News

America’s Roundup: Dollar rises on bullish data, Wall Street climbs, Gold drops, Oil edges up as recession fears ease but OPEC outlook weighs-August 17th,2019

Market Roundp

• Dollar recovers composure after positive economic data

• Speculation grows of aggressive central bank easing

•Wall Street boosted by stimulus hopes

• US Jul Building Permits, 1.336M , 1.270M  forecast, 1.232M previous

• US Jul Building Permits MoM 8.4%, 3.1% forecast, -5.2% previous

• US Jul Housing Starts  1.191M, 1.257M forecast,1.241M previous

• US Jul Housing Starts (MoM) -4.0%,-1.8% previous    

• Canada Jun Foreign Securities purchases -3.98B, 10.28B previous  
 
• Canada Jun Foreign Securities purchases by Canadians  6.61B, 4.12B previous  
 
• Russia PPI (MoM) -2.7%,-0.6% previous
    
• Russia PPI (YoY) 1.1%,4.1% previous

• US Aug Michigan 5-Year Inflation Expectations  2.60%,2.50%  previous

• US Aug Michigan Consumer Expectations  -82.3, 89  forecast, 90.50 previous  
 
• US Aug Michigan Current Conditions 107.4,110.4 forecast,110.4 previous

Looking Ahead – Economic Data (GMT)

• No Economic Data

Looking Ahead – Events, Other Releases (GMT)

• No Significant Events

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Friday, as dollar rose on bullish economic data while expectations of central bank stimulus weighed on the single currency. U.S. homebuilding fell for a third straight month in July amid a steep decline in the construction of multi-family housing units, but a jump in permits to a seven-month high offered hope for the struggling housing market. Better-than-expected retail sales data in the United States on Thursday also encouraged buying of the dollar. The euro fell 0.14% to $1.1090, shy of the two-year low of $1.1025 it reached on Aug. 1. Friday's fall was caused by growing expectations of an interest rate cut by the European Central Bank after Governing Council member Olli Rehn suggested on Thursday that the central bank could restart its quantitative easing program and was open to extending it into equity purchases.Immediate resistance can be seen at 1.1145 (5 DMA), an upside break can trigger rise towards 1.1221 (50 DMA).On the downside, immediate support is seen at 1.1065 (Daily Low), a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: The British pound gained against dollar  on Friday, as a combination of news and decent data provided enough ammunition to speculators to buy the struggling British currency. After being hit by growing concerns of Britain crashing out of the European Union without a deal by Oct. 31 after Boris Johnson became prime minister last month, the pound saw a brief reprieve this week.The pound advanced to an eight-day high versus the greenback and also jumped 1% against the euro currency , its biggest single day rise since late March. Economic data has also been favourable this week.British retail sales unexpectedly expanded in July and signaled that consumers were taking the prospect of Brexit in their stride for now, helped by firm wage data and modest inflation pressures, according to data released earlier this week.Immediate resistance can be seen at 1.2176 (Daily High), an upside break can trigger rise towards 1.2216 (21 DMA).On the downside, immediate support is seen at 1.2084 (5 DMA), a break below could take the pair towards 1.2000 (Psychological level).

USD/CAD:  The Canadian dollar edged higher against its U.S. counterpart on Friday, with the currency rebounding from an eight-day low it hit the previous session as investor appetite for risk improved. Hopes of Chinese economic stimulus and rate cuts from some major central banks helped drive a broad rise in U.S. stocks, as a bruising week for markets drew to a close. Canada exports many commodities, including oil, so a better outlook for global economic growth could boost its economy. At  (1958 GMT), the Canadian dollar  was trading 0.32% higher at 1.3270 to the greenback. The currency, which on Thursday touched its weakest intraday level since Aug. 7 at 1.3339, was on track to fall 0.6% for the week. Immediate resistance can be seen at 1.3326 (Daily High), an upside break can trigger rise towards 1.3400  (Psychological level).On the downside, immediate support is seen at 1.3253 (11 DMA), a break below could take the pair towards 1.3200 (21 DMA).

USD/JPY: The U.S. dollar edged higher against the yen on Friday, after a surge in U.S. retail sales eased concerns about the world’s top economy, but traders cautioned against reading too much into one piece of data given the growing risks to the outlook.The greenback was on course for a weekly gain against safe-haven currencies such as the Japanese yen and the Swiss franc, pointing to some respite for frayed nerves after fears of recession and protests in Hong Kong rattled financial markets. This week’s inversion in the U.S. Treasury yield curve, which has historically preceded several past U.S. recessions, has stoked fresh worries about the economic impact of the Sino-U.S. trade war.Strong resistance can be seen at 107.15 (21 DMA), an upside break can trigger rise towards 107.62 (50 DMA).On the downside, immediate support is seen at 106.03 (61.8% retracement level), a break below could take the pair towards 105.65 (Aug 14th low). 

Equities Recap

European shares rebounded from six-months lows on Friday, ending a tumultuous week on a positive note as hopes of fiscal stimulus from Germany lifted sentiment and sparked a rally in the battered banks sector, helping them post their best day in 4-1/2 months.

The UK's benchmark FTSE 100 closed up by 0.71percent, Germany's Dax ended up by 1.31 percent, and France’s CAC finished the up by 1.22 percent.

Wall Street's three major indexes rose slightly on Friday as Intel's weak results put the techology sector under pressure and the energy index tumbled along with the price of oil and mixed first-quarter GDP data gave investors some pause.

Dow Jones closed up by 1.20 percent, S&P 500 ended up 1.44 percent, Nasdaq finished the day up by 1.67 percent.

Treasuries Recap

Benchmark U.S. Treasury yields rose from three-year lows on Friday as investors evaluated how far damage from the U.S.-China trade war will spread, after the inversion of a key part of the yield curve this week raised fears of a U.S. recession.

Benchmark 10-year notes fell 9/32 in price on Friday to yield 1.556%, after reaching a three-year low of 1.475% on Thursday. Continuing concern about economic growth may send the yields below record lows of 1.321% reached in July 2016.

Commodities Recap

Gold fell on Friday as stocks and the dollar firmed, but fears of a slowing global economy and lack of clarity on the U.S.-China trade war kept bullion on track for a third straight weekly gain.

Spot gold was down 0.5% at $1,514.70 per ounce as of 1:42 p.m. EDT (1751 GMT), but is up over 1% so far this week.U.S. gold futures settled down 0.5% at $1,523.60.

Oil prices on Friday rebounded from a two-day drop, alongside equities as expectations of further stimulus by central banks helped to ease recession concerns.

Brent crude was up 37 cents, or 0.6%, at $58.60 a barrel by 1:37 p.m. EDT (1737 GMT), after falling 2.1% on Thursday and 3% the previous day.

U.S. crude rose 26 cents to $54.73 a barrel, having dropped 1.4% in the previous session and 3.3% on Wednesday.


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