Market Roundup
• US Jan import prices rise 0.4% vs 0.2% forecast, 0.5% previous, boosted by higher energy prices.
• U Mich prelim Feb cons sent Index 95.7 vs 97.9 forecast, final Jan 98.5, expectations 85.7 v 89 forecast, 90.3 previous.
• U Mich 1-yr inflation 2.8% v 2.6% previous; 5-yr 2.5% v 2.6% previous.
• US Fed’s Tarullo will resign on or around April 5.
• NY Fed’s Nowcast Q1 tracker +0.2% to +3.1%, on higher imports/exports.
• ECB’s Nowotny: No reason, for now, to change QE, to discuss future of QE from mid-’17 Der Standard.
• Japan’s Abe: Expanding free trade & investments offers big chance for US & Japan, will discuss TPP in later meeting with Trump.
• President Trump predicts level playing field on trade with China soon (regarding currency devaluations) CCY & trade have to be fair.
• Copper hits highest since June 2015 on Chile mine strike.
• ECB’s Mersch: ECB needs to take rate cuts off the table says “there should be no delay in making the necessary gradual adjustments to our communication."
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Election Card Retail Sales mth Jan -0.1%-previous
• 21:45 New Zealand Election Card Retail Sales YY* Jan 5.8%- previous
• 23:50 Japan GDP QQ Q4 forecast 0.3%, 0.3%- previous
• 23:50 Japan GDP QQ Annualised Q4 forecast 1.1%, 1.3%- previous
• 23:50 Japan GDP QQ Pvt Consumption Prelim Q4 forecast 0%, 0.3%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0588 levels and currently trading at 1.0636 levels. The pair has made session high at 1.0651 and hit lows at 1.0606 levels. Euro declined against the dollar on Friday as the dollar strengthened as Trump and Japanese Prime Minister Shinzo Abe opened two days of talks looking to cement a decades-old alliance. Trump's promise of a "phenomenal" tax plan helped reignite a post-election rally in dollar, which had stalled in recent weeks on concerns over his protectionist stand and the lack of clarity on policy reforms. The U.S. dollar held its recent gains against a basket of major rivals as comments from Trump during a news conference with the Japanese Prime Minister did little to shake optimism his administration would overhaul tax policy soon. The dollar index, which measures the greenback against six major rivals, was up 0.12 percent to 100.77. The euro touched $1.0608, its lowest level against the dollar since Jan. The dollar index, which measures the greenback against a basket of six major currencies, rose as much as 0.3 percent to an 11-day high of 101.010. The index later pared gains and was last up about 0.2 percent at 100.880.
GBP/USD is supported in the range of 1.2415 levels and currently trading at 1.2483 levels. It reached session high at 1.2510 and dropped to session low at 1.2436 levels. Sterling lost ground against dollar on Friday as sterling was weighted down after solid year-end UK manufacturing and trade data allayed fears of an economic slowdown as the Brexit process gathers pace. A number of forward-looking indicators of sentiment have dipped in the past 10 days, stirring nerves among investors that a weakening of growth predicted by many economists since the vote to leave the EU last June was finally materialising. But manufacturing output rose 2.1 percent in December, far higher than the 0.5 percent rise forecast. Compared with December 2015, it was up 4.0 percent, the strongest increase since April 2014. Meanwhile, Britain's goods trade deficit fell to 10.89 billion pounds in December, narrower than a forecast of 11.5 billion. At 22:00 GMT the pound was down 0.1 percent on the day against the dollar at$1.2486, having traded in a range of $1.2439-$1.2521 on Friday.
USD/CAD is supported at 1.3031 levels and is trading at 1.3090 levels. It has made session high at 1.3100 and lows at 1.3061 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as oil prices strengthened and data showed domestic jobs added to the risk that the Bank of Canada will raise interest rates as soon this year. Canada added 48,300 jobs in January, Statistics Canada said, as hiring in the service sector helped the labor market build on its momentum from the latter part of 2016. Economists had expected no gain in jobs. Gains for the Canadian dollar came even as the greenback strengthened against a basket of major currencies after meeting of U.S. and Japanese leaders. U.S. crude prices were up 1.77 percent at $53.94 a barrel after reports that Organization of the Petroleum Exporting Countries members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January. The Canadian dollar was last trading at C$1.3080 to the greenback, or 76.42 U.S. cents, stronger than Thursday's close of C$1.3141, or 76.10 U.S. cents.
AUD/USD is supported around 0.7604 levels and currently trading at 0.7674 levels. It hit session high at 0.7688 and made session lows at 0.7640 levels. The Australian dollar added to broad gains against the greenback on Friday as a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe yielded little in the way of headlines. Technical positioning in limited trading volume shifted markets through the day as a weak reading on U.S. consumer confidence forced traders to re-examine the market's momentum. The Australian dollar firmed 0.4 percent the day's high of $0.7658, but stayed in a narrow trading band of 76-77 U.S. cents. The Aussie is facing stiff chart resistance at 77 U.S. cents, failing to breach the level four times in recent days. Earlier, the Reserve Bank of Australia (RBA) predicted the economy would rebound smartly following a shock contraction in the third quarter of last year while headline inflation was seen at 2 percent in early 2017. The Aussie also got a lift after China posted a 25 percent jump in imports in January. Iron ore imports were the second highest on record while coal imports soared 64.4 percent over last year.
Equities Recap
European shares edged higher on Friday, ending the week in positive territory thanks to corporate earnings and robust basic resources stocks, though declines among Italian banks led that sector to its worst week since November.
UK's benchmark FTSE 100 closed up by 0.4 percent, FTSEurofirst 300 ended the day up by 0.12 percent, Germany's Dax ended up by 0.2 percent, and France’s CAC finished the day up by 0.1 percent.
Wall Street's main stock indexes rose to fresh all-time closing highs as a spike in oil prices supported energy shares and investors renewed their optimism about President Donald Trump's economic agenda.
Dow Jones closed up by 0.48 percent, S&P 500 ended up 0.36 percent, Nasdaq finished the day up by 0.31 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Friday, boosted by solid monthly import price data as investors acted largely on technical data.
Benchmark 10-year Treasury note yields rose to a session high of 2.43 percent after the release of the imports data, which showed prices increased 0.4 percent in January after an upwardly revised 0.5 percent rise in December.
The 10-year note was last down 3/32 in price to yield 2.41 percent.
The 5-year note yield fell to its lowest level since December, and longer-dated yields hit multi-week lows on Wednesday.
Commodities Recap
Gold steadied on Friday, but remained below this week's three-month top as the U.S. dollar and Treasury yields came off their highs after the currency initially jumped on U.S. President Donald Trump's promise of a major tax announcement.
Spot gold was up 0.02 percent at $1,230.78 an ounce by 2:24 p.m. EST (1924 GMT), while U.S. gold futures for April delivery settled down 0.07 percent at $1,235.90.
Oil prices rose on Friday after reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January.
Global benchmark Brent crude settled up $1.07, or 1.9 percent, at $56.70 a barrel. It touched a session high of $56.88.
U.S. West Texas Intermediate (WTI) crude futures settled up 86 cents, or 1.6 percent, at $53.86 a barrel.
