Market Roundup
• US Feb durable goods 1.7% V 1.2% forecast, 2.3% previous, core -0.1% v 0.6% forecast, 0.1% previous.
• US Markit Svcs PMI flash Mar 52.9 v 54.2 forecast, 53.8 previous, Mfg PMI flash 53.4 v 54.8 forecast, 54.2 previous.
• US building permits -6.0% vs -6.2% previous.
• Fed’s Dudley: Delicate hikes needed to avoid US inflation jump; may have inflation problem if you push unemployment lower; the economy can absorb current rate-hike path.
• Fed’s Bullard (non-voter): No need for aggressive rate hikes, Fed should be allowing balance sheet to shrink now.
• Fed’s Williams: Once Fed begins shrinking balance sheet could push neutral real rate down further.
• Atlanta Fed’s GDPNow: Q1 GDP growth forecast 1% up from 0.9% on Mar 16.
• NY Fed’s Nowcast: US Q1 growth seen 2.96% v 2.83% Mar 17; Q2 2.66% v 2.53% on Mar 17.
• Eurozone economy sparkles, lights way for ECB pull-back, March flash composite PMIs all beat expectations; March flash composite PMIs all beat expectations.
• Splintering Euro Zone debt market down to Draghi, not politics; Euro zone's "weakest links" seen most vulnerable.
• Republicans pull bill to dismantle Obamacare.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• 23:50 Japan BOJ Summary of Opinions at March 15-16 Meeting
Currency Summaries
EUR/USD is likely to find support at 1.0753 levels and currently trading at 1.0797 levels. The pair has made session high at 1.0815 and hit lows at 1.0788 levels. The euro declined against the U.S. dollar on late Friday afternoon trading after the Republican bill to dismantle Obamacare was pulled by U.S. House Republican leadership. Republican leaders of the U.S. House of Representatives pulled legislation to overhaul the U.S. healthcare system from consideration on Friday due to a shortage of votes despite desperate lobbying by the White House and its allies in Congress, dealing a stiff setback to President Donald Trump. Investors have been split on whether a defeat for the bill would knock the dollar and stock markets because it would suggest Trump's inability to get reforms through Congress, or whether it would boost them, as he would then be able to move straight onto tax reforms. The U.S. dollar index, which measures the greenback against a basket of six major rivals, hit a seven-week low of 99.527 before the healthcare decision but pared losses after the announcement and was last marginally higher at 99.765.
GBP/USD is supported in the range of 1.2433 levels and currently trading at 1.2473 levels. It reached session high at 1.2500 and dropped to session low at 1.2467 levels. Sterling fell against the dollar on Friday, retreating from the previous session's one-month highs, as investors braced for Britain's beginning the formal process of leaving the European Union next week. Strong inflation and retail sales data have added to expectations the Bank of England might lean towards supporting sterling with higher interest rates over the next year, pushing the pound 1 percent higher against the dollar this week. But investors worry that Prime Minister Theresa May's invoking Article 50 next Wednesday may trigger a period of political jousting with its EU partners that will lay bare the scale of the risks to the economy from 18 months of talks. Sterling initially hit high at $1.2508 in early US session, before retreating slightly to trade at $1.2473 and was 0.4 percent lower on the day.
USD/CAD is supported at 1.3300 levels and is trading at 1.3379 levels. It has made session high at 1.3385 and lows at 1.3360 levels. The Canadian dollar declined against its U.S. counterpart on Friday as tame domestic inflation data dampened pressure on the Bank of Canada to turn more hawkish, offsetting the impact of higher oil prices. As recently as January, Bank of Canada Governor Stephen Poloz said an interest rate cut remained on the table. The central bank last cut in July 2015 to leave its policy rate at 0.50 percent. Canada’s annual inflation rate dipped to 2.0 percent in February from 2.1 percent in January, Statistics Canada said. Analysts had expected the inflation rate to remain at 2.1 percent. Oil prices edged higher but remained on track for weekly losses of about 2 percent as concerns persisted over an excess of crude. Oil has been on the back foot for more than two weeks now, after a string of U.S. inventory reports suggested that output cuts by the Organization of the Petroleum Exporting Countries were not having the desired effect in reducing global oversupply. The Canadian dollar was trading at C$1.3379 to the greenback, or 74.77 U.S. cents, weaker than Thursday's close of C$1.3351, or 74.90 U.S. cents.
AUD/USD is supported around 0.7582 levels and currently trading at 0.7624 levels. It hit session high at 0.7629 and made session lows at 0.7613 levels. The Australian dollars slightly inched higher against the greenback on Friday as investors fretted about the outlook for U.S. fiscal stimulus as President Donald Trump struggled to get his healthcare bill passed. Republican leaders of the House of Representatives pulled legislation to overhaul the U.S. healthcare system from consideration on Friday due to a shortage of votes, despite desperate lobbying by the White House and its allies in Congress, dealing a stiff setback to President Donald Trump. The Australian dollar declined to daily lows at $0.7601, but recovered slightly to trade at 0.7622 in the late US session. It was down 0.7 percent for the week, the most since Dec. 23.The Aussie has taken a hit in recent days as traders unwound carry trade on concerns a failure on the healthcare bill could jeopardise Trump's other fiscal measures. A drop in the price of iron ore, Australia's top export earner also weighed on the currency. The September iron ore contract on the Dalian Commodity Exchange has fallen almost 9 percent this week.
Equities Recap
European shares fell slightly on Friday, with eyes on a vote on U.S. President Donald Trump's healthcare bill, while technology companies outperformed.
The UK's benchmark FTSE 100 closed down by 0.1 percent, FTSEurofirst 300 ended the day down by 0.19 percent, Germany's Dax ended up by 0.2 percent, and France’s CAC finished the day down by 0.2 percent.
A dramatic session on Wall Street ended with stocks slightly lower on Friday as they pared losses in late-afternoon trading after Republicans pulled their bill to overhaul the U.S. healthcare system.
Dow Jones closed down by 0.27 percent, S&P 500 ended down by 0.07 percent, Nasdaq finished the day up by 0.21 percent.
Treasuries Recap
U.S. Treasury prices gained on Friday after Republicans pulled their bill to overhaul the U.S. healthcare system due to a shortage of votes, dealing a blow to U.S. President Donald Trump.
Benchmark 10-year notes gained 4/32 in price to yield 2.40 percent, down from 2.42 percent on Thursday.
The 10-year yields fell to 2.375 percent on Wednesday, their lowest since Feb. 28. They are down from a three-month high of 2.63 percent on March 14.
Commodities Recap
Gold rose on Friday, notching its second straight week of gains, making bullion cheaper for holders of other currencies.
Spot gold was up 0.2 at $1,247.66 an ounce by 2:10 p.m. EDT (1810 GMT). The metal has risen 1.6 percent this week and on Thursday touched $1,253.12, its highest since Feb. 28. It rose nearly 2 percent a week earlier. U.S. gold futures settled at $1,248.50 an ounce.
Oil rose modestly on Friday in a spate of late-day activity, but fell on the week as concerns persisted over an excess of crude.
U.S. West Texas Intermediate (WTI) crude futures settled up 27 cents to $47.97 a barrel but lost 0.5 percent on the week. About 390,000 WTI contracts had changed hands, lower than the average of about 520,000 over the last 200 days.Brent crude ended up 24 cents to $50.80, and ended down 1.8 percent this week.
