Market Roundup
•French Feb CPI NSA (MoM) 0.90% forecast, -0.20% previous
•French Feb CPI (MoM) 0.8%, 0.8% forecast,-0.3% previous
•French Feb CPI NSA (YoY) 3.00%,3.10% previous
•EU Feb Inflation (YoY) 2.70%, 2.90% previous
•French Feb HICP (YoY) 3.2%,3.1% forecast,3.4% previous
•French Feb French HICP (MoM) 0.9%,0.9% forecast,-0.2% previous
•Italian Feb CPI (MoM) 0.1%,0.1% forecast,0.3% previous
•Italian Feb Italian CPI Ex Tobacco (YoY) 0.8%,0.8% previous
Looking Ahead Economic Data(GMT)
• 12:30 Canada Jan Foreign Securities Purchases 2.05B forecast,10.44B previous
• 12:30 Canada Jan Foreign Securities Purchases by Canadians 29.40B previous
• 12:30 Canada Jan Wholesale Sales (MoM) -0.6% forecast,0.3% previous
• 12:30 US Mar NY Empire State Manufacturing Index -7.00 forecast,-2.40 previous
• 12:30 US Feb Import Price Index (MoM) 0.3% forecast,0.8% previous
• 12:30 US Feb Export Price Index (MoM) 0.2% forecast,0.8% previous
• 12:30 US Import Price Index (YoY) -1.3% previous
• 12:30 US Export Price Index (YoY)-7.0% forecast,-2.4% previous
•13:15 US Feb Manufacturing Production (MoM) 0.3% forecast,-0.5% previous
•13:15 US Feb Industrial Production (YoY) 0.03% previous
•13:15 US Feb Capacity Utilization Rate 78.5% forecast,78.5% previous
•13:15 US Feb Industrial Production (MoM) 0.0% forecast,-0.1% previous
•14:00 US Mar Michigan 5-Year Inflation Expectations 2.9% previous
•14:00 US Mar Michigan 1-Year Inflation Expectations 3.0% previous
•14:00 US Mar Michigan Consumer Sentiment 77.1 forecast,76.9 previous
•14:00 US Mar Michigan Current Conditions 79.2 forecast,79.4 previous
•14:00 US Michigan Consumer Expectations 75.1 forecast,75.2 previous
•17:00 U.S. Baker Hughes Oil Rig Count 504 previous
•17:00 U.S. Baker Hughes Total Rig Count 622 previous
Currency Forecast
EUR/USD: The euro edged higher against dollar on Friday after hotter than expected inflation figures from the U.S. hurt June rate-cut bets. Market participants are drawing relief from the recent slowdown in inflation in the euro zone, while remaining focused on upcoming economic data that could alter the rate-cut bets, as in the case of U.S. Thursday's heated U.S. producer price numbers followed consensus-topping consumer inflation in the world's largest economy, eroding expectations of a June Fed rate cut. Meanwhile, data showed consumer prices in France rose slightly more than initially expected year-on-year in February, while Italian EU-harmonised consumer prices were up 0.8% in February from the year earlier. The euro was up 0.2% to $1.0899. Immediate resistance can be seen at 1.0947 (23.6%fib), an upside break can trigger rise towards 1.0995(Higher BB).On the downside, immediate support is seen at 1.0871 (38.2%fib), a break below could take the pair towards 1.0803(50%fib).
GBP/USD: Sterling was set for its biggest weekly fall against the dollar since December on Friday, as investors looked ahead to a Bank of England (BoE) interest rate decision next week.The slide in the pound comes after a period of relative strength for the currency, which has gained this year on bets the BoE will keep rates higher for longer than its peers. Economic data this week showed Britain's housing market picked up in February, while the overall economy grew 0.2% in January from a month earlier, after slipping into recession in late 2023.The BoE is expected to keep rates on hold at 5.25% next Thursday, with market pricing favouring the BoE cutting rates slightly slower than the European Central Bank and Federal Reserve this year. Sterling was last broadly flat versus the dollar on the day at $1.27535 and was on track for a 1% weekly fall. Immediate resistance can be seen at 1.2828(23.6%fib), an upside break can trigger rise towards 1.2857(Higher BB).On the downside, immediate support is seen at 1.2715(38.2%fib), a break below could take the pair towards 1.2623(50%fib).
USD/CHF: The dollar steadied against the Swiss franc on Friday after hotter-than-forecast U.S. inflation knocked back bets for how soon and often the Federal Reserve will cut interest rates. Traders have cut the odds of the U.S. Federal Reserve, the world's most influential central bank, cutting rates in June to 60%, from about 67% late on Wednesday Ahead of the Fed's rate setting meeting next week, the market is now pricing in fewer than three U.S. rate cuts for 2024, down from three to four roughly two weeks ago and around seven late last year. U.S. borrowing costs are currently in a range of 5.25% to 5.5%, more than a two-decade high. Immediate resistance can be seen at 0.8849 (23.6%fib), an upside break can trigger rise towards 0.8870(Higher BB).On the downside, immediate support is seen at 0.8800(Psychological level), a break below could take the pair towards 0.8766(38.2%fib).
USD/JPY: The dollar strengthened against the yen on Friday ahead of a flurry of highly-anticipated central bank meetings next week, including of the U.S. Federal Reserve and Bank of Japan. The Bank of Japan is close to ending eight years of negative interest rate policy, with internal preparations for an exit in the works since Kazuo Ueda took office as BOJ governor, sources familiar with the bank's thinking have previously told Reuters. Japan's biggest companies agreed with labour unions to raise wages by the highest level in 33 years on Friday, reinforcing views that the country's central bank is poised to make a landmark shift away from negative interest rates. The yen eased to 148.725 per dollar and is on course for a 1.1% weekly decline, its steepest since January. Strong resistance can be seen at 148.98 (23.6%fib), an upside break can trigger rise towards 149.33(March 7th high).On the downside, immediate support is seen at 147.51 (38.2%fib), a break below could take the pair towards 146.82 (23.6%fib).
Equities Recap
European shares inched higher on Friday as hotter-than-expected consumer prices and producer prices data pointing to sticky inflation raising doubts about the timing of interest rate cuts.
UK's benchmark FTSE 100 was up by 0.14 percent, Germany's Dax was up by 0.53 percent, France’s CAC was up by 0.50 percent.
Commodities Recap
Gold prices firmed on Friday, but were on track for their first weekly drop in four over concerns that the Federal Reserve might defer interest rate cuts beyond June after data showed a higher-than-expected rise in inflation.
Spot gold rose 0.4% at $2,169.99 per ounce, as of 1035 GMT. U.S. gold futures edged 0.3% up at $2,174.20.
Oil prices edged lower on Friday but were on track to gain over 3% for the week, boosted by the International Energy Agency raising its 2024 oil demand forecasts and an unexpected decline in U.S. stockpiles.
Brent crude oil futures were down 59 cents or 0.6% to $84.83 a barrel at 1020 GMT, after topping $85 a barrel for the first time since November on Thursday. U.S. West Texas Intermediate (WTI) crude were down 56 cents or 0.6% to $80.70.
