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Home » Blogs » America’s roundup: Dollar gains for 2nd day as global trade tension heats up, US stocks ends mixed, Gold climbs, Oil slips as trade war worries outweigh Iran sanctions-september 1st 2018

America’s roundup: Dollar gains for 2nd day as global trade tension heats up, US stocks ends mixed, Gold climbs, Oil slips as trade war worries outweigh Iran sanctions-september 1st 2018

America’s roundup: Dollar gains for 2nd day as global trade tension heats up, US stocks ends mixed, Gold climbs, Oil slips as trade war worries outweigh Iran sanctions-september 1st 2018

Market Roundup

• Canada, U.S. NAFTA talks turn tense, Ottawa won’t sign ‘just any deal’.

• Argentina peso rises as central bank intervenes, IMF voices support.

• World Bank offers ‘strong support’ for Argentina amid market turbulence.

• US Aug Chicago PMI, 63.6, 65.5 previous, 63.0 forecast.

• US Aug U Michigan Sentiment Final, 96.2, 95.3 previous, 95.5 forecast.

• US Aug U Michigan Current Conditions Final, 110.3, 107.8 previous, 108.1 forecast.

• CA Jul Producer Prices m/m, -0.2%, 0.5% previous, 0.7% revised.

• CA Jul Producer Prices y/y, 6.6%, 5.1% previous, 5.3% revised.

• Juncker pledges to boost auto tariffs if Trump reneges on agreement.

• ECB confident about growth but euro zone must do more: de Guindos.

Looking Ahead – Economic Data (GMT)

• 2 Sep 22:45 New Zealand Q2 Terms Of Trade q/q, -1.9% previous, 1.0% forecast

• 2 Sep 22:45 New Zealand Q2 Export Volumes SA, -2.9% previous, 2.3% forecast

• 2 Sep 22:45 New Zealand Q2 Import Prices SA, -0.3% previous, 2.0% forecast

• 2 Sep 22:45 New Zealand Q2 Export Prices SA, -2.2% previous, 3.0% forecast

• 2 Sep 23:50 Japan Q2 Business Capex (MOF) y/y, 3.4% previous

• 3 Sep 00:30 New Zealand Aug Nikkei Mfg PMI, 52.5 previous

• 3 Sep 01:30 Australia Q2 Business Inventories, 0.7% previous, 0.3% forecast

• 3 Sep 01:45 China Aug Caixin Mfg PMI Final, 50.8 previous, 50.6 forecast

Looking Ahead – Events, Other Releases (GMT)

• 3 Sep 05:40 Bank of Japan Governor Haruhiko Kuroda gives keynote speech at a symposium commemorating the 30th anniversary of stock index futures in Tokyo.

• 3 Sep 06:30 ECB Board member Yves Mersch gives a banking sector speech in Paris entitled “Strengthening the European Financial Industry amid disruptive global challenges”.

 

Currency Summaries

EUR/USD is likely to find support at 1.1528 levels and currently trading at 1.1601 levels. The pair has made session high at 1.1650 and hit lows at 1.1582 levels. The euro dipped against dollar on Friday as dollar rose for a second straight session on Friday on concerns about global trade conflict as the United States sparred with the European Union, China, and Canada. The greenback rallied late Thursday in a safe-haven move after Bloomberg News reported that U.S. President Donald Trump wanted to move ahead on a plan to impose tariffs on Chinese imports worth $200 billion next week. Trade tensions had also ratcheted up this week after the European commissioner in charge of trade on Thursday said the European Union’s detente on tariffs with the United States had not put to rest “profound disagreements” on trade policy. Trump also threatened in an interview with Bloomberg on Thursday to withdraw from the World Trade Organization if they don’t shape up. Those remarks dampened any positive sentiment following negotiations over the North American Free Trade Agreement (NAFTA). The dollar index was up 0.1 percent at 94.810. The euro was down 0.3 percent at $1.1601 after losing about 0.3 percent overnight when a rise in Italian government bond yields put additional pressure on the currency.

GBP/USD is supported in the range of 1.2900 levels and currently trading at 1.2955 levels. It reached session high at 1.3005 and dropped to session low at 1.2942 levels. Britain’s pound declined against the dollar on Friday as Brexit concerns weighed on the British currency. In late US trading, sterling fell a third of a percent to $1.2966, stepping further away from Thursday’s high of $1.3043, the highest since Aug. 3. Brexit minister Dominic Raab said he was “stubbornly optimistic” that Britain would reach a deal with the European Union on the terms of its departure from the bloc in time for an October meeting of EU leaders. After talks with the EU’s chief Brexit negotiator Michel Barnier, Raab said he was “as confident as before, if not more” that there will be a deal with the EU on Brexit. Foreigners’ net holdings of British government debt fell by a record amount last month, a move partly driven by a large volume of maturing bonds but one that also revived concerns about the effect of Brexit on investor demand. Investors were wary of buying the currency aggressively as underlying economic weakness remained. Markets will be closely watching Bank of England Governor Mark Carney’s comments about the central bank’s decision to raise interest rates in August next week.

