Posted at 24 September 2022 / Categories Market Roundups
Market Roundup
•Canada Jul Core Retail Sales (MoM) -3.1% ,-1.2% forecast, 0.8% previous
•Canada Manufacturing Sales (MoM) -1.8% ,-0.9% previous
•Canada Jul Retail Sales (MoM) -2.5%, -2.0% forecast, 1.1% previous
•US Sep S&P Global Composite PMI 49.3,44.6 previous
• US Sep Manufacturing PMI 51.8,51.1 forecast, 51.5 previous
• US Services Sep PMI 49.2,45.0 forecast, 43.7 previous
• U.S. Baker Hughes Total Rig Count 764, 763 previous
Looking Ahead Economic Data
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro fell for a fourth straight day after data showed the downturn in the German economy has worsened in September, as consumers and businesses face an unprecedented energy crunch and spiralling inflation. The downturn in German business activity deepened in September, a preliminary survey showed on Friday, as higher energy costs hit Europe's largest economy and companies saw a drop in new business.S&P Global's flash composite Purchasing Managers' Index (PMI), which tracks both the manufacturing and services sectors which together account for more than two-thirds of Germany's economy, fell to 45.9 in September from August's final reading of 46.9.. The euro slipped 0.8% to $0.9736, its lowest level since October 2002. Immediate resistance can be seen at 0.9764(38.2%fib), an upside break can trigger rise towards 0.9812(50%fib).On the downside, immediate support is seen at 0.9679(23.6%fib), a break below could take the pair towards 0.9600(Psychological level).
GBP/USD: Sterling declined against dollar on Friday as the new government's economic plan including tax cuts and other business friendly measures did little to ease worries about a potential recession highlighted by weak economic data. Britain's new finance minister, Kwasi Kwarteng, announced an economic agenda designed to thrust Britain out of a cycle of stagnation and into a new era of higher economic growth but with a hefty bill attached. A survey showed the downturn in British businesses steepened this month as they battled soaring costs and faltering demand, hammering home the rising risk of recession. The S&P Global/CIPS flash Composite Purchasing Managers' Index (PMI) fell to 48.4 in September. Immediate resistance can be seen at 1.1019(38.2%fib), an upside break can trigger rise towards 1.1156 (50%fib).On the downside, immediate support is seen at 1.0836(23.6%fib),a break below could take the pair towards 1.0800(Psychological level).
USD/CAD: The Canadian dollar weakened to its lowest level in more than two years against its U.S. counterpart on Friday as the sell-off in global equity markets continued and domestic data showed retail sales falling more than expected in July. Canadian retail sales fell by 2.5% in July from June on lower sales at gasoline stations, as well as clothing and clothing accessories stores, Statistics Canada said. Analysts had forecast a 2.0% decrease. The loonie was trading 0.3% lower at 1.3525 to the greenback, or 73.94 U.S. cents, after touching its weakest since July 2020 at 1.3551. For the week, the currency was headed for a decline of 2%.Immediate resistance can be seen at 1.3618(23.6%fib), an upside break can trigger rise towards 1.3700(Psychological level).On the downside, immediate support is seen at 1.3500 (Psychological level), a break below could take the pair towards 1.3444 (5 DMA).
USD/JPY: The dollar strengthened against yen on Friday as investors digested the prospect of a far more aggressive rise in U.S. interest rates, while currency markets remained volatile after Japan's intervention to prop up the yen. The yen was 0.6% lower at 142.88 per dollar, but still set for its first weekly gain in more than a month after Japanese authorities intervened in markets to support the currency for the first time since 1998.The yen rallied more than 1% on Thursday on news that Japan had bought yen to defend the battered currency. Trading was thin on Friday with Japanese markets closed for a public holiday. Strong resistance can be seen at 143.40(9DMA), an upside break can trigger rise towards 144.85(23.6%fib).On the downside, immediate support is seen at 142.45(38.2%fib), a break below could take the pair towards 140.76(50%fib).
Equities Recap
European stocks tumbled on Friday, and several markets in the region plunged to multi-month lows, as mounting fears about a global recession triggered widespread selling.
The UK's benchmark FTSE 100 closed down by 1.97 percent, Germany's Dax ended down by 1.97 percent, and France’s CAC finished the day down by 2.28 percent.
The blue-chip Dow Jones Industrial Average tumbled to its lowest level since November 2020 on Friday, but narrowly missed ending more than 20% below its Jan. 4 closing record high.
Dow Jones closed down by 1.62 percent, S&P 500 ended down by 1.72 percent, Nasdaq finished the down up by 1.80 percent.
Treasuries Recap
Two-year yields hit 15-year highs on Friday and the yield curve inversion deepened as investors fretted that central banks globally will keep tightening monetary policy to tackle soaring inflation.
Two-year yields reached 4.270%, the highest since October 2007. Five-year yields hit 4.084%, the highest since November 2007 and benchmark 10-year yields jumped to 3.829%, the highest since April 2010.
Commodities Recap
Gold prices dropped over 1.5% to their lowest since April 2020 on Friday, hurt by an unrelenting rally in the U.S. dollar and Treasury yields as the Federal Reserve adopts a more aggressive stance to check surging inflation.
Spot gold was down 1.6% at $1,644.04 per ounce at 1:57 p.m. EDT (1757 GMT), after dropping as much as 1.8% to $1,640.20 earlier in the session.U.S. gold futures settled 1.5% lower at $1,655.60.
Oil prices plunged about 5% to an eight-month low on Friday as the U.S. dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession, cutting demand for oil.
Brent futures fell $4.31, or 4.8%, to settle at $86.15 a barrel, down about 6% for the week. U.S. West Texas Intermediate (WTI) crude fell $4.75, or 5.7%, to settle at $78.74, down about 7% for the week.