Posted at 29 July 2023 / Categories Market Roundups
Market Roundup
•US Employment Benefits (QoQ) (Q2) 0.90%, 1.30% forecast,1.20% previous
•US Employment Cost Index (QoQ) (Q2) 1.0%,1.1% forecast,1.2% previous
•US Jun Personal Income (MoM) 0.3%, 0.5% forecast,0.4% previous
•US Jun PCE Price index (YoY) 0.3%,3.1% forecast,3.8% previous
• US Jun Real Personal Consumption (MoM) 0.4%,0.1% previous
• US Jun Personal Spending (MoM) 0.5%, 0.4% forecast,0.1% previous
• US Jun Core PCE Price Index (MoM) 0.2%,0.2% forecast,0.3% previous
•US Jun Core PCE Price Index (YoY) 4.1%,4.2% forecast,4.6% previous
•Canada GDP (MoM) 0.3%, 0.3% forecast,0.0% previous
•US Jul Michigan 5-Year Inflation Expectations 3.0%, 3.0% forecast,3.0% previous
•US Jul Michigan Inflation Expectations 3.4%,3.4% forecast,3.3% previous
•US Jul Michigan Current Conditions 76.6, 77.5 forecast,69.0 previous
•US Jul Michigan Consumer Sentiment 71.6,72.6 forecast,64.4 previous
•US Jul Michigan Consumer Expectations 68.3,69.4 forecast,61.5 previous
•Canada May Budget Balance 3.35B, -20.21B forecast,-44.41B previous
•Canada May Budget Balance (YoY) 1.52B, -19.17B forecast,-41.31B previous
•US Jun Dallas Fed PCE 2.50%,4.30% forecast,3.20% previous
•U.S. Baker Hughes Oil Rig Count 529,530 previous
•U.S. Baker Hughes Total Rig Count 664, 669 previous
Looking Ahead Economic Data(GMT)
•No Data Ahead
Looking Ahead Events And Other Releases (GMT)
EUR/USD: The euro strengthened against dollar on Friday as markets digested the Bank of Japan's decision to tweak its ultra-loose monetary policy as well as data showing a continuing moderation in annual U.S. inflation. The Bank of Japan on Friday adjusted its yield curve control scheme, offering to buy 10-year Japanese government bonds beyond the previous 0.5% target rate while keeping unchanged its benchmark short-term rate at -0.1% and long-term bond yields at zero.U.S. inflation slowed considerably in the 12 months to June, with the personal consumption expenditures price index rising by 3%, the smallest annual gain since March 2021, data from the Commerce Department showed on Friday. Immediate resistance can be seen at 1.1048 (23.6%fib), an upside break can trigger rise towards 1.1146(June 28th high).On the downside, immediate support is seen at 1.0947(50%fib), a break below could take the pair towards 1.0913( (5DMA).
GBP/USD: The pound edged higher on Friday but hovered near two-week lows after a string of central bank decisions this week reinforced expectations that the Bank of England will not deliver another jumbo rate hike next week. The BoE meets on Aug 3 and, right now, traders are leaning more towards a rate increase of 25 basis points, but still see a 25% chance of another half-point rise. Investors are still betting heavily on a stronger pound and hold their most valuable bullish bet on sterling since 2014. Sterling was last up 0.1% against the dollar at 41.2813 and up 0.2% against the euro at 85.58 pence. Immediate resistance can be seen at 1.2861(5DMA), an upside break can trigger rise towards 1.2910(23.6%fib).On the downside, immediate support is seen at 1.2777(38.2%fib), a break below could take the pair towards 1.2682(50%fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Friday after preliminary data showed the domestic economy contracting in June, a possible sign that higher borrowing costs are working to slow activity. Canada’s economy grew 0.3% in May and likely contracted 0.2% in June, pointing toward a slowdown that could bring an end to the Bank of Canada’s monetary tightening campaign that has pushed interest rates to a 22-year high. The loonie was trading 0.1% lower at 1.3240 to the greenback, or 75.53 U.S. cents, after touching its weakest intraday level since July 11 at 1.3249. For the week, the currency was also down 0.1%. Immediate resistance can be seen at 1.3278(38.2%fib), an upside break can trigger rise towards 1.3325 (Higher BB).On the downside, immediate support is seen at 1.3202 (5DMA), a break below could take the pair towards 1.3160 (23.6%fib).
USD/JPY: The U.S. dollar strengthened against the Japanese yen on Friday after the Bank of Japan made its yield curve control policy more flexible, which investors took as a step towards an eventual shift in its massive stimulus programme. The BOJ ended a two-day policy meeting on Friday with a decision to keep its short-term interest rate target at -0.1% and that for the 10-year government bond yield around 0%. The move brings the BOJ more into line with other major central banks, which have been aggressively hiking rates to reduce inflation. The yen whipsawed in its most volatile trading session in months following the BOJ's move. The yen weakened 1.18% versus the greenback at 141.14 per dollar. Strong resistance can be seen at 141.33(23.6%fib) an upside break can trigger rise towards 142.00(Psychologcia level).On the downside, immediate support is seen 140.68(5DMA), a break below could take the pair towards 139.02(38.2%fib)
Equities Recap
European shares retreated from multi-month highs on Friday after a mixed bag of earnings and a surprise Bank of Japan policy tweak, but German blue-chips bucked the trend to close at a record high on signs of cooling inflation.
UK's benchmark FTSE 100 closed up by 0.02 percent, Germany's Dax ended up by 0.39 percent, France’s CAC finished the day up by 0.15 percent.
All three major U.S. indexes ended the week with gains, after a slew of Big Tech earnings, economic data and central bank announcements boosted investor confidence in a soft landing for the U.S. economy.
Dow Jones was trading up by 0.59 percent, S&P 500 was trading up by 0.99 percent, Nasdaq was trading up by 1.90 percent.
Treasuries Recap
U.S. Treasury yields weakened on Friday, after hitting two-week highs for most maturities the previous session, as data showed June inflation continued to moderate, though remaining firmly above the Federal Reserve's 2% target.
The yield on benchmark 10-year Treasury notes US10YT=RR was down 4.1 basis points (bps) at 3.970%.
Commodities Recap
Gold rose on Friday after a sharp fall one day earlier, helped by a slight retreat in the dollar as signs of cooling U.S. inflation raised bets that the Federal Reserve will likely end its monetary tightening cycle.
Spot gold was up 0.75% at $1,959.53 per ounce by 2:15 p.m. ET (1815 GMT). U.S. gold futures settled 0.8% higher at $1,960.40.
Oil prices rose on Friday and notched a fifth straight week of gains as investors were optimistic that healthy demand and supply cuts will keep prices buoyant.
Brent crude settled 75 cents higher to $84.99 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 49 cents to $80.58 a barrel.