Market roundup
• US Industrial production falls (-0.6% v -0.1% forecast), Manufacturing production weak as well (-0.3% v 0.1% forecast) signals weak Q1 GDP growth; mining utility production fall sharply.
• U of Mich Apr 89.7 vs final Mar 91.0, lowest read since September ’15, 1-yr inflation steady at 2.7%.
• G20: to refrain from competitive devaluation, won’t target fx for competitive purposes, Global growth remains modest & uneven, will consult closely on fx market.
• G20: warns of Brexit shock to global economic growth.
• Fed’s Evans: sobering experience of Japan & EZ means Fed should do all it can to avoid similar outcome, hike could be appropriate in Jun or a little later.
• ECB’s Draghi: sees no evidence of asset bubbles from ultra-low rates, EZ area outlook uncertain.
• ECB’s Nowotny: Doesn’t see further oil declines, sees stronger inflation in mid-year.
• Germany’s Schaeuble/ECB’s Weidmann: no reason for excessive nervousness w/respect to global economy.
• NY Fed Nowcast sees US GDP +0.8% in Q1, +1.2% in Q2 ’16.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand CPI QQ Q1 forecast 0.1%, -0.5%-previous
• 22:45 New Zealand CPI YY Q1 forecast 0.4%, 0.1%- previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia- Reserve Bank of Australia will release the minutes of its April monetary policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1235 levels and currently trading at 1.1288 levels. The pair has made session high at 1.1316 and hit lows at 1.1269 levels. The U.S. dollar declined against euro on Friday as risk aversion due to soft U.S. consumer sentiment and decline in oil prices ahead of producers meet in Doha helped euro gain against US dollar as Investors took refuge in safe heaven assets. An underwhelming U.S. consumer sentiment report on Friday also weighed on the dollar and dampened tolerance for risk. The University of Michigan survey of consumer sentiment showed a preliminary reading of 89.7 for April, compared with a forecast of 92. The dollar index slipped 0.2 percent after the U.S. currency had gained more than 1 percent against both the yen and the euro earlier this week. The euro rose 0.2 percent to $1.1284 ,rising after three consecutive days of losses.
GBP/USD is supported in the range of 1.4145 currently trading at 1.4204 levels. It reached session high at 1.4241 and hit low at 1.4150 levels. The Sterling rose on Friday, putting strong performance against greenback to hit 2-day high, as the sterling got a lift as risk appetite improved, giving the Brexit-rattled currency some respite at the end of a fourth straight week of losses. The pound has been on downward path since the end of last year by worries that Britain will vote to leave the European Union in a referendum on June 23. Any sign that a Brexit is becoming more likely cause it to fall. Data recently showed Britain's current account deficit grew to 7 percent of GDP in the final quarter of 2015, a reminder of how exposed Britain would be if foreign investors are deterred by a decision to quit the EU, a so-called Brexit.
USD/CAD is supported at 1.2777 levels and is trading at 1.2840 levels. It has made session high at 1.2900 and lows at 1.2791 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as investor optimism was boosted by stronger-than-expected Canadian jobs data and a rally in oil prices. The economy created 40,600 jobs in March, far surpassing economists' expectations for 10,000, and driven by a 35,300 increase in full-time jobs. The unemployment rate declined to 7.1 percent, its lowest since December. Meanwhile, Canadian manufacturing sales tumbled far more than expected in February, data from Statistics Canada showed on Friday, retreating from recent gains and dampening expectations for growth in the month. Sales fell 3.3 percent, outstripping economists' forecasts of a decline of 1.5 percent and breaking a three-month run of gains. Volumes fell 2 percent. The currency's weakest level was C$1.3155, while it touched its strongest since March 31 at C$1.2952.
AUD/USD is supported around 0.7660 levels and currently trading at 0.7720 levels. It hit session high at 0.7730 and made session lows at 0.7680 levels. The Australian dollar surged higher against US dollar on Friday to reach multi-month peaks against the greenback after better than data from China fortified risk appetite. The Australian dollar rose to $0.7714, near a 10-month summit of $0.7737 touched on Thursday. It has gained more than 2 cents this week, in part after the domestic jobless rate fell to 5.7 percent, the lowest since late 2013. Aussie was boosted after data showed China's economy grew 6.7 percent in the first quarter, from a year earlier, assuaging bears who had been worried about strength in the Asian giant.
Equities Recap
European shares fell on Friday with French car parts maker Faurecia leading automakers down, although a key regional index still ended the week with its best performance in two months.
UK's benchmark FTSE 100 closed down by 0.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.30 percent, Germany's DAX ended down by 0.4 percent, France’s CAC finished the day down by 0.4 percent.
Wall Street slipped on Friday as oil price declines weighed on energy shares and Apple dragged on the market, but major indexes were still poised to post weekly gains.
Dow Jones closed down by 0.18 percent, S&P 500 ended up by 0.11 percent, Nasdaq finished the day down by 0.16 percent.
Treasuries Recap
U.S. Treasury yields fell on Friday after disappointing consumer sentiment and industrial output data combined with lower oil and stock prices and a weaker dollar to stoke demand for government debt.
Benchmark 10-year Treasury prices rose 9/32 for a yield of 1.748 percent, down more than 3 basis points from late Thursday. The 10-year yield hit a session low of 1.740 percent.
Commodities Recap
Oil prices fell on Friday in subdued trade as traders and analysts anticipate a weekend meeting of major oil exporters to do little to help to clear global oversupply quickly, even though it would provide a floor for the market.
Brent crude futures settled down 74 cents at $43.10 while U.S. crude ended down $1.14 cents at $40.36. Both contracts lost more than 3.5 percent earlier in the day.
Gold weakened on Friday as strength in equities prompted investors to cash in some of the previous day's gains, remaining on track for its biggest weekly rise in five weeks as the Federal Reserve remained cautious on U.S. interest rate increases.
Spot gold was down 0.1 percent at $1,239.70 an ounce by 2:27 p.m. EDT (1827 GMT), while U.S. gold futures for June delivery settled up 0.5 percent at $1,243.80 an ounce.
