Posted at 20 August 2022 / Categories Market Roundups
Market Roundup
•U.S. oil rig count flat for the week -Baker Hughes
•Fed has 'a lot of time' before next rate decision, Barkin says
•Canada Jun Core Retail Sales (MoM) 0.8%, 0.9% forecast, 1.9% previous
•Canada Jun Retail Sales (MoM) 1.1%, 0.3% forecast, 2.2% previous
•U.S. Baker Hughes Oil Rig Count 601,601 previous
•U.S. Baker Hughes Total Rig Count 601,763 previous
Looking Ahead – Economic data (GMT)
•No data ahead
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro declined against dollar on Friday as investors adjusted for the likelihood that the Federal Reserve will keep hiking rates to battle inflation. The Fed is seen as having more room to hike rates than central banks of other large economies which are more fragile.The U.S. central bank needs to keep raising borrowing costs to tame decades-high inflation, a string of its officials said on Thursday, even as they debated how fast and how high to lift them. The dollar index rose 0.61% to 108.13, its highest since July 15, while the euro dropped 0.54% to $1.0033, its lowest since the same date. Immediate resistance can be seen at 1.0101(Daily high), an upside break can trigger rise towards 1.0141(38.2%fib).On the downside, immediate support is seen at 1.0033(23.6%fib), a break below could take the pair towards 1.0000(Psychological level).
GBP/USD: The British pound weakened against the dollar on Friday as a surprise uptick in UK retail sales failed to lift a weakening pound, as inflation and recession risks continue to dominate traders’ minds. British shoppers spent more than expected last month after being enticed by online shopping deals, official figures showed on Friday. In contrast, data showed UK consumer sentiment plummeting to a record low in August. Markets remain focused on data earlier this week showing inflation at the highest level in 40 years, which ramped up fears of an economic slowdown and increased pressure on the Bank of England (BoE) to bring down prices. Sterling tumbled 1.03% to $1.1813 and had its biggest weekly drop against the dollar since September 2020.Immediate resistance can be seen at 1.1883(38.2%fib), an upside break can trigger rise towards 1.1981(50%fib).On the downside, immediate support is seen at 1.1812(Daily low),a break below could take the pair towards 1.1755 (23.6%fib).
USD/CAD: The Canadian dollar weakened to a one-month low against its U.S. counterpart on Friday as safe-haven demand boosted the greenback, but a rally in oil prices helped cap losses for Canada's currency. The loonie was trading 0.4% lower at 1.2995 to the greenback, or 76.95 U.S. cents, after touching its weakest level since July 18 at 1.3009. The price of oil, one of Canada's major exports, rose for a third straight day. U.S. crude prices settled 0.3% higher at $90.77 a barrel. In domestic data, retail sales increased 1.1% in June, easily beating forecasts, on pricier gasoline and higher sales at car dealerships. But a preliminary estimate showed sales falling in July. Immediate resistance can be seen at 1.3007 (23.6%fib), an upside break can trigger rise towards 1.3058 (July 13th high).On the downside, immediate support is seen at 1.2908 (38.2 %fib ), a break below could take the pair towards 1.2872 (14DMA)
USD/JPY: The dollar strengthened against yen on Friday as Federal Reserve officials continued to talk up the need for further interest rate hikes.Markets have been volatile amid concerns about a looming recession, even though Fed officials indicated in the minutes of their July meeting released on Wednesday that they would adopt a less aggressive stance if inflation starts to recede. A string of Fed officials, including St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly, reiterated on Thursday that the U.S. central bank needs to keep raising interest rates to rein in inflation. The greenback gained 0.73% to 136.87 against the Japanese yen , the strongest since July 27. Strong resistance can be seen at 137.09(Daily high), an upside break can trigger rise towards 137.59(23.6%fib).On the downside, immediate support is seen at 135.95 (38.2%fib), a break below could take the pair towards 135.53 (30DMA).
Equities Recap
European shares fell on Friday and posted a weekly loss as the highest-ever jump in German producer prices in July added to gloom over the economic outlook.
The UK's benchmark FTSE 100 closed up by 0.11 percent, Germany's Dax ended down by 1.122 percent, and France’s CAC finished the down by 0.94 percent.
U.S. stocks fell and the dollar rose on Friday, even as Treasury yields gained, with traders anxious about inflation and what the Federal Reserve will do to combat it.
Dow Jones closed down at 0.86% percent, S&P 500 ended down 1.29%percent, Nasdaq finished the day down by 2.01%percent.
Treasury Recap
U.S. Treasury yields rose on Friday, mimicking European bonds after Germany reported record-high increases in monthly producer prices, which are seen as a leading indicator for inflation.
Benchmark U.S. Treasury 10-year note yields rose about nine basis points from their close on Thursday to 2.975%, and five-year note yields climbed to 3.107%, with both hitting new one-month highs.
Commodities Recap
Gold prices slipped for a fifth consecutive session on Friday, in its longest losing run since November last year, as the bullion’s appeal waned with a stronger dollar and more U.S. interest rate hikes on the horizon.
Spot gold dropped 0.6% to $1,748.58 per ounce by 1:47 p.m. ET (1747 GMT), having hit its lowest since July 28 earlier in the session. U.S. gold futures settled down 0.5% at $1,762.9.
Oil prices steadied on Friday, but fell for the week on a stronger U.S. dollar and fears that an economic slowdown would weaken crude demand.
Brent crude futures settled at $96.72 a barrel, gaining 13 cents. U.S. West Texas Intermediate crude ended 27 cents higher at $90.77. Both benchmarks fell about 1.5% on the week.