Market Roundup
•US consumer spending rises, inflation heats up
•US indexes down: Dow 1.02%, S&P 1.05%, Nasdaq 1.69%
•Canada Wholesale Sales (MoM) 3.0%,-0.8% previous
•Canada Manufacturing Sales (MoM) 3.9%,-1.5% previous
•US Jan Personal Income (MoM) 0.6%,1.0% forecast,0.2% previous
•US Jan Core PCE Price Index (YoY) 4.7%, 4.3% forecast,4.4% previous
•US Jan Personal Spending (MoM) 1.8%, 1.3% forecast,-0.2% previous
•US Jan Core PCE Price Index (MoM) 0.6%, 0.4% forecast,0.3% previous
•US Jan Real Personal Consumption (MoM) 1.1%,-0.3% previous
•US Jan New Home Sales 670K,620K forecast,616K previous
•US Feb Michigan Current Conditions 70.7, 72.6 forecast,68.4 previous
•US Feb Michigan Consumer Sentiment 67.0, 66.4 forecast,64.9 previous
•US Feb Michigan Inflation Expectations 4.1%,4.2% forecast,3.9% previous
•US Feb Michigan 5-Year Inflation Expectations 2.90%, 2.90% previous
•US Jan New Home Sales (MoM) 7.2% ,2.3% previous
•US Feb Michigan Consumer Expectations 64.7,62.3 forecast, 62.7 previous
•Canada Dec Budget Balance (YoY) -5.54B,-3.55B previous
•Canada Dec Budget Balance -1.98B, -3.38B previous
Looking Ahead Economic Data (GMT)
•No data ahead
Looking Ahead Events And other Releases (GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro declined on Friday as dollar strengthened following stronger-than-expected economic data that stoked worries the Federal Reserve will prolong its interest rate hiking cycle.Commerce Department data showed that consumer spending, which accounts for two-thirds of U.S. economy activity, rose by 1.8% in January, the largest increase in nearly two years and exceeding analyst estimates . Furthermore, the personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, accelerated by 0.6% last month, the biggest increase in six months. The euro was last down 0.39% against the greenback at $1.0549. Immediate resistance can be seen at 1.0623(5DMA), an upside break can trigger rise towards 1.0726(23.6%fib).On the downside, immediate support is seen at 1.0527(38.2%fib), a break below could take the pair towards 1.0465(Lower BB).
GBP/USD: Sterling dipped against the dollar on Friday after US data showed high inflation reinforced expectations that interest rates could stay higher for longer. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 1.8% last month, according to the Commerce Department. December's data was revised higher to show spending dipping 0.1% instead of falling 0.2% as previously reported. Meanwhile, sales of new U.S. single-family homes increased 7.2% in January, the highest level since March 2022. December's sales pace was revised higher to 625,000 units from the previously reported 616,000. Sterling softened 0.60% against the dollar at $1.1951.Immediate resistance can be seen at 1.2023(5DMA), an upside break can trigger rise towards 1.2130(23.6%fib).On the downside, immediate support is seen at 1.1938(38.2%fib), a break below could take the pair towards 1.1873(Lower BB).
USD/CAD: The Canadian dollar weakened to a seven-week low against its U.S. counterpart on Friday as worries about the Federal Reserve’s interest rate outlook offset additional evidence the domestic economy remained robust at the start of the year. Canadian preliminary data showed that wholesale trade rose 3.0% in January from December. It follows a preliminary estimate on Tuesday that showed retail sales gaining 0.7% last month, while previous data for January showed the economy added 10 times more jobs than expected and manufacturing activity picked up. The loonie was trading 0.4% lower at 1.36 to the greenback, or 73.53 U.S. cents, after touching its weakest level since Jan. 4 at 1.3665. Immediate resistance can be seen at 1.3660 (23.6%fib), an upside break can trigger rise towards 1.3680 (Jan 4th high).On the downside, immediate support is seen at 1.3594 (38.2% fib), a break below could take the pair towards 1.3545(50% fib).
USD/JPY: The dollar rose against yen on Friday as prospects of more interest rate hikes by the U.S. Federal Reserve boosted dollar amid a slew of strong economic data. U.S. inflation accelerated while consumer spending rebounded sharply by 1.8% in January, reinforcing expectations that the Fed will remain hawkish. Following a slew of strong economic data, investors have walked back expectations of a deep rate cut this year and expect U.S. rates to peak in July at 5.35% and remain above 5% until the end of the year. Against the yen, the dollar hit a two-month high and was last up 1.3% at 136.41 yen.Strong resistance can be seen at 136.65(23.6%fib), an upside break can trigger rise towards 136.81 (Higher BB).On the downside, immediate support is seen at 135.17(5DMA), a break below could take the pair towards 134.71(38.2%fib)
Equities Recap
European shares slid on Friday to end the week lower as a slew of U.S. economic data fed into fears that central banks are far from finished hiking rates.
UK's benchmark FTSE 100 closed down by 0.37percent, Germany's Dax ended down by 1.72 percent, France’s CAC finished the day down by 1.78 percent.
Wall Street's main indexes posted their biggest weekly drop of 2023 after sharp losses on Friday, as investors braced for the possibility of more aggressive rate hikes from the U.S. Federal Reserve as U.S. economic data pointed to resilient consumers.
Dow Jones closed down by 1.02% percent, S&P 500 closed down by 1.05 % percent, Nasdaq settled down by 1.69% percent.
Treasuries Recap
U.S. Treasury yields jumped, with benchmark 10-year yields hitting 3.9452%, and two-year yields , which are highly sensitive to Federal Reserve policy, rising as high as 4.8156%, the highest since Nov. 4.
Commodities Recap
Gold prices dropped to their lowest in eight weeks on Friday, pushed down by a stronger dollar and bond yields as the market braced for more interest rate hikes by the U.S. Federal Reserve in the coming months.
Spot gold fell 0.6% to $1,810.89 per ounce by 2:29 p.m. ET (1929 GMT), having touched its lowest since Dec. 30, at $1,808.7.U.S. gold futures slipped 0.5% to settle at $1,817.70.
Oil edged higher in volatile trade on Friday, and was flat on the week, with prices supported by the prospect of lower Russian exports but pressured by rising inventories in the United States and concerns over global economic activity.
Brent crude futures settled at $83.16 a barrel, up 95 cents, or 1.2%. West Texas Intermediate U.S. crude futures (WTI) settled at $76.32 a barrel, rising 93 cents, or 1.2%. Earlier, both fell by more than $1 a barrel.
