Posted at 15 October 2022 / Categories Market Roundups
Market Roundup
•Canada Aug Wholesale Sales (MoM) 1.4%,0.8% forecast, -0.6% previous
•US Sep Retail Control (MoM) 0.4%,0.3% forecast, 0.4% previous
•US Sep Core Retail Sales (MoM) 0.1%,-0.1% forecast, -0.3% previous
•US Sep Retail Sales (MoM) 0.0%,0.2% , 0.3% previous
•US Sep Export Price Index (MoM ) -0.8%,-1.0% forecast, -1.6% previous
•US Sep Import Price Index (MoM) -1.1% forecast, -1.0% previous
•Canada Aug Manufacturing Sales (MoM) -1.2%, -1.8% forecast, -0.9% previous
•US Oct Michigan 5-Year Inflation Expectations 2.90%, 2.70% previous
•US Oct Michigan Consumer Sentiment 59.8,59.0 forecast, 58.6 previous
•US Oct US Michigan Consumer Expectations 56.2,58.5 forecast, 58.0 previous
•US Aug Retail Inventories Ex Auto 0.6%,0.6% previous
•US Aug Business Inventories (MoM) 0.8%,0.9% forecast, 0.6% previous
•U.S. Baker Hughes Oil Rig Count 610, 602 previous
•U.S. Baker Hughes Total Rig Count 769,762 previous
•USD Federal Budget Balance -220.0B previous
Looking Ahead – Economic data (GMT)
•No data ahead
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro dipped on Friday as stronger U.S. dollar and prospects of more steep rate hikes from the Federal Reserve weighed on euro. Data on Thursday showed U.S. consumer prices increased more than expected in September, providing ammunition to the Fed to deliver another big rate hike. The Fed has raised rates at the fastest pace since the 1980s as it seeks to quell inflation running at a four-decade high. It's policy rate, or the fed funds rate, has climbed to a current range of 3%-3.25% from near zero in March.Money markets see the fed funds rate at 4.95% in March 2023, about a 25 basis point increase from where they were priced before data on Thursday showed U.S. consumer prices rose more than expected as rents surged. Immediate resistance can be seen at 0.9796(21DMA), an upside break can trigger rise towards 0.9888 (38.2%ib).On the downside, immediate support is seen at 0.9705(23.6%fib), a break below could take the pair towards 0.9635(Oct 13th low).
GBP/USD: Sterling fell sharply against the U.S. dollar on Friday after British Prime Minister Liz Truss fired her finance minister and scrapped parts of their economic package that has caused havoc in UK financial markets. Kwasi Kwarteng said he had resigned at Truss's request after being forced to rush back to London overnight from IMF meetings in Washington. He was replaced by former Foreign Secretary Jeremy Hunt.Truss, in power for only 37 days, then told a news conference she would now allow a key business levy to rise from next year, raising 18 billion pounds, as she accepted she had gone "further and faster" than markets had been expecting. The pound fell for a second straight day against the dollar, last trading at $1.1178, down 1.5%. Immediate resistance can be seen at 1.1377 (38.2%fib), an upside break can trigger rise towards 1.1516 (50DMA).On the downside, immediate support is seen at 1.1128 (23.6%fib), a break below could take the pair towards 1.1024 (Oct 10th low).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday, extending its weekly decline, as oil prices fell and the safe-haven greenback benefited from further volatility in financial markets. Adding to pressure on the loonie, the price of oil, one of Canada’s major exports, was pressured by global recession fears and weak oil demand, especially in China. U.S. crude prices settled 3.9% lower at $85.61 a barrel.Domestic data was mixed, showing that factory sales fell 2.0% in August from July and that wholesale trade was up 1.4%.The loonie was down 1% at 1.3890 to the greenback, or 71.99 U.S. cents, after trading in a range of 1.3705 to 1.3897. Immediate resistance can be seen at 1.3896 (23.6%fib), an upside break can trigger rise towards 1.3967 (Higher Bollinger Band).On the downside, immediate support is seen at 1.3807(5DMA), a break below could take the pair towards 1.3736 (38.2%fib).
USD/JPY: The dollar rose to fresh 32-year high on the yen on Friday as red-hot U.S. inflation data pointed to more aggressive interest rate hikes by Federal Reserve. U.S. core inflation recorded its biggest annual increase in 40 years, reinforcing views that interest rates would stay higher for longer with the risk of a global recession. The next U.S. interest rate decision is due on Nov. 1-2.U.S. consumer sentiment continued to improve steadily in October, but households' inflation expectations deteriorated a bit, a survey showed. The dollar continued its march higher against a beleaguered yen, hitting a fresh 32-year peak of 148.86. It was last up 1% at 148.73 yen . The dollar was on track to post its best weekly performance against the Japanese unit since roughly mid-August. Strong resistance can be seen at 148.70 (23.6%fib), an upside break can trigger rise towards 149.00 (Psychological level).On the downside, immediate support is seen at 146.98(5DMA), a break below could take the pair towards 146.26(38.2%fib).
Equities Recap
European stocks closed higher on Friday, extending gains from the previous session, amid hopes that U.S. inflation may have peaked and would start trending lower in the coming months.
The UK's benchmark FTSE 100 closed up by 0.12 percent, Germany's Dax ended up by 0.67 percent, and France’s CAC finished the up by 0.90 percent.
Wall Street stocks closed sharply lower on Friday as investors worried about inflation and rising interest rates.
Dow Jones closed down by 1.34 percent, S&P 500 ended down 2.37 percent, Nasdaq finished the day down by 3.08 percent.
Treasuries Recap
Treasury yields on Friday edged higher after a red-hot U.S. inflation print the prior day raised market expectations for where the Federal Reserve's interest rate policy will peak in 2023 closer to 5%.
The two-year notes' yield, which typically moves in step with interest rate expectations, jumped to a 15-year high of 4.535% on Thursday. It closed lower but on Friday moved up 6 basis points at 4.509%.
The yield on 10-year Treasuries rose 6.9 basis points to 4.023% but remained under the 4% mark, while the yield on the 30-year Treasury bond was up 5.7 basis points at 3.991%.
Commodities Recap
Gold slipped on Friday and was on track for a weekly fall, as a stronger U.S. dollar and prospects of more steep rate hikes from the Federal Reserve dented demand for the non-yielding bullion.
Spot gold was down 0.5% to $1,658.10 per ounce by 0920 GMT. Prices have fallen more than 2% so far this week.U.S. gold futures slipped 0.8% to $1,664.30.
Oil prices plummeted more than 3% on Friday as global recession fears and weak oil demand, especially in China, outweighed support from a large cut to the OPEC+ supply target.
Brent crude futures dropped $2.94, or 3.1%, to settle at $91.63 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell $3.50, or 3.9%, to $85.61.
The Brent and WTI contracts both oscillated between positive and negative territory for much of Friday but fell for the week by 6.4% and 7.6%, respectively.