Investing.com - Here are the top five things you need to know in financial markets on Friday, July 28:
1. Dollar continues to hover near 13-month lows on Fed statement
The U.S. dollar was still trading near 13-month lows against a basket of the other major currencies after the Federal Reserve's more cautious tone on the U.S. inflation outlook on Wednesday sparked fresh uncertainty over the possibility of a third rate hike this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.21% at 93.57, just off Thursday’s 13-month low of 93.00.
The Fed also said it expected to start shrinking its balance sheet "relatively soon", prompting expectations for an announcement in September.
Traders will eye data from the U.S. to gauge the strength of the world's largest economy and how it will impact the Fed's view on monetary policy.
Advance second-quarter GDP data is due at 8:30AM ET (1230GMT), while the University of Michigan is set to release a revised report on consumer sentiment and inflation expectations at 10.00AM ET (1400GMT)
2. Republicans fail to repeal Obamacare
Senate Republicans failed to pass their Obamacare repeal bill in a dramatic vote of 49-51 late Thursday night.
At least three Republicans, including Sen. John McCain, voted against the bill which needed a simple majority to pass in the Senate. President Donald Trump reacted to the vote by saying the three had "let the American people down".
3. Markets brace for fresh batch of corporate earnings
Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Merck & Company Inc (NYSE:MRK), AbbVie Inc (NYSE:ABBV), LyondellBasell Industries NV (NYSE:LYB), American Airlines Group (NASDAQ:AAL) and Ventas Inc (NYSE:VTR) are among the big names reporting before the opening bell.
4. Europe’s biggest lenders report results
The financial sector was at the forefront on Friday as a number of major European lenders reported their latest earnings.
BNP Paribas SA (PA:BNPP) reported better-than-expected second-quarter earnings, saying that a diversified banking model helped it to weather the recent trading activity downturn more successfully than other large lenders.
Banco Santander (MC:SAN) said on Friday that net profit and net interest income rose in line expectations. In addition, CEO Ana Botín said that executives are "extremely confident that the acquisition of Popular will deliver a return on investment of 13%-14% by 2019."
In Switzerland, UBS Group AG (SIX:UBSG) also posted better-than-expected second-quarter profits on Friday.
On a less positive note, Barclays PLC (LON:BARC) reported a loss of £1.2 billion in the first half of the year, weighed down by its withdrawal from Africa and the ongoing payment protection insurance scandal.
5. Gold takes a breather after rally to 6-week highs
Comex gold futures were steady at $1,259.97 a troy ounce on Friday, as investors locked in profits a day after the precious metal reached its highest level since June 15 at $1,265.00. Gold prices strengthened as the Federal Reserve’s most recent policy statement fueled concerns over future rate hikes.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, silver futures were also little changed at $16.56, after hitting five-week high of $16.81 a troy ounce on Thursday.
Meanwhile, copper futures stayed near their highest level in more than two years amid talk China may ban imports of some scrap metal from the end of 2018.