Market Roundup
•Canada GDP (MoM) (May) 0.3%, 0.1% forecast, 0.5% previous
•U.S. Employment Cost Index (QoQ) (Q2) 0.9%, 0.8% forecast, 0.9% previous
•U.S. Employment Wages (QoQ) (Q2) 0.9%, 0.8% previous
•U.S. Employment Benefits (QoQ) (Q2) 1.0%, 1.2% previous
•Canada GDP (MoM) (Jun) 0.2%, 0.3% previous
•U.S. Chicago PMI (Jul) 57.6, 56.0 forecast, 56.7 previous
•U.S. Michigan 5-Year Inflation Expectations (Jul) 3.3%, 3.3% forecast, 3.3% previous
•U.S. Michigan 1-Year Inflation Expectations (Jul) 4.2%, 4.2% forecast, 4.6% previous
•U.S. Michigan Consumer Expectations (Jul) 55.4, 54.0 forecast, 50.7 previous
•U.S. Michigan Consumer Sentiment (Jul) 55.2, 54.4 forecast, 49.5 previous
•U.S. Michigan Current Conditions (Jul) 54.8, 54.9 forecast, 47.7 previous
•Canada Budget Balance (YoY) (May) -1.36B, -55.28B previous
•Canada Budget Balance (May) -0.31B, -29.73B previous
•U.S. Baker Hughes Oil Rig Count 451, 450 previous
•U.S. Baker Hughes Total Rig Count 588, 587 previous
• Looking Ahead Economic Data (GMT)
•No Data Ahead
• Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro edged higher on Friday as investors assessed the latest Eurozone inflation data, which reinforced expectations for further European Central Bank tightening. Eurozone inflation rose to 2.9% in July from 2.8% in June, in line with forecasts, as higher oil prices linked to the Iran conflict contributed to renewed price pressures.The ECB has signalled a likely 10 September rate hike, with policymakers indicating that economic conditions remain aligned with their baseline outlook. Markets are now pricing in more than two additional rate increases, with further hikes fully priced in by October and April. Immediate resistance can be seen at 1.1535(50%fib), an upside break can trigger rise towards 1.1600(psychological level).On the downside, immediate support is seen at 1.1442(38.2%fib), a break below could take the pair towards 1.1422(SMA 20).
GBP/USD : Sterling edged higher on Friday as investors reacted to news that the UK government will bring forward its next budget announcement. Finance Minister John Healey confirmed the first budget will be held on October 28, while pledging to maintain the fiscal rules inherited from former finance minister Rachel Reeves.Prime Minister Andy Burnham has also committed to keeping the rules, including a target to balance day-to-day spending with tax revenues by the end of the decade. However, economists warned that the government has limited room to meet its fiscal goals, with plans for higher defence spending and improved social care likely to pressure public finances.The pound also remained supported after the Bank of England held interest rates steady on Thursday, as policymakers assessed the potential inflation impact of the U.S.-Iran conflict. Immediate resistance can be seen at 1.3483(Daily high), an upside break can trigger rise towards 1.3543(23.6%fib).On the downside, immediate support is seen at 1.3414(50%fib), a break below could take the pair towards1.3395(SMA 20).
USD/CAD: The Canadian dollar slipped against the U.S. dollar on Friday but remained on track for a monthly gain, supported by stronger-than-expected domestic economic data. Canada’s GDP expanded 0.3% in May, beating forecasts for a 0.2% rise, while early estimates showed second-quarter annualized growth of 3.4%, marking the strongest quarterly performance in more than three years.Despite the stronger growth outlook, markets expect the Bank of Canada to keep interest rates unchanged in the near term. Expectations for a rate hike by the end of the year increased only modestly, with swap markets pricing a 68% chance compared with 60% previously.The loonie was trading 0.1% lower at 1.4025 per U.S. dollar, after trading in a range of 1.4003 to 1.4057. Immediate resistance can be seen at 1.4058(Daily high), an upside break can trigger rise towards 1.4095(SMA 20).On the downside, immediate support is seen at 1.4139(38.2%fib), a break below could take the pair towards 1.3948(Lower BB).
USD/JPY: The U.S. dollar fell against the Japanese yen on Friday as traders remained alert for possible further intervention by Japanese authorities after they stepped into currency markets a day earlier to support the yen. The yen had recently weakened to 40-year lows below 163 per dollar, pressured by the Bank of Japan’s gradual pace of rate increases.Most analysts expect the BOJ to raise rates further to 1.25% by the end of the year. Thursday’s intervention triggered a sharp surge in yen trading activity, with spot volumes reaching a decade high and futures volumes hitting a record level on CME Group.The BOJ kept its short-term interest rate unchanged at 1% on Friday, as widely expected, but indicated that underlying inflation could exceed its 2% target for the first time, raising expectations for another rate hike as early as September. Immediate resistance can be seen at 158.57(50%fib) an upside break can trigger rise towards 159.00(Psychological level) .On the downside, immediate support is seen at 157.34(Daily low) a break below could take the pair towards 156.22(61.8%fib).
Equities Recap
European shares closed lower on Friday but posted monthly gains, supported by strong corporate earnings despite Middle East tensions and AI-related concerns.
UK's benchmark FTSE 100 closed down by 0.27 percent, Germany's Dax ended up by 0.07 percent, France’s CAC finished the day up by 0.28 percent.
Wall Street closed higher on Friday as Amazon's strong quarterly results boosted AI-related stocks, while Apple fell after disappointing earnings.
Dow Jones closed up by 0.53% percent, S&P 500 closed up by 0.70% percent, Nasdaq settled up by 1.00% percent.
Commodities Recap
Spot gold was down 1.3% at $4,049.83 per ounce at 1:40 p.m. EDT (1740 GMT), after falling 2% earlier in the session. U.S. gold futures for August delivery dropped 1.3% to $4,107..
Oil prices gained 2% as traders assessed shipping disruptions in the Strait of Hormuz and attacks in the Red Sea by Iran-backed Houthis.
