Market Roundup
• US Markit Mfg PMI final 51.3 vs 51.4 previous, highest since January.
• US Construction spending dips in May -0.8% vs 0.6% forecast, -2% previous.
• US ISM Mfg PPM 53.2 vs 51.4 forecast, 51.3 previous; employment Index beats 50.4 vs 49 forecast, 49.2 previous.
• Fed’s Fischer: as Fed considers Brexit must also consider domestic economy developments.
• Fed’s Fischer: expects to continue on the slow very gradual path, Fed doesn’t want to move to negative rates.
• Fed’s Mester: oil price, China continue to be risks to the outlook, US labor market sound, gradual hikes appropriate.
• Buba’s Weidmann EU should give UK a quick and fair exit deal, Brexit may slow growth in Euro zone, Germany, sees no need for further stimulus due to Brexit vote.
• Atlanta Feds GDPNow dips 0.1-pp to 2.6% on lower residential investment outlook.
• NY Fed’s Nowcast :US GDP seen growing at 2.21 in third quarter vs 2.14 estimate June 24th.
Looking Ahead - Economic Data (GMT)
• 01:00 Australia MI Inflation Gauge Jun -0.2%-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1083 levels and currently trading at 1.1138 levels. The pair has made session high at 1.1168 and hit lows at 1.1110 levels. The U.S. dollar declined against euro on Friday as decline in benchmark U.S. Treasury yields reduced the attractiveness of U.S. debt and traders expected dovish Federal Reserve policy through this year. Data on Friday showed U.S. factory activity expanded at a healthy pace in June as new orders, output and exports rose, providing another sign that U.S. manufacturing was regaining its footing after weakness early this year. The Institute for Supply Management said its national factory index rose to 53.2 in June, the highest since February last year, from 51.3 in May. The main data in the coming week is U.S. non-farm payrolls numbers due on Friday, which is expected to show employers in the world's largest economy added 180,000 jobs last month. The euro was last up 0.3 percent against the dollar at $1.1140 after hitting a one-week high of $1.1168 in morning U.S. trading.
GBP/USD is supported in the range of 1.3201 currently trading at 1.3274 levels. It reached session high at 1.3285 and hit low at 1.3255 levels. The British pound declined against the dollar on Friday, as the pound was the dragged down by expectations that the Bank of England is likely to ease policy in coming months to boost the economy from the impact of Britain's vote to leave the European Union. The currency showed little reaction to a better-than-expected reading of manufacturing sector activity for June. The Markit/CIPS UK Manufacturing PMI rose to 52.1 in June from 50.4 in May, its strongest reading since January and better than the consensus forecast for a reading of 49.9. Against the dollar, sterling was 0.3 percent lower at $1.3277, not far from a 31-year low of $1.3122 struck on Monday, and on track for a second straight week of losses. The broad-based trade-weighted sterling fell to 79.7, its lowest since mid-2013.
USD/CAD is supported at 1.2862 levels and is trading at 1.2908 levels. It has made session high at 1.2926 and lows at 1.2862 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as oil prices rose and investors attention turned towards upcoming Bank of Canada's rate decision. The central bank, which cut rates twice last year to counter the effects of a slump in crude prices, will provide updated economic forecasts at its next interest rate decision on July 13 and is widely expected to leave rates unchanged. Currency markets were shaken by last week's so-called Brexit vote, and sterling lost ground again on Thursday after Bank of England Governor Mark Carney said he saw the need for more stimulus and a Bloomberg report hinted at more European Central Bank easing. Also reduced expectations that the Fed would raise rates this year in the wake of Britain's surprise vote last week to exit the European Union hurt the dollar on Friday. Concerns about the global economy have made chances of a U.S. rate rise in coming months less likely, but much will depend on U.S. economic data and markets will be watching non-farm payrolls due on July 8 in particular for clues.
AUD/USD is supported around 0.7440 levels and currently trading at 0.7496 levels. It hit session high at 0.7503 and made session lows at 0.7473 levels. The Australian dollar edged up against its U.S. counterpart on Friday following encouraging Australian economic data and on growing doubts about Federal Reserve’s raising rates in the coming days. Home prices across Australia's major cities rose for a sixth straight month in June as falling mortgage rates kept demand hot in Sydney and Melbourne. Friday's figures from property consultant CoreLogic RP Data showed its index of home prices for the combined capital cities firmed 0.5 percent in June, following very strong gains of 1.6 percent in May and 1.7 percent in April. The Reserve Bank of Australia (RBA) has long been concerned about an overheating housing market, but that did not stop it cutting interest rates to a record low of 1.75 percent in May after inflation proved much lower than expected. The central bank holds its July meeting next week and is thought likely to stay on hold for the moment, though markets are wagering it could well ease again in August.
Equities Recap
European shares rose on Friday, lifted by expectations that the European Central Bank would take action to support markets in order to ease worries about the fallout from Britain's vote to leave the European Union.
UK's benchmark FTSE 100 closed up 1.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.74 percent, Germany's DAX ended up by 1 percent, France’s CAC finished the day up by 0.8 percent.
The major U.S. stock indexes rose on Friday, for a fourth straight day of gains, helped by encouraging U.S. manufacturing data.
Dow Jones closed up by 0.11 percent, S&P 500 ended up by 0.20 percent, Nasdaq finished the day up by 0.41percent.
Treasuries Recap
The U.S. Treasuries market rallied on Friday, with the 30-year yield hitting its lowest since the 1950s in a worldwide scramble for bonds on expectations of weak global growth and more policy stimulus from major central.
Benchmark U.S. 10-year Treasury notes were up 10/32 in price to yield 1.456 percent, down more than 3 basis points after nearly matching its record low of 1.381 percent earlier.
The U.S. 30-year bond yield touched 2.189 percent in overseas trading earlier on Friday. This was the lowest level since the 1950s, Bank of America Merrill Lynch data showed.
The 30-year bond ended up 1-17/32 point in price for a yield of 2.241 percent, down almost 7 basis points on the day. At one point, the 30-year yield was set for its steepest weekly decline since December 2014 banks.
Commodities Recap
Gold rose 1 percent on Friday and was heading for its fifth weekly gain, supported by a weaker dollar and prospects for further monetary policy easing in the wake of Britain's vote to leave the European Union.
Spot gold rose to a session high of $1,341.40 an ounce, and was 1.2 percent higher at $1,337.6 by 2:23 p.m. EDT (1808 GMT). The metal gained 8.8 percent in June, its biggest monthly rise since February.
U.S. gold futures for August delivery settled up 1.4 percent at $1,339.
Oil prices surged on Friday, and Brent crude posted its largest weekly gain since mid-May, as investors positioned for the start of third quarter trading while a weaker dollar boosted prices of most commodities.
Brent crude futures settled up 64 cents, or 1.3 percent, at $50.35 a barrel. It was down 1 percent early in the session.
U.S. crude's West Texas Intermediate (WTI) futures rose 66 cents, or 1.4 percent, to settle at $48.99.
