Market Roundup
• Fed's Yellen says case for interest rate hike has strengthened.
• Yellen: U.S. economy nearing Fed's employment, inflation goals.
• Fed's Fischer suggests rate hikes on track for this year-CNBC.
• Fed's Bullard: could see rate hike this year-CNBC.
• Fed's Mester: Makes sense for U.S. to start raising rates-CNBC.
• Fed's Powell supports cautious, gradual pace of rate hikes- Bloomberg.
• Fed's Lockhart sees up to two rate hikes this year-Bloomberg.
• U.S. Q2 GDP growth revised lower just as forecast: +1/1% vs previous +1.2%
• Declining inventories curb U.S. Q2 growth; consumption surges.
• U.S. Core PCE +1.8 pct (cons +1.7 pct), previous +1.7 pct.
• U.S. U.Mich consumer sentiment index at lowest since April.
• Dollar Libor hits 7-year high ahead of Yellen.
• Mexico factory exports, consumer imports climb in July.
• Fitch: Colombia-FARC Deal Would Have Mid- and Long-Term Benefits.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events,
No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1153 levels and currently trading at 1.1192 levels. The pair has made session high at 1.1341 and hit lows at 1.1026 levels. The euro initially rose against the dollar on Friday but gave up gains and slipped sharply in volatile trading as investors focused on Federal Reserve Chair Janet Yellen's comments on an improving U.S. economy that bolstered the case for an interest rate increase. The U.S. currency had given up gains soon after Yellen spoke to central bankers, as she gave no indication that a rate hike was imminent. The dollar, however, then rose as traders re-assessed her words and took into account hawkish remarks from Fed Vice Chair Stanley Fischer. Friday's data on the second estimate of U.S. gross domestic product was put on the back burner following Yellen's statement. That report showed U.S. growth in the second quarter was slightly lower than previously thought, rising at a 1.1 percent annual rate. That was down slightly from the 1.2 percent rate reported last month.
GBP/USD is supported in the range of 1.3085 currently trading at 1.3133 levels. It reached session high at 1.3280 and hit low at 1.3120 levels. British pound declined sharply against the dollar on Friday as investors struggled to decipher the timing of a U.S. interest rate increase following comments by Federal Reserve Chair Janet Yellen and other officials. In her much-awaited speech, Yellen said the case for raising U.S. interest rates has strengthened, although increases should be gradual. Yellen pointed to improvements in the U.S. labor market and expectations for moderate economic growth, reinforcing the view that such a move could come later this year. She did not, however, lay out a clear roadmap for what the Fed needs to see to raise rates. The pound jumped to a three-week high of $1.3280 after Yellen's speech was released, but reversed course to hit 5 day low at 1.3119.
USD/CAD is supported at 1.2829 levels and is trading at 1.3004 levels. It has made session high at 1.3010 and lows at 1.2829 levels. The Canadian dollar weakened against its U.S. counterpart on Friday as chances of a U.S. interest rate hike this year rose after comments from Federal Reserve officials, including Fed Chair Janet Yellen. Speaking in Jackson Hole, Wyoming, Yellen said the case for raising U.S. interest rates has strengthened in recent months. Fed Vice Chair Stanley Fischer later reinforced that message. Oil prices rose, but some gains were pared as traders reacted to comments from Fed officials and reports of missile activity in Saudi Arabia. U.S. crude oil futures CLc1settled 31 cents higher at $47.64 a barrel. The Canadian dollar was last trading at C$1.3004 to the greenback, or 76.92 U.S. cents, weaker than Thursday's close of C$1.2926, or 77.36 U.S.
AUD/USD is supported around 0.7550 levels and currently trading at 0.7561 levels. It hit session high at 0.7691 and made session lows at 0.7550 levels. The Australian dollar slumped against the greenback on Friday as investors grappled with the possible timing of an interest rate hike after comments from several Federal Reserve officials, including Chair Janet Yellen. In her much-awaited speech, Yellen said the case for raising U.S. interest rates has strengthened, although increases should be gradual. The Australian dollar initially rose 0.18 percent to $0.7690. But declined sharply as traders viewed the comments from Federal Reserve Chair Janet Yellen's as hawkish. The antipodean currency was resilient this week in the face of domestic interest rate cuts this year due to carry trades, where investors borrow at low rates in yen, pounds or euros to buy higher-yielding assets such as the Aussie dollar.
Equities Recap
The broad-based major European markets closed higher in Friday's trading session, as rising mining stocks and automakers helped push the indices into positive territory.
UK's benchmark FTSE 100 closed up 1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.6 percent, Germany's DAX ended up by 0.6 percent, France’s CAC finished the day up by 0.9 percent.
U.S. stocks ended modestly lower after a volatile session on Friday, having bounced between gains and losses as investors wrestled with the likely timing of a U.S. interest rate hike following comments from top Federal Reserve officials.
Dow Jones closed up by 0.28 percent, S&P 500 ended down by 0.14 percent, Nasdaq finished the day up by 0.14 percent.
Treasuries Recap
U.S. Treasury yields rose to more than one-month highs on Friday as investors considered whether the Federal Reserve is likely to raise interest rates at its September meeting, after hawkish but noncommittal comments by Fed Chair Janet Yellen.
Benchmark 10-year notes were down 16/32 in price to yield 1.63 percent, the highest since June 24, and up from 1.56 percent before the comments.
Yields initially rose to 1.60 percent on Yellen’s more hawkish tone, before moving in the opposite direction and dropping as low as 1.53 percent.
Commodities Recap
Gold pared gains on Friday, while the dollar turned up and U.S. stocks fell, as investors struggled to decipher the timing of a U.S. interest rate increase following comments by Federal Reserve Chair Janet Yellen and other officials.
Spot gold was up 0.02 percent at $1,321.52 an ounce by 3:00 p.m. EDT (1900 GMT). It was on track to finish the week down 1.5 percent after two straight weeks higher.
U.S. gold futures for December delivery settled up 0.1 percent at $1,325.90.
Oil prices were largely unchanged on Friday in a volatile session, as traders reacted to comments from Fed Chair Janet Yellen and reports of missile activity in Saudi Arabia.
At one point, crude benchmarks were up as much as 2 percent before drifting lower.
Brent crude futures settled at $49.92, up 25 cents or 0.5 percent. U.S. crude ended the session 31 cents higher at $47.64.
