Market Roundup
•US Core Jun PPI (YoY) 3.0%, 2.5% forecast, 2.3% previous
•US Core PPI (MoM) (Jun): Actual 0.4%, Forecast 0.2%, Previous 0.0%
•US PPI (MoM) (Jun): Actual 0.2%, Forecast 0.1%, Previous -0.2%
•Canada Building Permits (MoM) (May): Actual -12.2%, Forecast -5.0%, Previous 20.5%
•US PPI (YoY) (Jun): Actual 2.6%, Forecast 2.3%, Previous 2.2%
•US PPI ex. Food/Energy/Transport (MoM) (Jun): Actual 0.0%, Forecast 0.2%, Previous 0.0%
•US PPI ex. Food/Energy/Transport (YoY) (Jun): Actual 3.1%, Previous 3.2%
•US Michigan 5-Year Inflation Expectations (Jul): Actual 2.9%, Forecast 3.0%, Previous 3.0%
•US Michigan 1-Year Inflation Expectations (Jul): Actual 2.9%, Forecast 3.0%, Previous 2.9%
•US Michigan Consumer Expectations (Jul): Actual 67.2, Forecast 69.8, Previous 69.6
•US Michigan Consumer Sentiment (Jul): Actual 66.0, Forecast 68.5, Previous 68.2
•US Michigan Current Conditions (Jul): Actual 64.1, Forecast 66.3, Previous 65.9
•USD U.S. Baker Hughes Oil Rig Count Actual 478 , 479 Previous
• USD U.S. Baker Hughes Total Rig Count: Actual 584 , 585 Previous
Looking Ahead Economic Data (GMT)
•No Data Ahead
Looking Ahead Events And Other Releases (GMT)
•No Significant Events Ahead
Currency Summaries
EUR/USD: The euro rose higher on Friday as dollar dipped on bets that the U.S. Federal Reserve will cut interest rates in September. U.S. consumer prices unexpectedly fell and the annual increase was the smallest in a year, reinforcing views that the disinflation trend was back on track and drawing the Fed another step closer to cutting rates. A monthly survey by the University of Michigan showed U.S. consumer sentiment fell to an eight-month low in July, although inflation expectations improved for the next year and beyond.The U.S. Labor Department said the producer price index (PPI) rose 0.2% in June, slightly more than expected, as the cost of services climbed. Still, investors expect the Fed could start cutting rates in September. Traders are betting on a 94% chance of a rate cut by September, up from 78% a week ago, according to CME Group's FedWatch. Immediate resistance can be seen at 1.0902(23.6%fib).), an upside break can trigger rise towards 1.1000 (Psychological level).On the downside, immediate support is seen at 1.0861(Daily low), a break below could take the pair towards 1.0825(38.2%fib).
GBP/USD: The pound coursed towards its best two-week performance against the dollar in eight months on Friday, after data pointed to an improvement in UK growth, while the U.S. economy shows signs of fatigue.Sterling has gained 2.4% against the dollar in the last two weeks, its biggest two-weekly rise since November last year. It was last up 0.3% at $1.2949, making it one of the best performing major currencies of the day.Data on Thursday showed the UK economy grew more quickly than expected in May, which prompted traders to chop back their bets on an August rate cut from the Bank of England.BoE Chief Economist Huw Pill gave the pound an extra boost this week by saying services inflation and wage growth showed uncomfortable strength despite headline inflation falling to the BoE's 2% target in May, and it was unlikely that June inflation figures due next week would change the big picture. Immediate resistance can be seen at 1.2958(23.6%fib), an upside break can trigger rise towards 1.3000(Psychological level).On the downside, immediate support is seen at 1.2905(Daily low), a break below could take the pair towards 1.2871(38.2%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday as investor bets on U.S. rate cuts remained firm despite slightly hotter-than-expected producer price numbers. The U.S. producer price index (PPI) showed a rise of 0.2% in June, a day after softer consumer prices reading supported a downward trend of inflation in the world's largest economy. Despite a moderate rise in the PPI dataset, markets still maintained a 96.2% chance of a rate cut by the U.S. central bank in September. Canadian inflation data due next week will have investors adjust their rate-cut bets ahead of the Bank of Canada's next monetary policy meeting on July 24.The loonie was trading 0.02% lower at C$1.3635 to the greenback, after trading in a range of 1.3612 to 1.3638.Immediate resistance can be seen at 1.3655 (23.6% fib), an upside break can trigger rise towards 1.3681(June 3rd high).On the downside, immediate support is seen at 1.3613(38.2% fib), a break below could take the pair towards 1.3580 (50% fib).
USD/JPY: The dollar fell sharply on Friday as the Japanese yen surged as traders were on alert for signs of fresh intervention by Japan. Japan's top currency diplomat said on Friday authorities would take action as needed in the foreign exchange market, resuming his jawboning after the yen's spike overnight raised market speculation about currency intervention.Bank of Japan (BOJ) data released later on Friday suggested Japan may have spent up to 3.57 trillion yen ($22.4 billion) intervening in the foreign exchange market to prop up the sagging currency.Masato Kanda, who is vice finance minister for international affairs, declined to comment on whether authorities had intervened in the currency market to prop up the yen, but told reporters recent yen moves were out of line with fundamentals. Strong resistance can be seen at 159.12(38.2%fib), an upside break can trigger rise towards 160.95(23.6%fib). On the downside, immediate support is seen at 157.50 (50%fib), a break below could take the pair towards 155.88(61.8%fib).
Equities Recap
European shares advanced on Friday and were set for a second consecutive weekly gains on upbeat earnings updates, while U.S. inflation data raised hopes of a September interest rate cut by the Federal Reserve.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax ended up by 1.27 percent, France’s CAC finished the day up by 1. 27percent.
Wall Street closed higher on Friday, with the S&P 500 and Dow Jones Industrial Average hitting intraday record highs, on bets that the U.S. Federal Reserve will cut interest rates in September, while big banks fell after reporting mixed results.
Dow Jones closed up by 0.62 percent, S&P 500 ended up by 0.55 percent, Nasdaq finished the day up by 0.62 percent.
Commodities Recap
Oil futures prices settled slightly lower on Friday as investors weighed weaker U.S. consumer sentiment against mounting hopes for a Federal Reserve rate cut in September.
Brent crude futures settled 37 cents lower to $85.03 a barrel. U.S. West Texas Intermediate crude futures fell 41 cents, or 0.5%, to close at $82.21 a barrel.
Gold prices were roughly flat after a strong rally in the previous session, although bullion was still on track for its third straight weekly rise on bets around U.S. rate cuts.Spot gold lost 0.14% to $2,411.31 an ounce.
