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The Euro failed to maintain gains on Friday as Italian politics outweighed the ECB supersized rate hike. The bank raised rates by 50bps against 25bps surveyed surprising the market as it joins the global central bank’s hiking cycles. UK’s retail sales were mixed while the French and Germany PMI data missed expectations. Investors shift focus to the US Manufacturing PMI and Canadian retail sales.
GBPCAD has fallen by -0.57% despite pleasant UK data. The data has beat expectations with the Composite PMI rising to 52.8 vs 52.5 expected, Manufacturing PMI rose to 52.2 against 52.0 expected and the Services PMI 53.3 vs 53.0 surveyed. Despite beating expectations, the data is less than the previous readings, therefore, underpinning the sterling. The CAD is stronger on higher retail sales expectations which are set at 1.6% from 1.3% for the Core Retail Sales {MoM} for May. The pair is capped by 1.5460 to the upside and a barrier at 1.5300 to the downside.
USDJPY is up +0.10% on a stronger dollar following downbeat JPY PMI data. The Japanese Services PMI fell to 51.2 vs 54.0 surveyed and Manufacturing PMI fell to 52.2 vs 52.7 expected. That coupled with lower than previous CPI {YoY} at 2.4% VS 2.5% has underpinned the Yen. Focusing ahead the US PMI data will be released later in the day along with the US Baker Hughes Oil Rig Count. Further gains are capped by 138.00 and an intraday low resides at 137.00.
European equities edged higher Friday morning despite a more than expected interest rate hike by the ECB on Thursday along with disappointing PMI data in the Euro area. The central bank hiked its key rates by 50bps from an expected 25bps. The German Manufacturing PMI for July fell to 49.2 vs expectations of 50.6. The eurozone`s Services PMI fell to 50.6 from expectations of 52.0.
The FTSE 100 gained +0.19% and upside movement is capped by 7370, a 5-week high. A break above that level may set targets at 7500. CAC 40 is up +0.30% from 6160 low and critical areas to watch out for are 6300 and 6400 levels. DAX soared by +0.45% and if the current 13450 resistance fails to hold bulls may target 13 680 and 14000.
US stock futures have slight losses amid the strengthening dollar. The S&P500 futures are down -0.06% below the 4000 psychological mark and a break above could reinforce targets at 4075 previous support turned resistance. DJIA index futures are flat at -0.01% with support at 31950 and upside targets still remain at 32510 and 33500 in the near term. Nasdaq100 futures have modest gains of +0.15% following a release of more than expected earnings by tech giants. The Nasdaq may face an upside barrier at 12950, a 10- week high.
Gold prices soared higher on Friday ahead of US PMI data in the New York session. The yellow metal is benefiting from a bearish US 10-YEAR Yield down -1.90%. This along with a surprise 50bps rate hike by the ECB has allowed the precious metal to end the week in positive territory. Currently, gold prices are capped by $1725 a 5-day high and a break above that level could renew bullish interests toward $1800.
