Market Roundup
• FBI to review more emails related to Clinton's private email use.
• USD/MXN rallies to 19.1005 high on Clinton news, CHF, JPY & gold (safe havens) gain.
• US Q3 GDP rises 2.9% v forecast 2.5%, exports boost growth; Consumer spending +2.1% rate v 4.3% previous.
• US employment wages 0.5% v 0.6% previous. benefits 0.7% v 0.5% previous.
• UMich consumer sentiment IDX 87.2 v 88.1 forecast, lowest since Sept 2015.
• UMich 1/5-yr inflation unchanged at 2.4%.
• German inflation hits two-year high in October, good news for ECB.
• Spain's Rajoy looks to Saturday vote to form new gov’t; Socialists to abstain in 2nd vote on Saturday aim to reverse policies of Rajoy's first term.
• Eurozone bonds volatile as nerves remain over central bank action, reversed early weakness to end flat.
• GBP slips after N. Ireland court ruled that the law of the province did not restrict the British PM's ability to trigger exit from EU.
• OPEC officials debate thorny issue of how to implement supply cut, Iraq seeks exemption.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia Private Sector Credit* Sep 0.4%-previous
• 00:30 Australia Housing Credit* Sep 0.5%- previous
• 21:45 New Zealand Building Consents Sep -1%- previous
• 00:00 New Zealand NBNZ Business Outlook Oct 27.9%- previous
• 00:00 New Zealand NBNZ Own Activity Oct 42.4%- previous
• 23:50 Japan Industrial output prelim mm Sep forecast 1%, 1.3%- previous
• 23:50 Japan IP Forecast 1 Month Ahead* Sep 2.2%- previous
• 23:50 Japan IP Forecast 2 Month Ahead* Sep 1.2%- previous
• 23:50 Japan Retail Sales YY Sep forecast -1.8%, -2.1%- previous
• 05:00 Japan Construction Orders YY* Sep 13.8%- previous
• 50:00 Japan Housing Starts YY* Sep forecast 5.1%, 2.5%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is supported at 1.0900 levels and currently trading at 1.0977 levels. The pair has made session high at 1.0992 and hit lows at 1.0910 levels. The dollar declined against the low-yielding euro on Friday as dollar was weighted down on U.S. political uncertainty after the FBI said it would review more emails related to Democratic presidential candidate Hillary Clinton's private email use. The reports added a new twist to the U.S. presidential campaign with just 11 days to go before Election Day on Nov. 8. Analysts said the dollar's losses against major rivals were largely on renewed uncertainty over the outcome of the election, since traders were largely expecting a Clinton victory. Markets have tended to see Clinton as the candidate of the status quo, while there is greater uncertainty over what a victory for Republican presidential candidate Donald Trump might mean for U.S. foreign policy, international trade deals or the domestic economy. The U.S. dollar reversed course, dropping 0.57 percent against a basket of major currencies. It fell 0.68 to 104.61 against the yen after earlier touching a three-month high of 105.50.
GBP/USD is supported in the range of 1.2110 levels and currently trading at 1.2182 levels. It reached session high at 1.2209 and dropped to session low at 1.2135 levels. British pound inched higher against dollar on Friday after dollar slipped against major currencies after the Federal Bureau of Investigation said it will investigate additional emails relating to Hillary Clinton's use of a private server. News of the new investigation pushed investors towards the safe heaven assets like Japanese yen. Clinton, the Democratic Party's presidential nominee, is viewed as the "safety" candidate because her election would mean less disruption for the government as current economic policies would be maintained. Sterling initially slipped lower in the US session after the release of US GDP data but recovered to trade flat at $1.2187. Sterling has lost almost a fifth of its value against the dollar since the June 23 vote for Brexit, and there had been worries that the economy would also take an immediate hit as foreign investment dried up and consumers lost confidence.
