Market Roundup
•US May PCE price index (MoM) 0.0%,0.0% forecast,0.3% previous
•US May Personal Spending (MoM) 0.2%,0.3% forecast,0.2% previous
•US May PCE Price index (YoY) 2.6%,2.6% forecast,2.7% previous
•US May Core PCE Price Index (MoM 0.1%,0.1% forecast,0.2% previous
•US May Core PCE Price Index (YoY )2.6%,2.6% forecast,2.8% previous
•Canada Apr GDP (MoM) 0.3% ,0.3% forecast,0.0% previous
•Canada May GDP (MoM) 0.1% ,0.3% previous
•US Jun Michigan Consumer Expectations 69.6,67.6 forecast,68.8 previous
•US Jun Michigan Consumer Sentiment 68.2,65.6 forecast,69.1 previous
•US Jun Michigan Current Conditions 65.9,62.5 forecast,69.6 previous
•US Jun Michigan 5-Year Inflation Expectations 3.0%,3.1% forecast,3.0% 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 strengthened against dollar on Friday after data showed inflation in the world's largest economy subsided last month, cementing expectations the Federal Reserve will start cutting interest rates this year.Data showed the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, was unchanged last month, and followed an unrevised 0.3% gain in April, data showed. In the 12 months through May, the PCE price index increased 2.6% after advancing 2.7% in April.Following the inflation data, fed funds futures slightly raised the chances of easing in September to around 67%, from about 65% late Thursday. University of Michigan consumer sentiment, meanwhile, showed a reading of a better-than-expected 68.2 for June, also dollar-supportive. In addition, respondents to the sentiment survey expect near- and long-term inflation expectations to level out at 3%. Immediate resistance can be seen at 1.0727(Daily high), an upside break can trigger rise towards 1.0746(38.2% fib).On the downside, immediate support is seen at 1.0680(23.6% fib), a break below could take the pair towards 1.0634(Lower BB).
GBP/USD: Sterling was little changed on Friday as political concerns ahead of general elections in the UK and France kept investors cautious. Investors believe that the expected significant Labour majority after the vote of July 4 would bring more stability to UK politics and open up the potential for relations with the European Union to improve in the coming years. Meanwhile, the most likely outcomes in France, which involves a victory of the far-right party National Rally (RN) or the far-left New Popular Front (NPF), could threaten the safe-haven status of the national debt, weakening the euro. Markets priced in a bit more than a 50% chance of a first 25 bps rate cut by the Bank of England and 42 bps of cumulative monetary easing by year-end versus 45 bps in the U.S. Immediate resistance can be seen at 1.2685(38.2%fib), an upside break can trigger rise towards 1.2775(23.6%fib).On the downside, immediate support is seen at 1.2637(50%fib), a break below could take the pair towards 1.2586(61.8% fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Friday as domestic data showed the economy growing in both April and May, but the currency still posted its second straight quarterly decline. Canada's gross domestic product increased 0.3% in April, matching market expectations, as growth rebounded in sectors including wholesale trade and manufacturing, while an advanced estimate showed the economy expanding a further 0.1% in May.The loonie was trading 0.3% higher at 1.3665 to the U.S. dollar, or 73.18 U.S. cents, regaining some ground after it earlier touched its weakest level since June 18 at 1.3734.For the month, the currency weakened 0.3% as the Bank of Canada became the first G7 central bank to cut interest rates, while it was down 0.9% for the second quarter .Immediate resistance can be seen at 1.3695 (50% fib), an upside break can trigger rise towards 1.3733(61.8% fib).On the downside, immediate support is seen at 1.3665(38.2% fib), a break below could take the pair towards 1.3624(23.6% fib).
USD/JPY: The dollar was little changed against yen on Friday after data showed inflation in the world's largest economy cooled down last month, cementing expectations that the Federal Reserve will start cutting interest rates this year.The greenback has been on a tear against the yen, underpinned by wide interest rate differentials between the United States and Japan. On the year, the dollar has surged 14%.Earlier in the session, the dollar hit a fresh 38-year high of 161.27 yen. But as inflation cooled, the dollar retreated on Friday, sliding 0.3% to 160.285 yen .Data showed the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, was unchanged last month, and followed an unrevised 0.3% gain in April, data showed. In the 12 months through May, the PCE price index increased 2.6% after advancing 2.7% in April. Strong resistance can be seen at 160.83(23.6%fib), an upside break can trigger rise towards 161.00(Psychological level).On the downside, immediate support is seen at 159.41 (38.2% fib), a break below could take the pair towards 158.02(50%fib).
Equities Recap
European shares gave up early gains to close lower on Friday as a drop in shares of beauty giant L'Oreal weighed, while the benchmark index clocked weekly, monthly and quarterly declines on French political uncertainties..
UK's benchmark FTSE 100 closed down by 0.19 percent, Germany's Dax ended up by 0.13 percent, France’s CAC finished the day down by 0. 68 percent.
U.S. stocks ended weaker on Friday after an early rally fizzled as investors digested in-line inflation data and weighed political uncertainty after the U.S. presidential debate.
Dow Jones closed down by 0.12percent, S&P 500 ended down by 0.41 percent, Nasdaq finished the day down by 0.76 percent.
Commodities Recap
Gold prices steadied on Friday and were headed for a third straight quarterly gain after a key U.S. inflation report was broadly in line with expectations, boosting hopes that the Federal Reserve could cut interest rates by September.
Spot gold was steady at $2,326.47 per ounce, as of 1833 GMT. Prices have gained over 4% for the quarter.U.S. gold futures settled 0.1% higher at $2,339.6.
Oil prices fell on Friday as investors weighed weak U.S. fuel demand and took some money off the table at quarter-end, while key inflation data for May boosted the chances the Federal Reserve will start to cut interest rates this year.
Brent crude futures for August settlement , which expired on Friday, settled up 2 cents at $86.41 a barrel. The more liquid September contract fell 0.3% to $85 a barrel.
U.S. West Texas Intermediate (WTI) crude futures settled 20 cents lower, or 0.24%, to $81.54.
