America’s roundup: Dollar dips as EU migration deal boosts Euro, Wall street ends higher, Gold up from 6-month lows, Oil gains on anticipation of sanctions on iran-june 30th,2018
• US May Core PCE Price Index YY, 2.0%, 1.9% forecast, 1.8% previous.
• US May PCE Price Index YY, 2.3%, 2.0% previous.
• US May Personal Consump Real, 0.0%, 0.4% previous.
• US May Personal Income MM, 0.4%, 0.4% forecast, 0.3% previous.
• US May Consumption, Adjusted MM, 0.2%, 0.4% forecast, 0.6% previous.
• US Jun Chicago PMI, 64.1, 60.0 forecast, 62.7 previous.
• US Jun U Mich Sentiment Final, 98.2, 99.2 forecast, 99.3 previous.
• US Jun U Mich Expectations Final, 86.3, 87.4 previous.
• US Jun U Mich 5-Yr Inf Final, 2.6%, 2.6% previous.
• US ECRI Weekly Annualized w/e, 2.8%, 3.1% previous.
• U.S. Treasury chief Mnuchin slams report that Trump wants to exit WTO.
• Canada hits back at U.S. over tariffs, says it won’t back down.
• Euro zone inflation rises past ECB target on energy, food costs.
• ECB mulls small “Twist” to keep borrowing costs low –sources.
• UK economy thaws in April, August rate rise in view.
• CA Apr GDP MM, 0.1%, 0.0% forecast, 0.3% previous.
• CA May Producer Prices YY, 3.1%, 2.4% previous.
• CA May Raw Materials Prices YY, 15.1%, 8.9% previous.
Looking Ahead – Economic Data (GMT)
• 30 Jun 01:00 China Jun NBS Non-Mfg PMI, 54.90 previous
• 30 Jun 01:00 China Jun NBS Manufacturing PMI, 51.6 forecast, 51.9 previous
• 30 Jun 01:00 China Jun Composite PMI, 54.6 previous
• 1 Jul 23:30 Asutralia Jun AIG Manufacturing Index, 57.50 previous
• 1 Jul 23:50 Japan Jun Foreign Reserves USD, 1,254.50 bln previous
• 1 Jul 23:50 Japan Q2 Tankan Big Mf Idx, 22 forecast, 24 previous
• 1 Jul 23:50 Japan Q2 Tankan Big Mf Outlook DI, 20 forecast, 20 previous
• 1 Jul 23:50 Japan Q2 Tankan Big Non-Mf Index, 23 forecast, 23 previous
• 1 Jul 23:50 Japan Q2 Tankan big non-mf outlook DI, 22 forecast , 20 previous
• 1 Jul 23:50 Japan Q2 Tankan All Big Capex Est, 9.3% forecast, 2.3% previous
• 1 Jul 23:50 Japan Q2 Tankan Small Mf Idx, 13 forecast, 15 previous
• 1 Jul 23:50 Japan Q2 Tankan Sm Mf Outlook DI, 11 forecast, 12 previous
• 1 Jul 23:50 Japan Q2 Tankan Small Non-Mf Idx, 9 forecast, 10 previous
• 1 Jul 23:50 Japan Q2 Tankan sm non-mf outlook DI, 6 forecast, 5 previous
• 1 Jul 23:50 Japan Q2 Tankan All Sm Capex Est, -13.1% forecast, -16.8% previous
• 2 Jul 00:30 Japan Jun Nikkei Mfg PMI, 53.1 previous
• 2 Jul 01:45 China Jun Caixin Mfg PMI Final, 51.0 forecast, 51.1 previous
Looking Ahead – Events, Other Releases (GMT)
• 30 Jun 09:15 Bank of England Chief Economist Andy Haldane: Young Quakers “New Economy Now” Conference in London
• 2 Jul 07:00 Riksbank holds monetary policy meeting 3 in Stockholm
• 2 Jul 13:30 Participation by ECB’s Peter Praet in a panel at the Informal Seminar on the occasion of Erkki Likkanen’s farewell organised by the Bank of Finland in Helsinki
EUR/USD is likely to find support at 1.1556 levels and currently trading at 1.1684 levels. The pair has made session high at 1.1682 and hit lows at 1.1628 levels. The euro rose against the greenback on Friday after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angela Merkel, but traders said the gains may be short-lived because of deep divisions within the EU.A tense summit that dragged on into early Friday morning yielded vague pledges from EU leaders to strengthen external borders and explore new migrant centers. The deal eased concern over a standoff between Italy and the rest of the trading block and the euro subsequently rallied against the dollar. On the data front, Euro zone inflation rose to its highest rate in more than a year this month as surging energy prices pushed price growth above the European Central Bank’s target, even if only temporarily, data from Eurostat showed on Friday. Inflation in the 19 countries sharing the euro rose to 2 percent in June from 1.9 percent a month earlier, in line with analyst expectations as a big surge in energy costs more than offset a muted rise in the price of services and industrial goods. The dollar index against a basket of six major currencies was down 0.7 percent at 94.66. It had risen as high as 95.534 on Thursday, a level last seen almost a year ago. Despite Friday’s drop, the index was up 5.5 percent this quarter, its first rise since the final quarter of 2016.
