America’s Roundup: Dollar dips as rate hike bets fade, Wall Street dips, Gold trims gains, Oil hovers below recent highs, ends week up-October 23rd,2021

Posted at 23 October 2021 / Categories Market Roundups

Market Roundup

•Canada Aug Core Retail Sales (MoM) 2.8%, 2.8% forecast, -1.0% previous

•Canada Aug Retail Sales (MoM)  2.1%,2.0% forecast, -0.6% previous

•US Oct Markit Composite PMI 57.3, 55.0 previous

•US Oct Manufacturing PMI  59.2, 60.3 forecast, 60.7 previous

•US Oct Services PMI  58.2 ,55.1 forecast, 54.9 previous

•U.S. Baker Hughes Total Rig Count 542,543 previous

•U.S. U.S. Baker Hughes Oil Rig Count 443, 445 previous

Looking Ahead Economic Data (GMT)

•No data ahead

Looking Ahead - Events, Other Releases (GMT)

•No significant events

Currency Summaries

EUR/USD: The euro strengthened on Friday as news that heavily indebted property firm China Evergrande Group had averted a default buoyed appetite for risky assets. With markets nearly discounting the prospects of a first U.S. rate hike by next July in recent days, the dollar has become more sensitive to risk sentiment. The dollar index   fell 0.17% to 93.57, and is down from a one-year high of 94.56 last week. The euro   gained 0.18% to $1.1642. Immediate resistance can be seen at 1.1658 (38.2%fib), an upside break can trigger rise towards 1.1708(50%fib).On the downside, immediate support is seen at 1.1592 (23.6%fib), a break below could take the pair towards 1.1500(Psychological level).

GBP/USD: The British pound dipped slightly on Friday after weaker-than-expected retail sales numbers but remained close to recent highs after recent survey data and policymaker comments underlined the threat of further inflationary pressure. British sales volumes dropped by 0.2% in September, official figures showed on Friday, bucking economists’ expectations in a   poll for a monthly rise of 0.5%.That miss coincided with more signs of rising inflation. Immediate resistance can be seen at 1.3803(23.6%fib),an upside break can trigger rise towards 1.3856(Higher BB).On the downside, immediate support is seen at 1.3726(38.2%fib), a break below could take the pair towards 1.3687(50%fib).

USD/CAD: The Canadian dollar barely moved against its U.S. counterpart on Friday, giving back some earlier gains as U.S. equity markets dipped and investors turned attention to a Bank of Canada interest rate announcement next week.The loonie was trading nearly unchanged at 1.2368 to the greenback, or 80.85 U.S. cents, after trading in a range of 1.2322 to 1.2390. The currency on Thursday touched its strongest level in nearly four months at 1.2287 but ended little changed for the week after some profit-taking. Immediate resistance can be seen at 1.2364 (38.2%fib), an upside break can trigger rise towards 1.2419(50%fib).On the downside, immediate support is seen at 1.2302(23.6% fib), a break below could take the pair towards 1.2256(Lower BB).

USD/JPY: The dollar dipped against yen on Friday as investors continued to unload long positions that benefited from an increase in bets that the Federal Reserve will raise rates sooner than previously expected. Full employment is among the Fed's stated requirements for rates lift-off. The safe-haven yen gained, though it remains the weakest performer, having dropped by almost 10% this year. The dollar was last down 0.50% against the Japanese currency   at 113.42 yen.  Strong resistance can be seen at 113.85 (38.2%fib), an upside break can trigger rise towards 114.39(23.6%fib).On the downside, immediate support is seen at 113.33(50%fib), a break below could take the pair towards 112.94(61.8%fib).

Equities Recap

European stocks rose on Friday on a surge in technology stocks, strong earnings from France’s L’Oreal and a broad boost to sentiment provided by a surprise interest payment from debt-ridden China Evergrande Group.

UK's benchmark FTSE 100 closed up  by  0.20 percent, Germany's Dax ended up by 0.46 percent, France’s CAC finished the day up  by 0.71 percent.                               

The S&P 500 and Nasdaq were in the red on Friday after Federal Reserve Chair Jerome Powell discussed stimulus tapering while disappointing quarterly reports from Snap Inc and Intel Corp pushed the communications and technology sectors lower.

Dow Jones closed up  by  0.21% percent, S&P 500 closed down by 0.11% percent, Nasdaq settled down by 0.82%  percent.

Treasuries Recap

Yields on longer-dated U.S. Treasuries slid on Friday after the benchmark 10-year note breached 1.7% overnight, while key market gauges of rising consumer prices kept pressing higher on concerns about inflation.

The yield on 10-year Treasury notes   was down 1.6 basis points to 1.659% after rising to a five-month high of 1.7064% late Thursday.

Commodities Recap

Gold prices more than halved their session gains on Friday after U.S. Federal Reserve Chair Jerome Powell said he expected inflation to ease next year and that the U.S. central bank was on track to begin winding down its stimulus.

Spot gold was up 0.6% at $1,793.82 per ounce by 1:41 p.m. ET (1741 GMT), after rising as much as 1.7% earlier in the session. Prices have risen 1.4% for the week.U.S. gold futures settled up 0.8% at $1,795.80 per ounce.

Oil traded just below multi-year highs on Friday with bullish sentiment about low supplies tamped by concerns from world leaders that demand disruptions from the COVID-19 pandemic may not be over.

Brent crude futures rose 92 cents, or 1.1%, to settle at $85.53 a barrel. The benchmark, which touched a three-year high of $86.10 on Thursday, was up 1% in the week, its seventh weekly gain.

U.S. West Texas Intermediate (WTI) crude futures gained $1.26, or 1.5%, to settle at $83.76 a barrel, not far off a seven-year high hit this week.

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