USD/CAD is supported at 1.2985 levels and is trading at 1.3041 levels. It has made session high at 1.3085 and lows at 1.3018 levels. The Canadian dollar weakened to a one-week low against its U.S. counterpart on Friday as investor optimism dimmed that a deal to revamp the NAFTA trade pact would be reached. The mood of talks between Ottawa and Washington to update the North American Free Trade Agreement were soured by President Donald Trump’s comments that a pact would be on U.S. terms while Canada stood firm against signing just any deal. U.S. Trade Representative Robert Lighthizer said in a statement that U.S. officials would resume talks with their Canadian counterparts next Wednesday with the aim of getting a deal all three countries could sign. The loonie on Tuesday hit C$1.2887 – its strongest level in nearly three months as investors bet that a deal would be done by a Friday deadline. For the week, it was on track to fall 0.2 percent. On Thursday, data showed that the Canadian economy expanded in the second quarter at the fastest pace in a year as exports climbed, but the improved growth was not expected to trigger an interest hike next week from the Bank of Canada. The price of oil, one of Canada’s major exports, fell as concerns over the impact of a trade war depressed sentiment. U.S. crude oil futures settled down 0.6 percent at $69.80 a barrel. The Canadian dollar was trading 0.5 percent lower at C$1.3041 to the greenback.

AUD/USD is supported around 0.7152 levels and currently trading at 0.7191 levels. It hit session high at 0.7244 and made session lows at 0.7174 levels. The Australian dollar extended losses against its U.S. counterpart on Friday as worries about escalating tariff tensions between the United States and China weighed on Australian dollar. The Australian dollar was a tad weaker at $0.7185 after three straight sessions of declines and was at its lowest level since Aug. 24. The Aussie is now within spitting distance of a more than 1-1/2 year trough of $0.7146 touched earlier in the month. The Aussie has fallen more than 7 percent so far in 2018 while its New Zealand cousin has lost over 6 percent in that time. The currencies were knocked lower late Thursday on a report U.S. President Donald Trump told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week. Investors will be focussed on a deluge of macroeconomic data due next week including July retail sales on Monday, central bank monthly policy meeting on Tuesday and second quarter gross domestic product (GDP) Wednesday. The Reserve Bank of Australia (RBA) is widely expected to leave rates at record lows 1.50 percent awaiting a revival in inflation. Economists expect GDP growth to slow a bit to 0.7 percent after first-quarter’s brisk pace of 1.0 percent.

Equities Recap

European shares fell for a second day on Friday on reports that U.S. President Donald Trump is planning more tariffs on China, with Europe’s STOXX posting its worst monthly performance since February.

UK’s benchmark FTSE 100 closed down 1.2 percent, the pan-European FTSEurofirst 300 ended the day down  by 0.92 percent, Germany’s Dax ended down by 1.1 percent, France’s CAC finished the day down by 1.3 percent.

The S&P 500 ended flat while the Dow edged down and the Nasdaq closed higher in light trading on Friday as Canada and the United States concluded trade talks without resolution ahead of the Labor Day weekend.

Dow Jones closed down by 0.11 percent, S&P 500 ended down by 0.06 percent, Nasdaq finished the day up by 0.25 percent.

 

Treasuries Recap

Yields on longer-dated U.S. Treasuries rose on news that Canada and the United States had failed to reach an agreement on the North American Free Trade Agreement before the deadline on Friday set by President Donald Trump.

Longer-dated securities rose on Friday afternoon’s news, with the 30-year bond yield US30YT=RR at a session high of 3.025 percent, up 1.9 basis points from Thursday’s close.

Commodities Recap

Gold ticked higher on Friday despite a stronger dollar, as investors worried about an escalation in the U.S.-China trade dispute after fresh threats by U.S. President Donald Trump, though bullion was still headed for its fifth straight monthly decline.

Spot gold gained 0.1 percent at $1,200.70 per ounce by 1:34 p.m. EDT (1734 GMT) for a rise of about 4 percent from the 19-month low of $1,159.96 hit on Aug. 16. U.S. gold futures for December delivery settled up $1.70, or 0.1 percent, at $1,206.70 per ounce.

Oil prices slipped on Friday, pressured by renewed concerns that a global trade war could dent energy demand, although impending U.S. sanctions on Iran and falling Venezuelan output limited the decline.

Benchmark Brent crude oil fell 35 cents to settle at $77.42 a barrel. U.S. crude slipped 45 cents to settle at $69.80.

Source: FXWire Media Round Ups

 

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