Market Roundup
•Canada Wholesale Sales (MoM) 1.3%, 0.0% previous
•US Mar PCE price index (MoM) 0.3% forecast, 0.3% previous
•US Mar Personal Income (MoM) 0.5% forecast, 0.3% previous
•US Mar Core PCE Price Index (YoY) ) 2.7%,2.6% forecast, 2.8% previous
•US Mar Personal Spending (MoM) 0.6%forecast, 0.8% previous
•US Mar Core PCE Price Index (MoM) 0.3%, 0.3% forecast, 0.3% previous
•US Mar Real Personal Consumption (MoM) 0.5%,0.4% previous
• US Mar Dallas Fed PCE 2.90%, 3.40% previous
• US Apr Michigan 1-Year Inflation Expectations 3.1% forecast,2.9% previous
• US Apr Michigan Consumer Sentiment 77.8 forecast,79.4 previous
• US Apr Michigan Consumer Expectations 77.0 forecast, 77.4 previous
• US Apr Michigan 5-Year Inflation Expectations 3.0% forecast,2.8% previous
• US Apr Michigan Current Conditions 79.3 forecast,82.5 previous
Looking Ahead Economic Data(GMT)
• No Data Ahead
Looking Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro declined on Friday as dollar was bolstered by U.S. inflation data that showed no signs of easing. The personal consumption expenditures (PCE) price index rose 0.3% in March, compared to a forecast of a 0.3% increase, according to the data. In the 12 months through March, PCE inflation advanced 2.7% against expectations of 2.6%.The PCE price index is one of the inflation measures tracked by the U.S. central bank for its 2% target. Monthly inflation readings of 0.2% over time are necessary to bring inflation back to target. U.S. rate futures have priced in a 65% chance of a rate cut at the Fed's mid-September meeting, up from less than 60% before the PCE report. The euro slipped 0.1% to $1.0716 .Immediate resistance can be seen at 1.0735(50% fib), an upside break can trigger rise towards 1.0803(61.8% fib).On the downside, immediate support is seen at 1.0678(38.2% fib), a break below could take the pair towards 1.0633(23.6% fib).
GBP/USD: Sterling declined on Friday as dollar gained traction after data showed US inflation increased moderately. U.S. monthly inflation rose moderately in March, but stubbornly higher costs for housing and utilities suggested the Federal Reserve could keep interest rates elevated for a while.The report from the Commerce Department on Friday, which also showed strong consumer spending last month, offered some relief to financial markets spooked by worries of stagflation after data on Thursday showed inflation surging and economic growth slowing in the first quarter. The personal consumption expenditures (PCE) price index increased 0.3% last month, matching the unrevised gain in February, the Commerce Department's Bureau of Economic Analysis said. Immediate resistance can be seen at 1.2525 (50%fib), an upside break can trigger rise towards 1.2597(61.8%fib).On the downside, immediate support is seen at 1.2466 (38.2 % fib), a break below could take the pair towards 1.2373 (23.6 % fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Friday as U.S. inflation data suggested the Federal Reserve could turn more hawkish compared to the Bank of Canada and some other major peers, but the currency still notched a weekly gain. U.S. monthly inflation rose moderately in March, but stubbornly higher costs for housing and utilities suggested the Fed, which is due to make a policy decision on Wednesday, could keep interest rates elevated for a while. In contrast, money markets see a roughly 50% chance the Bank of Canada could begin easing as soon as June.Canadian wholesale trade fell 1.3% in March from February, a preliminary estimate from Statistics Canada showed, adding to evidence of a slowdown in the domestic economy. The loonie was trading 0.1% lower at 1.3665 to the U.S. dollar, with the currency pulling back after it touched its strongest level since April 10 at 1.3633. Immediate resistance can be seen at 1.3700 (50%fib), an upside break can trigger rise towards 1.3733 (Daily high).On the downside, immediate support is seen at 1.3633 (50% fib), a break below could take the pair towards 1.3563(61.8% fib).
USD/JPY: The dollar soared to a fresh 34-year high against the yen on Friday after data showed monthly inflation rose moderately in March . The Bank of Japan kept interest rates around zero at its policy meeting, despite forecasting inflation of around 2% for three years.Markets are braced for Tokyo authorities to prop up the currency, in what would be an unconventional and politically tough decision. BOJ Governor Kazuo Ueda said on Friday that exchange-rate volatility could significantly impact the economy. The dollar hit 157.795 yen , the highest since June 1990, and was last up 1.3% at 157.71. The greenback briefly dropped as low as 154.97 earlier in the session, triggering speculation that the BOJ, which acts on the behalf of the Ministry of Finance, may have checked currency rates, supposedly a sign that the central bank is preparing to intervene. Strong resistance can be seen at 156.89 (23.6%fib), an upside break can trigger rise towards 157.00 (Psychological level).On the downside, immediate support is seen at 155.44 (38.2% fib), a break below could take the pair towards 155.63 (Daily low).
Equities Recap
Europe's benchmark stock index had its biggest one-day gain in more than three months on Friday, propelled by banking and industrial stocks, while the technology sector got a boost from upbeat results from U.S. megacaps.
UK's benchmark FTSE 100 closed up by 0.75 percent, Germany's Dax ended up by 1.39 percent, France’s CAC finished the day up by 0. 89 percent.
U.S. stocks closed higher on Friday, buoyed by a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft in addition to moderate inflation data.
Dow Jones closed up by 0.40 percent, S&P 500 ended up by 1.02 percent, Nasdaq finished the up by 2.03 percent.
Treasuries Recap
Longer-dated U.S. Treasury yields fell after data showed inflation gains in March in line with economists’ expectations.
The yield on benchmark U.S. 10-year notes fell 4.3 basis points to 4.663%, from 4.706% late on Thursday. Bond yields rise as prices fall.
The 2-year note yield, which typically moves in step with interest rate expectations, fell 0.5 basis points to 4.9934%, from 4.998%.
Commodities Recap
Gold prices retreated on Friday after data showed monthly inflation rose moderately in March on an annual basis while coming in line with estimates on a monthly basis.
Spot gold retreated to $2,338.05 per ounce . Prices are down from the all-time high of $2,431.29 scaled on April 12, fuelled by geopolitical turmoil.
Oil prices settled higher on Friday, garnering support from tensions in the Middle East, but a strong dollar and U.S. inflation data quashed hopes that the Federal Reserve would cut interest rates soon, giving prices a ceiling.
Brent crude futures settled up 49 cents, or 0.55%, to $89.50 a barrel. U.S. West Texas Intermediate crude futures settled up 28 cents, or 0.34%, to $83.85 a barrel.
