Market Roundup
- US consumers flex muscle retail sales beat; import prices signal weak inflation (-1.1 vs -1.4 forecast).
- U. Mich prelim Feb consumer sentiment index at 90.7 vs final Jan 92.0, 5-yr inflation falls to 2.4%.
- Philly Fed forecaster's survey shows US Q1 GDP seen at +2.0 pct vs pvs forecast +2.5 pct.
- GDPNow model f/c for real GDP in Q1 '16 is 2.7% up from 2.5% on February 9.
- Fed's Dudley: eyes risks, large outside shock, but says Fed policy easy enough.
- Fed's Dudley: dismisses negative US rates, sees economic momentum.
- BOJ's Nakaso: undecided how far can go with negative rates, negative rates adopted as a response to volatile markets risk of deflation.
- Germany's FinMin Schaeuble confident of EU reaching deal with Britain.
- Germany's FinMin Schaeuble Deutsche Bank has enough capital, is strong lender.
- Shares gain on reduced global economy fears; oil rallies. Gold heads for best week in four years on safe-haven appeal.
Looking Ahead - Economic Data (GMT)
- --:-- China Exports YY*Jan forecast -1.9%, -1.4%-previous
- --:-- China Imports YY* Jan forecast -0.8%, -7.6%- previous
- --:-- China Trade Balance USD* Jan forecast 58.85b, 60.09b- previous
- 23:50 Japan GDP QQ* Q4 forecast -0.3%, 0.3%- previous
- 23:50 Japan GDP QQ Annual* Q4 forecast -1.2%, 1%- previous
- 23:50 JP GDP QQ Pvt Cons Prelim Q4 forecast -0.6%, 0.4%- previous
- 23:50 Japan GDP QQ Capital Expend. Q4 forecast -0.2%, 0.6%- previous
- 23:50 Japan GDP QQ External Demand Q4 forecast 0.2%, 0.1%- previous
- 04:30 Japan Industrial Output Rev* Dec -1.4%- previous
- 04:30 Japan Capacity Utilization Index Change MM* Dec -0.1%- previous
Looking Ahead - Events, Other Releases (GMT)
Currency Summary
EUR/USD is likely to find support at 1.1200 levels and currently trading at 1.1257 levels. The pair has made session high at 1.1275 and hit lows at 1.1214 levels. The dollar rose against euro on Friday after data showed U.S. consumer spending appeared to have regained its strength in January, supporting the view the Federal Reserve may still raise interest rate. U.S. consumer spending regained momentum in January as households ramped up purchases of a variety of goods, in a hopeful sign that economic growth was picking up after slowing at the end of 2015. The Commerce Department said retail sales increased 0.6 percent last month after an unrevised 0.3 percent decline in December. The dollar index, which tracks the dollar against basket of currencies, rose to a session high of 96.133 after the retail sales data release. It was last up 0.5 percent to 96.047. The currency's strongest level of the session was $1.1281, while its weakest level was at $1.1210.
GBP/USD is supported in the range of 1.4400 and currently trading at 1.4508 levels. It reached session high at 1.4521 and hit low at 1.444 levels. Sterling declined against dollar on Friday as risk sentiment eased as world stock rebounded. Uncertainty about Britain's membership with European Union also weighed on the currency pair. Sterling shed 0.2 percent against US dollar to trade at $1.4495. Bank of England chief Mark Carney quashed talk that interest rates could be cut in the coming months. Number of banks, however, has suggested a deal at next week's EU summit that allows Prime Minister David Cameron to launch an aggressive campaign to stay in the 28-country bloc has the potential to turn sentiment more positive on the pound. Against the dollar, sterling was down 0.2 percent lower at $1.4447. It gained about 0.6 percent to 77.76 pence per euro, having weakened to 78.975 pence on Thursday. Sterling's trade-weighted index edged up to 87.1, having hit a 15-month low of 86.5.
USD/CAD is supported at 1.3780 levels and is trading at 1.3855 levels. It has made session high at 1.3999 and lows at 1.3867 levels. The Canadian dollar strengthened against it U.S. counterpart on Friday after a solid gain in oil prices supported the Canadian dollar. Oil prices surged as much as 12 percent on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut. On the data front, Canadian home prices edged down in January for a second month in a row. The index, which measures price changes for repeat sales of single-family homes, showed national home prices dipped 0.1 percent in January from a month earlier. The currency's strongest level of the session was C$1.3808, while it hit its weakest since Feb. 3 at C$1.362.
USD/JPY is supported around 115.00 levels and currently trading at 115.80 levels. It peaked to hit session high at 115.85 and made session lows at 115.15 levels. U.S dollar edged higher against the Japanese yen on Friday as crude oil prices surged as much as 12 percent on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut. Japanese Finance Minister Taro Aso said on Friday the government would take necessary steps to deal with currency volatility, the minister's strongest hint of intervention since the yen began its surge this month. The dollar fell below 111 yen on Thursday to hit its lowest level since October 2014, triggering market speculation that Tokyo could conduct yen-selling intervention to prevent a further yen spike from hurting the export-reliant economy. On Friday, the dollar rose 0.3 percent to 112.75 yen. It hit a session high of 113.16 following the retail sales data release
Equities Recap
European shares rebounded on Friday as Banking stocks rallied, helping stock markets stage a partial recovery from recent losses earlier in the week.
UK's benchmark FTSE 100 closed up by 3.1 percent, the pan-European FTSEurofirst 300 ended the day up by 2.83 percent, Germany's Dax closed up at 2.22 percent, and France's CAC finished the day up by 2.3 percent.
U.S. stocks rallied on Friday, snapping a five-day losing streak in the S&P 500, as financial, commodity-related and other beaten-down shares rebounded.
Dow Jones closed up by 1.98 percent, S&P 500 ended the day up by 1.93 percent, Nasdaq finished the day up by 1.63 percent.
Treasuries Recap
U.S. Treasury yields climbed on Friday as stocks rallied after a report showed that U.S. consumer spending regained momentum in January, suggesting the economy may not be slowing as much as many investors had feared in recent weeks.
The benchmark 10-year note was last down 27/32 in price to yield 1.737 percent, up from 1.644 percent late on Thursday.
The 30-year bond was last down 1-13/32 in price to yield 2.588 percent, up from 2.520 percent on Thursday.
Commodities recap
Gold prices eased on Friday after soaring 5 percent the previous day, pressured by profit-taking after the biggest rally in more than seven years, but the metal was still set for its best week in four years as investors rushed to safe haven assets.
Spot gold was down 0.7 percent at $1,238.36 an ounce at 3:07 p.m. EST (2007 GMT), but has risen 5.5 percent this week, on track for the fourth straight week higher and the biggest weekly gain since October 2011.
U.S. gold futures for April delivery settled down 0.7 percent at $1,239.40 an ounce but were on track to rise 7.1 percent this week, the sharpest increase since December 2008.
Oil prices surged as much as 12 percent on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut, while a bounce in stock markets fed appetite for risk.
U.S. crude's front-month settled up $3.23, or 12.3 percent, at $29.44 per barrel, reaching a session high of $29.66. It hit a 12-year low of $26.05 the previous day. For the week, it lost 4.7 percent.
Brent's front-month closed up $3.30 at $33.36 a barrel, having slid below $30 on Thursday. Weekly losses were pared to 2 percent.
