Market Roundup
•German May Import Price Index (YoY) -0.4%,-0.3%forecast,-1.7%previous
•UK GDP (QoQ) (Q1)0.7%,0.6% forecast,-0.3% previous
•UK GDP (YoY) (Q1)0.3%,0.2% forecast,-0.2% previous
•UK Business Investment (QoQ) (Q1)0.5%,0.9% forecast,1.4% previous
•UK Business Investment (YoY) (Q1)-1.0%,-0.6% forecast,2.8% previous
•French May Consumer Spending (MoM) 1.5%, 0.2% forecast,-0.8% previous
•French Jun CPI (MoM)0.1%,0.1% forecast,0.0% previous
•German Jun Unemployment Change 19K,14K forecast,25K previous
• German Jun Unemployment Rate 6.0%,5.9% forecast,5.9% previous
•Italian Jun HICP (YoY) 0.9%,0.9% forecast,0.8% previous
•Italian Jun Italian CPI (MoM) 0.1%,0.2% forecast,0.2% previous
•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)
•17:00 U.S. Baker Hughes Oil Rig Count 485 previous
•17:00 U.S. Baker Hughes Total Rig Count 588 previous
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro strengthened against dollar on Friday following the release of data indicating that inflation in the world's largest economy cooled down last month . The Commerce Department's data showed personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge was unchanged on a monthly basis in May and rose 2.6% annually, all along expectations.Excluding the volatile food and energy components, the core figure increased 0.1% month-on-month and 2.6% annually.Chances of a rate cut in September inched up to 68% from 61% before the data, as per LSEG FedWatch data. Traders held their bets of two cuts despite Fed projections of just one this year, hoping for a sustained downtrend in inflation and as the economy remains susceptible to decades-high interest rate. 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/CHF: The dollar strengthened against the Swiss franc on Friday after an in-line US inflation report strengthened hopes for interest rate cuts in September. Data from the Commerce Department showed that the U.S. personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, was unchanged on a monthly basis in May, aligning with expectations. Annually, the PCE price index increased by 2.6%. Excluding the volatile food and energy components, the core PCE price index rose by 0.1% month-on-month and 2.6% annually. Following this data, the likelihood of a rate cut in September increased to 68% from 61%, according to FedWatch data . Immediate resistance can be seen at 0.8990 (23.6% fib), an upside break can trigger rise towards 0.9018 (Higher BB).On the downside, immediate support is seen at 0.8936 (38.2% fib), a break below could take the pair towards 0.8891 (50% fib).
USD/JPY: The dollar eased 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 eased on Friday a key U.S. inflation data came in line with expectations, boosting expectation that the Federal Reserve may cut interest rates by September..
UK's benchmark FTSE 100 was last down by 0.03 percent, Germany's Dax was last up by 0.34 percent, France’s CAC was last down by 0.67 percent.
Commodities Recap
Gold prices steadied on Friday and were headed for a third straight quarterly gain after a key U.S. inflation report came broadly in line with expectations, boosting hopes that the Federal Reserve may cut interest rates by September.
Spot gold was steady at $2,328.85 per ounce, as of 1335 GMT. Prices have gained over 4% for the quarter.U.S. gold futures rose 0.1% to $2,339.60.
Oil prices were steady on Friday after key U.S. inflation data for May was largely in line with expectations, lifting hopes that the Federal Reserve could start cutting interest rates this year.
Brent crude futures for August settlement , which expire on Friday, were up 34 cents, or 0.4%, at $86.73 a barrel by 1305 GMT. The more liquid September contract was up 0.39% at $85.59.
U.S. West Texas Intermediate (WTI) crude futures rose 32 cents, or 0.4%, to $82.06.
