising hopes for the Federal Reserve to step in and raise the interest rates in the world's largest economy. At the same time Japan's industrial production sorely disappointed. Looking ahead, the dollar-yen pair will continue to track the broader market sentiment ahead of the crucial US prelim consumer sentiment and industrial production data which will wrap up this eventful week. Pair made intraday high at 119.24 and low at 118.83 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 118.50 (640M), 118.65-75 (540M), 120 (1.2B).
GBP/USD: Sterling rose towards 3-week highs against the dollar and was on track for its third straight week of gains, underpinned by expectations that the BoE will eventually tighten monetary policy in coming months. It was up 0.3 percent at $1.5474, having hit a high of $1.5508 on Thursday, its highest since Sept. 22. The euro was steady at 73.52 pence. Pair made intraday high at 1.5486 and low at 1.5434 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: The New Zealand dollar traded weaker against the greenback on Friday after markets had a chance to digest the latest inflation figures, which showed little sign of domestic price pressures. The CPI was up 0.3% in the September quarter, coming in slightly higher than the 0.2% rise forecast by markets, which kept the annual change in inflation steady at 0.4%. However, non-tradable inflation was unchanged over the three-month period, and rose at the weakest annual pace in almost 14 years. Pair made intraday high at 0.6885 and low at 0.6784 levels. Initial support is seen at 0.6235 and resistance at 0.6721 levels. Option expiry is at 0.6850 (254M).
AUD/USD: The Australian dollar traded in negative territory against its US namesake on Friday, after the country's central bank issued its Financial Stability Review that pointed to higher risks in housing and mortgage markets. The central bank added that risks growing in the commercial property sector were due to investor demand, while regulators are seeking a "permanently stronger" level of bank lending standards. Aussie fell 0.60% and traded at $0.7280 against the US dollar, hovering around the freshly hit intraday low. Pair made intraday high at 0.7337 levels and low around 0.7268 levels. Initial support is seen at 0.6908 and resistance at 0.7438 levels. Option expiries are at 0.7200 (437M), 0.7300 (331M), 0.7400 (723M).
Equity Recap
Global shares rebounded on Friday, following Asian and U.S. stock indexes higher after stronger U.S. data relieved fears about global growth and stocks to two-month highs.
The pan-European FTSEurofirst 300 increased by 0.9 percent and recoup losses made earlier in the week after weak data from China.
Japan's Nikkei Average closed up 1.08 pct at 18,291.80, MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.2 percent higher. China's CSI300 index inched up 5.8 pct for the week recorded best performance since early June, similarly, Shanghai composite index rose 6.5 pct for the week.
Commodities Recap
Oil prices remained stable on Friday, snapping a week-long decline as investors closed positions at the end of a volatile week that saw prices slide nearly 10 percent on renewed signs a global supply glut was here to stay. U.S. crude rose by 1.3 percent to $46.98 a barrel, after shedding 0.6 percent on Thursday. Brent added 0.9 percent to $50.17.
Gold fell as a recovering dollar pulled prices from 3-1/2 month highs, but doubts over whether the US Fed will press ahead with a U.S. rate rise this year kept the metal on track for a second weekly rise. Spot gold was down 0.5 percent at $1,176.83 an ounce at 0930 GMT, while U.S. gold futures for December delivery were down $10.60 an ounce at $1,176.90.
Treasury Recap
US Treasury yields stood at 2.0104, down 0.011 pct.
JGB prices ended the day steady to slightly higher from yesterday's afternoon close in quiet trading ahead of the weekend. JGB yields moved in a very narrow range of 0.5bp or less across the curve amid a lack of the BoJ's JGB buying operations.
U.K. Gilts opened unchanged from the settlement of 119.10 and has turn in the middle of a narrow 20 tick trading range. Yesterday's trading range on 10-year cash yields of 1.74% to 1.80% could well remain intact in this data free run into the weekend.
New Zealand government bonds had a soft tone with yields 2.5 basis points higher along the curve.
Australian government bond futures fell, with the 3-year bond contract off 3 ticks at 98.200. The 10-year contract eased 5 ticks to 97.3600, while the 20-year contract also shed 5 ticks to 96.8300.
