Market Roundup
• Bullard says Fed's goals (employment & inflation) largely met, rates should edge up.
• Oil slips from 2016 highs as U.S. rig count rises, U.S. oil rig count up by 1, first rise in 13 weeks.
• Canadian Jan retail sales rebound (+2.1% m/m), lifting Q1 growth outlook.
• U Mich Consumer Confidence index at lowest since matching 90.0 in Oct, 1-yr inflation outlook 2.7%vs 2.5% Feb.
• Banxico holds rates steady after peso rally, remains vigilant on inflation, sees growth sluggish.
• Brazil’s Barbosa: possible to to resume econ growth later this year.
• Brazil's Rousseff says wiretap of Lula call illegal, vows action.
• Brazil attorney general says legal obstacles to Lula removed.
Looking Ahead – Economic Data (GMT)
• No Significant Data
Looking Ahead – Events, Other Releases (GMT)
• 04:15 Japan/Australia- Masatsugu Asakawa, Japan's vice minister for int’l affairs in ministry of finance, speaks on “Abenomics and the Japanese Economy” at the Australia, Japan and International Economic Outlook Seminar.
Currency Summaries
EUR/USD is likely to find support at 1.1220 levels and currently trading at 1.1275 levels. The pair has made session high at 1.1305 and hit lows at 1.1248 levels. The dollar firmed against euro on Friday, as traders exited from their short positions after two straight days of selling in the wake of the Federal Reserve's cautious view on global market developments. The U.S. central bank held interest rates steady on Wednesday and indicated it would tighten policy this year. Expectations the Fed would raise rates steadily this year had faded since the bank's initial hike in December, as concerns about global growth roiled financial markets. The dollar index, which measures the greenback against six major currencies, was up 0.15 percent in tight trading. The euro retreated from a five-week high of $1.1342 falling 0.2 percent to $1.1294.
GBP/USD is supported in the range of 1.4388 currently trading at 1.4470 levels. It reached session high at 1.4511 and hit low at 1.4467 levels. The sterling eased against US dollar on Friday after the dollar steadied above a five-month low. Minutes of the Monetary Policy Committee's meeting on Thursday, showed its members voted 9-0 to leave rates at their record low of 0.5 percent. The Bank of England, contrary to some bets on the margins in markets, did nothing after its meeting on Thursday to undermine the improvement in the pound's value since it fell to a 7-year low around $1.38 at the end of February. Investors worry that leaving the European Union would depress growth and threaten the huge foreign investment flows Britain needs to fund its current account deficit, one of the biggest in the developed world at about 4 percent of national output.
USD/CAD is supported at 1.2940 levels and is trading at 1.3016 levels. It has made session high at 1.3041 and lows at 1.2923 levels. The Canadian dollar rallied against the U.S. dollar on Friday touching levels not seen in nearly 4 months as crude oil prices pushed higher after an output freeze plan helped boost the market to 2016 highs and multi-week gains. The Canadian dollar also got a boost after data showed Canadian retail sales rebounded strongly in January, boosting the likelihood that growth in the first quarter will be better than anticipated giving the Bank of Canada room to stay on the sidelines. Statistics Canada's retail sales report, showed a 2.1 percent increase better than expected the forested figures at 0.6.The Canadian dollar added to gains against the greenback shortly after the reports. The currency's weakest level of the session was C$1.3039, while it touched its strongest at C$1.2923.
AUD/USD is supported around 0.7565 levels and currently trading at 0.7600 levels. It hit session high at 0.7632 and made session lows at 0.7594 levels. The Australian dollar retreated from eight-month high against dollar on Friday as the Aussie bulls stalled after oil prices took a short dip in the late American session on renewed worries of a supply glut. The Australian dollar eased to $0.7427, from $0.7506 early, but well within reach of $0.7528, a level last touched in July. Initially Australian dollar inched higher towards of $0.7636, before slipping towards $0.7594 in the late American session. It has gained an impressive 7.2 percent so far this month and looked set to test the June 2015 peak of $0.7849. It also stood tall against the pound, which slumped for the sixth consecutive week.
Equities Recap
European shares bounced back on Friday, with the European Central Bank's new cheap funding plan supporting lenders in the euro zone periphery and a recovery in metal and oil prices boosting stocks in commodity companies.
Britain's blue-chip FTSE 100 index closed down by 0.1 percent, France's benchmark CAC-40 index closed up by 0.5 percent, Germany's DAX ended up 0.7 percent, meanwhile the pan-European Eurofirst 300 index was up by 0.2 percent.
The S&P 500 closed positive for the year for the first time in 2016 on Friday, as the U.S. Federal Reserve's dovish tone and a strengthening economic outlook compelled investors to take on more risk.
Dow Jones closed up by 0.65 percent, S&P 500 ended up by 0.43 percent, Nasdaq finished the day up by 0.42 percent.
Treasuries Recap
U.S. Treasuries rallied for a fifth straight session on Friday, in line with gains in European sovereign markets, as investors continued to snap up U.S. government bonds with the expectation that the Federal Reserve will implement fewer rate increases this year.
The 30-year bond was last up 9/32 in price to yield 2.679 percent, from 2.689 percent late on Wednesday.
U.S. two-year notes were up 1/32 in price, with yields dipping to 0.839 percent from 0.875.
Commodities Recap
Gold edged lower on Friday, as the dollar steadied above a five-month low, but the metal remained on track for a weekly gain after the Federal Reserve scaled back rate increase expectations.
Spot gold was down 0.31 percent at $1,253.99 an ounce by 2:52 p.m. EST (1852 GMT), while U.S. gold futures settled 0.8 percent lower at $1,254.3 an ounce.
Crude prices settled lower on Friday after the U.S oil rig count rose for the first time since December, renewing worries of a supply glut after an output freeze plan helped boost the market to 2016 highs and multi-week gains.
Brent crude finished down 34 cents, or 0.8 percent, at $41.20 a barrel, having risen $1 earlier to a 2016 high of$42.54.
U.S. crude settled down 76 cents, or 1.9 percent, at $39.44, after also gaining $1 to a year high of $41.20.
The material has been provided by InstaForex Company – www.instaforex.com