USD/CAD is likely to find support at 1.3340 levels and is trading at 1.3390 levels. It has made intraday high at 1.3434 and lows at 1.3353 levels. The Canadian dollar strengthened slightly against its U.S. counterpart on Friday as greenback was weighted down by U.S. political uncertainty. Oil prices fell on doubts over OPEC's planned output cut, even as data showed U.S. oil drillers cut rigs for the first time since June. U.S. crude oil futures settled $1.02 lower at $48.70 a barrel. Earlier in the day, an estimate of U.S. second-quarter gross domestic product showed annualized economic growth of 2.9 percent, the fastest rate in two years. However, the boost came largely from a recovery in inventories and a jump in agricultural exports after poor soy harvests in Argentina and Brazil this year benefited sales by American exporters. The loonie has been weakening since the Bank of Canada acknowledged last week that it had considered cutting interest rates at its policy meeting. Canadian dollar was trading at C$1.3398 to the greenback, slightly stronger than session of high C$1.3431.
AUD/USD is supported around 0.7545 levels and currently trading at 0.7596 levels. It hit session high at 0.7604 and made session lows at 0.7556 levels. Australian dollar edged slightly higher against US dollar on Friday as dollar turned lower after the Federal Bureau of Investigation said it would probe additional emails related to Democratic presidential candidate Hillary Clinton's use of a personal email server while secretary of state. The Australian dollar was last trading at $0.7593 after hitting a trough of $0.7556, its lowest since Oct.14. It fell 0.8 percent on Thursday, its biggest loss in a week. The Aussie had risen as high as $0.7709 on Wednesday but once again turned tail at the level, marking the fifth time since September that it has lost a bout with the crucial 77-U.S. cents barrier. Data out Wednesday showed consumer prices slightly topped expectations but underlying inflation, a measure the Reserve Bank of Australia (RBA) watches, had a narrow miss.That left the door open for further easing, although the futures market implies a near zero chance of a rate cut at the RBA's Nov. 1 policy meeting.
Equities Recap
Weak corporate results weighed on European shares on Friday, while choppy trading in banking shares took away some of the sector's recent gains.
UK's benchmark FTSE 100 closed down by 0.4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.37 percent, Germany's Dax ended down up 0.2 percent, France’s CAC finished the day up by 0.2 percent.
U.S. stocks declined in a volatile session on Friday but were able to partially recover from a sharp drop spurred by news the FBI will review more emails related to Democratic presidential candidate Hillary Clinton's private email use.
Dow Jones closed down by 0.05 percent, S&P 500 ended down by 0.31 percent, Nasdaq finished the day down by 0.50 percent.
Treasuries Recap
U.S. Treasury short-dated yields fell from five-month peaks to trade flat on Friday after the Federal Bureau of Investigation said it will investigate additional emails relating to Hillary Clinton's use of a private server.
U.S. 30-year bonds were 9/32 down in price to yield 2.616 percent, up from Thursday's 2.602 percent. They touched five-month peaks of 2.639 percent earlier on Friday.
U.S. 30-year yields, rising nearly 29 basis points this month, are on pace for their biggest monthly gain in 1-1/2 years.
Commodities Recap
Gold rose 1 percent to the highest level in nearly four weeks on Friday, extending gains late in the session after the FBI said it will further investigate Democratic presidential candidate Hillary Clinton's use of a private email system.
Spot gold was up 0.8 percent at $1,278.38 an ounce by 2:54 p.m. EDT (1854 GMT), after rising 1.3 percent to $1,284.14, the highest since Oct. 4. It is on track to close the week up 0.9 percent. U.S. gold futures settled up 0.6 percent at $1,276.80.
Oil prices settled below $50 on Friday to mark their biggest weekly loss in six weeks, on concerns OPEC will not fully carry out a planned output cut, even as data showed U.S. oil drillers removed rigs from production for the first time since June.
Brent crude futures fell 76 cents, or 1.5 percent, to $49.71 a barrel. It hit a session low of $49.31.U.S. West Texas Intermediate crude fell $1.02, or 2 percent, to $48.70 a barrel. It hit a low of $48.42.
