The dollar gained ground on Friday as solid data on U.S. retail sales and producer prices bolstered expectations that the Federal Reserve could raise interest rates in the coming months.
U.S. retail sales rose 0.6% in September after declining 0.2% the previous month, data from the Commerce Department showed Friday. Another report showing that U.S. producer prices picked up broadly last month added to the view that the economy is on a strong enough footing for a rate hike by the Fed before the year’s end.
In the week ahead, investors will be focusing on the European Central Bank’s post policy meeting press conference on Thursday, amid speculation over whether it will further expand its stimulus program in the face of sluggish growth and inflation. Market watchers will also be looking to Chinese figures on third quarter GDP, due for release on Wednesday, with the rate of growth expected to ease again.
Today the euro zone is to publish revised data on inflation, the U.S. is to release reports on industrial production and manufacturing activity in the New York region, ECB President Mario Draghi is to speak at an event in Frankfurt, while Fed Vice-Chair Stanley Fischer is to speak in New York.
USD/JPYThe yen weakened on Monday in Asia after remarks from the central bank governor updating on economic growth and inflation.
Bank of Japan Governor Haruhiko Kuroda said the economy is on a likely moderate expanding trend with core consumer prices slightly negative to flat, adding that the central bank will take further action to boost growth if needed.
This week will see the European Central Bank’s post policy meeting press conference on Thursday, amid speculation over whether it will further expand its stimulus program in the face of sluggish growth and inflation. Also on the watchlist are Chinese figures on third quarter GDP, due for release on Wednesday, with the rate of growth expected to ease again.
Pivot: 103.75Support: 103.75 103.3 103.15Resistance: 104.65 105 105.5Scenario 1: long positions above 103.75 with targets at 104.65 & 105.00 in extension.Scenario 2: below 103.75 look for further downside with 103.30 & 103.15 as targets.Comment: a support base at 103.75 has formed and has allowed for a temporary stabilisation.
Gold prices fell on Friday as a stronger dollar and heightened expectations for a U.S. rate hike later this year weighed on the precious metal.
Investors currently price a 64% chance of a rate hike at the Fed's December meeting, according to federal funds futures tracked by the Fed Rate Monitor Tool.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Today metal traders will focus on U.S. reports on industrial production and manufacturing activity in the New York region, to gain more information on the strength of the greenback.
Pivot: 1262.5Support: 1245 1241 1235Resistance: 1262.5 1269 1277Scenario 1: short positions below 1262.50 with targets at 1245.00 & 1241.00 in extension.Scenario 2: above 1262.50 look for further upside with 1269.00 & 1277.00 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Oil futures slipped on Friday, but still scored their fourth weekly gain in a row, as market players awaited details of a planned output cut by the Organization of the Petroleum Exporting Countries. The 14-member oil group said it won’t finalize details or complete its production agreement until the group’s next official meeting in Vienna on November 30.
Market players continued to focus on U.S. drilling prospects, amid indications of an ongoing recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 4 to 432, marking the 15th increase in 16 weeks.
In the week ahead, oil traders will focus on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals, but they will also continue to monitor supply disruptions across the world, for further indications on the rebalancing of the market.
Pivot: 51.1Support: 49.6 49.35 49.1Resistance: 51.1 51.6 51.86Scenario 1: short positions below 51.10 with targets at 49.60 & 49.35 in extension.Scenario 2: above 51.10 look for further upside with 51.60 & 51.86 as targets.Comment: the RSI is below its neutrality area at 50%.
U.S. stocks ended little changed on Friday, losing ground late after Federal Reserve Chair Janet Yellen's comments on the economy unnerved investors.
Financial shares finished up, giving the S&P 500 its biggest boost after stronger-than-expected bank results, but gave up most of their early gains. Healthcare shares led declines.
Yellen, in a speech at a conference of policymakers and academics, laid out the deepening concern at the Fed that U.S. economic potential is slipping - and may need aggressive steps to rebuild it.
For the day, the Dow Jones industrial average closed up 0.22%, the S&P 500 gained 0.02% and the Nasdaq Composite added 0.02%.
Today investors will focus on U.S. reports on industrial production and manufacturing activity in the New York region, to gain more information on the strength of the American economy.
Pivot: 2107 Support: 2107 2100 2093 Resistance: 2141 2152 2156 Scenario 1: long positions above 2107.00 with targets at 2141.00 & 2152.00 in extension. Scenario 2: below 2107.00 look for further downside with 2100.00 & 2093.00 as targets. Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.