Market Roundup
• US Employment Cost Index (QoQ) (Q4) 1.2%, forecast, 1.3% previous
• US Employment Wages (QoQ) (Q4) 1.50% previous
• US Dec Personal Income (MoM) 0.5% forecast ,0.4% previous
• US Dec Personal Spending (MoM) -0.6% forecast, 0.6% previous
• US Dec PCE Price index (YoY) 5.7 previous
• US Dec Core PCE Price Index (MoM) 0.5% forecast, 0.5% previous
• US Dec Core PCE Price Index (YoY) 4.8% forecast,4.7% previous
• US Jan Michigan Consumer Sentiment 68.7, 70.6 previous
• US Jan Michigan Consumer Expectations 65.8, 68.3 previous
• US U.S. Baker Hughes Oil Rig Count 491 previous
• US U.S. Baker Hughes Total Rig Count 604 previous
Looking Ahead - Economic data ahead (GMT)
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro declined against dollar on Friday as markets continued to digest the more hawkish than expected message that emerged from the U.S. Federal Reserve policy meeting earlier this week. In its latest policy update on Wednesday, the Fed indicated it was likely to raise U.S. interest rates in March, as widely expected, and reaffirmed plans to end its pandemic-era bond purchases that month before launching a significant reduction in its asset holdings. The euro nursed losses on Friday with the single currency trading down at 0.13 % at 1.1131. Immediate resistance can be seen at 1.1168(38.2%fib), an upside break can trigger rise towards 1.1205(50%fib).On the downside, immediate support is seen at 1.1129 (23.6%fib), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: Sterling recovered from one- month low against dollar on Friday as investors expected that Bank of England will raise rates next week and follow a much faster path of monetary tightening than the European Central Bank in 2022.Analysts argued that the hawkish BoE stance would boost the pound, despite the tightening plans from the U.S. Federal Reserve, providing some defence also against the dollar. The pound was up 0.04 percent against the greenback at $1.3386..Immediate resistance can be seen at 1.3427 (38.2%fib), an upside break can trigger rise towards 1.3449(23.6%fib).On the downside, immediate support is seen at 1.3369(50%fib), a break below could take the pair towards 1.3312(61.8%fib).
USD/CAD: The Canadian dollar weakened to its lowest level in more than three weeks against its U.S. counterpart on Friday as recent volatility in global financial markets showed no signs of subsiding, offsetting higher oil prices. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to investor sentiment. Oil prices headed towards a sixth consecutive weekly gain, as geopolitical tensions raised supply concerns. U.S. crude prices were up 1.9% at $88.24 a barrel.The loonie was trading 0.1% lower at 1.2755 to the greenback, after touching its weakest level since Jan. 6 at 1.2796 .Immediate resistance can be seen at 1.2769 (23.6%fib), an upside break can trigger rise towards 1.2821 (Ichimoku Cloud Top).On the downside, immediate support is seen at 1.2705 (38.2%fib), a break below could take the pair towards 1.2655 (50%fib).
USD/JPY: The dollar rose against the Japanese yen on Friday as markets priced in a year ahead of aggressive hikes in U.S. interest rates. Money markets priced in a 28.5-basis-point interest rate hike in March and as many as 119.5 basis points in cumulative increases by year's end as the dollar steadily rose in a week highlighted by a more hawkish tone coming out of a Federal Reserve meeting. The dollar index rose a scant 0.04%. The index, which measures the dollar's value against other major currencies, rose about 1.7% for the week to mark its biggest weekly gains since June. It shot above 97 for the first time since July 2020. Strong resistance can be seen at 115.49(Jan 29th high), an upside break can trigger rise towards 115.73 (23.6%fib).On the downside, immediate support is seen at 115.12 (38.2%fib), a break below could take the pair towards 114.62 (50%fib).
Equities Recap
European shares fell on Friday, with the STOXX 600 index down for the fourth straight week as auto and technology stocks led declines amid the prospect of higher interest rates and concern over the situation in Russia and Ukraine.
UK's benchmark FTSE 100 closed down by 1.17% percent, Germany's Dax ended down by 1.32% percent, France’s CAC finished the day down by 0.82% percent.
Wall Street surged on Friday, notching its best day so far in 2022 after another zigzag session, ending a tumultuous week marked by mixed corporate earnings, geopolitical turmoil and an increasingly aggressive Federal Reserve.
Dow Jones closed up by 1.65% percent, S&P 500 closed up by 2.43% percent, Nasdaq settled up by 3.13% percent.
Treasuries Recap
U.S. Treasury yields fell across the curve on Friday on month-end buying by investors to rebalance their portfolios.
The two-year and 10-year yield curve steepened to as much as 65.10 basis points, after hitting its narrowest spread since November 2020 on Thursday. That curve was last at 61.10 basis points.
Commodities Recap
Gold extended declines on Friday and was set for its worst week since late November as growing expectations for U.S. interest rate hikes pushed the dollar to a multi-month high, making bullion less attractive for overseas buyers.
Spot gold fell 0.6% to $1,785.71 per ounce at 14:02 ET (1902 GMT). It hit a six-week low of $1,779.20 earlier in the session, and was headed to drop about 2.5% for the week.
Oil prices rose to a more than seven-year peak on Friday and recorded their sixth straight weekly gain as geopolitical turmoil exacerbated concerns over tight energy supply.
Brent futures rose 69 cents to settle at $90.03 a barrel, after hitting $91.70, the highest level since October 2014.
U.S. crude closed 21 cents higher at $86.82 per barrel, after hitting a seven-year peak of $88.84 during the session.