GBP/USD is supported in the range of 1.3100 levels and currently trading at 1.3210 levels. It reached session high at 1.3208 and dropped to session low at 1.3132 levels. Sterling firmed against the dollar on Friday after a better-than-expected revision to Britain’s first-quarter economic growth raised hopes of monetary policy tightening in the coming months. Adding to the bounce, the European Union’s chief negotiator Michel Barnier said that EU leaders had made progress in Brexit talks, though “huge” differences remained. The British economy grew 0.2 percent in the January to March quarter, against a preliminary number of 0.1 percent, providing some ammunition to a hawkish Bank of England. The data also showed Britain’s services sector gathered steam in April, raising expectations of a second-quarter pick-up after a sluggish start to 2018 that has stopped the Bank of England raising interest rates so far this year. Market expectations for an August rate rise grew to 60 percent after Friday’s data release from 50 percent earlier this week. With momentum in Britain’s economy still fragile and uncertainty over Britain’s future relationship with the European Union, most traders remain cautious about the prospect of rate hikes and the pound. The British economy performed relatively poorly in the first quarter after cold weather hit retail demand and the construction industry.
USD/CAD is supported at 1.3117 levels and is trading at 1.3131 levels. It has made session high at 1.3266 and lows at 1.3129 levels. The Canadian dollar strengthened to a 10-day high against its U.S. counterpart on Friday after a surprise expansion of the domestic economy in April raised expectations for a Bank of Canada interest rate hike next month. The Canadian economy unexpectedly grew by 0.1 percent in April, even though bad weather affected major sectors such as retail trade and construction, Statistics Canada data indicated on Friday. Analysts in a poll had predicted no change from March. April marked the seventh time in the last eight months that the economy has expanded. Bank of Canada Governor Stephen Poloz on Wednesday kept markets guessing as to whether rates would rise next week and said economic data would decide the next move. The central bank has hiked rates three times since July 2017.Chances of an interest rate hike at the July 11 announcement jumped to more than 80 percent from 67 percent before the data, the overnight index swaps market indicated. The price of oil, one of Canada’s major exports, held near 3-1/2 year highs as U.S. sanctions against Iran threatened to remove a substantial volume of crude oil from world markets at a time of rising global demand. The Canadian dollar was last trading 0.6 percent higher at C$1.3131 to the greenback, its strongest since June 19.
USD/JPY is supported around 110.29 levels and currently trading at 110.63 levels. It peaked to hit session high at 110.94 and made session lows at 110.58 levels. The Japanese yen strengthened against the dollar on Friday as escalating global trade tensions increased demand for safe haven assets. Trade tensions are set to remain high, with the U.S. administration due to activate tariffs on Chinese goods worth $34 billion on July 6, which is expected to prompt a tit-for-tat response from Beijing. U.S. consumer prices accelerated in the year to May, with a measure of underlying inflation hitting the Federal Reserve’s 2 percent target for the first time in six years. The rise in price pressures reported by the Commerce Department on Friday will probably not shift the Fed from its stated path of gradual interest rate increases as policymakers have indicated they would not be too concerned with inflation overshooting its target. Consumer prices as measured by the personal consumption expenditures (PCE) price index rose 0.2 percent after a similar gain in April. In the 12 months through May, the PCE price index surged 2.3 percent. That was the largest rise since March 2012 and followed a 2.0 percent increase in April. The dollar index, which measures the greenback against a basket of six currencies, was down 0.76 percent at 94.663.
European shares ended a decent quarter with a bounce on Friday, enjoying a respite from trade war fears after China eased foreign investment limits.
UK’s benchmark FTSE 100 closed up by 0.6 percent, the pan-European FTSEurofirst 300 ended the day up by 0.97 percent, Germany’s Dax ended up by 1.2 percent, France’s CAC finished the day up by 1.1 percent.
A surge in Nike Inc shares and a rally in bank stocks lifted Wall Street’s major stock indexes on Friday, though all three still posted weekly declines.
Dow Jones closed up by 0.26 percent, S&P 500 ended up by 0.10 percent, Nasdaq finished the day up by 0.14 percent.
Longer-dated Treasury yields fell on Friday and the yield curve hit its flattest level in more than 10 years after U.S. consumer spending growth in May undershot analysts’ expectations.
Benchmark 10-year notes gained 4/32 in price to yield 2.833 percent, holding just above a low of 2.822 percent reached on Thursday, which was the lowest since May 31.
The yield curve between two-year and 10-year notes flattened to 30 basis points, the flattest level since 2007.
Gold prices rose on Friday from six-month lows as a weaker U.S. dollar prompted bargain hunting, but bullion was on track for weekly and monthly declines and analysts said many speculators maintained short positions, leaving prices vulnerable to further losses.
Spot gold added 0.4 percent at $1,252.81 an ounce by 1:34 p.m. EDT (1734 GMT). On Thursday, it touched $1,245.32, its lowest since Dec. 13, 2017.U.S. gold futures for August delivery settled up $3.50, or 0.3 percent, at $1,254.50 per ounce.
Oil prices rose on Friday on concern that U.S. sanctions against Iran would remove a substantial volume of crude oil from world markets at a time of rising global demand.
U.S. crude rose 70 cents a barrel to settle at $74.15, on track for a weekly rise of 8.2 percent. The session high of $74.43 was the highest since Nov. 26, 2014.
Benchmark Brent crude settled up $1.59 at $79.44 a barrel.
Source: FXWire Media Round Ups