Market Roundup
•China stocks record best week since 2008
•Yen jumps as Ishiba set to become Japan's next PM
•US PCE data softer than expected
•US Core PCE Price Index (YoY) (Aug): 2.7%, 2.7% forecast, 2.6% previous
•US Goods Trade Balance (Aug): -94.26B, -100.60B forecast, -102.84B previous
•US PCE Price Index (YoY) (Aug): 2.2%, 2.3% forecast, 2.5% previous
•US PCE Price Index (MoM) (Aug): 0.1%, 0.2% forecast, 0.2% previous
•US Personal Income (MoM) (Aug): 0.2%, 0.4% forecast, 0.3% previous
•US Personal Spending (MoM) (Aug): 0.2%, 0.3% forecast, 0.5% previous
•US Real Personal Consumption (MoM) (Aug): 0.1%, 0.4% previous
•US Retail Inventories Ex Auto (Aug): 0.4%, 0.5% previous
•US Wholesale Inventories (MoM) (Aug): 0.2%, 0.2% forecast, 0.3% previous
•Canadian GDP (MoM) (Jul): 0.2%, 0.0% forecast, 0.0% previous
•Canadian GDP (MoM) (Aug): 0.0%, 0.2% previous
•US Michigan 1-Year Inflation Expectations (Sep): 2.7%, 2.7% forecast, 2.7% previous
•US Michigan 5-Year Inflation Expectations (Sep): 3.1%, 3.1% forecast, 3.1% previous
•US Michigan Consumer Expectations (Sep): 74.4, 73.0 forecast, 73.0 previous
•US Michigan Consumer Sentiment (Sep): 70.1, 69.0 forecast, 69.0 previous
•US Michigan Current Conditions (Sep): 63.3, 62.9 forecast, 62.9 previous
•US Atlanta Fed GDPNow (Q3): 3.1%, 2.9% forecast, 2.9% previous
•Canadian Balance (YoY) (Jul): -7.30B, - forecast, -2.88B previous
•Canadian Budget Balance (Jul): -4.40B, - forecast, 0.94B 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 lost ground to the dollar on Friday as lower-than-expected inflation data from France and Spain weighed on the euro. Data from Europe revealed that inflation in France and Spain increased less than anticipated, raising the likelihood of an October rate cut by the European Central Bank to above 90%. The dollar fell as a subdued U.S. inflation report lifted expectations of an outsized interest rate cut at the Federal Reserve's November policy meeting.The euro slipped to $1.1128 from $1.1164.Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: Sterling fell slightly on Friday but stayed near to a two-and-a-half-year high against the dollar, boosted by a growing risk appetite following China's stimulus plan and the persistent monetary policy divergence between the Bank of England and other major central banks. In the most recent step, China's central bank on Friday reduced interest rates and injected money into the banking sector, with further fiscal measures expected to be revealed before China's week-long holidays begin on October 1. Immediate resistance can be seen at 1.3417(23.6%fib), an upside break can trigger rise towards 1.3449(Higher BB).On the downside, immediate support is seen at 1.3335(38.2%fib), a break below could take the pair towards 1.3274(50%fib).
AUD/USD: The Australian dollar hovered at multi-month highs, helped by hopes for a large stimulus package from China that bolstered risk assets. The Reserve Bank of Australia's (RBA) steady rate stance also helped the Australian dollar, with markets pricing in only a 20% likelihood of a rate cut in November. By the end of the year, the RBA's current cash rate of 4.35% is expected to fall to 3.31%, while the Fed's and the ECB's rates are 2.93% and 1.75%, respectively. The Aussie stood at $0.6901, having rallied to as high as $0.6936. Immediate resistance can be seen at 0.6927 (23.6%fib), an upside break can trigger rise towards 0.6953(Higher BB).On the downside, immediate support is seen at 0.6856(38.2%fib), a break below could take the pair towards 0.6821(Sep 25th low).
USD/CAD: The Canadian currency slipped against the US dollar on Friday, undoing some of its weekly gains, as technical selling outweighed stronger-than-expected domestic GDP data for July.Canada's GDP increased 0.2% in July compared to June, beating estimates of a 0.1% rise.However, an earlier estimate indicated that growth slowed in August, with the market pricing in a roughly 50% chance of a larger-than-usual half-point interest rate cut by the Bank of Canada in October.The Canadian dollar was down 0.4% at 1.3520 per US dollar , after trading between 1.3464 and 1.3526.Immediate resistance can be seen at 1.3526 (Daily high), an upside break can trigger rise towards 1.3555(50%fib).On the downside, immediate support is seen at 1.3494(38.2%fib), a break below could take the pair towards 1.3426 (23.6%fib).
USD/JPY: The dollar fell against the yen on Friday following Japan's Ishiba's narrow victory in the race for the country's ruling Liberal Democratic Party leadership. Some believe that Ishiba's ascent indicates the possible end of Abenomics and points to the Bank of Japan's stricter regulations and higher currency. But on Friday, in an effort to gain support ahead of a national vote, he underlined the importance of increasing consumption to help the nation avoid deflation. The Japanese yen was 1.88% stronger at 142.12 per dollar, having risen as high as 142.09, on course for its highest daily percentage gain since August 2. For the week, the dollar has fallen 1.25% against the yen. Strong resistance can be seen at 144.73 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 141.70(23.6%fib), a break below could take the pair towards 140.36(Lower BB).
Equities Recap
Europe's STOXX 600 share index closed at a new high on Friday, as companies and industries exposed to China rallied after Beijing announced a slew of stimulus measures this week, with luxury firms among the biggest winners.
UK's benchmark FTSE 100 closed up by 0.43 percent, Germany's Dax ended up by 1.22 percent, France’s CAC finished the day up by 0.64 percent.
The blue-chip Dow Jones Industrial Average closed at a new high as a weak inflation data fueled optimism for further Federal Reserve rate cuts, boosting small-cap stocks and allowing Wall Street's three main indexes to register weekly gains.
Dow Jones closed up by 0.33% percent, S&P 500 closed down by 0.13% percent, Nasdaq settled down by 0.40% percent.
Commodities Recap
Oil prices settled higher on Friday but fell on the week as investors weighed expectations for higher global supply against fresh stimulus from top crude importer China.
Brent crude futures settled up 38 cents, or 0.53%, at $71.89 per barrel. Front-month U.S. West Texas Intermediate crude futures settled up 51 cents, or 0.75%, at $68.18.
