US-China trade developments have dominated market moves with volatile conditions.
US-China trade developments have dominated market moves with volatile conditions. Talks on Thursday failed to secure a breakthrough and the US increase in tariffs on Chinese exports to 25% from 10% went ahead on Friday.
Equity markets registered net losses, although there was a recovery from intra-day lows with talks set to continue Friday.
The yen maintained a strong tone as defensive support continued with USD/JPY dipping to 3-month lows.
The US dollar overall lost ground amid concerns that there could be damage to the US economy and EUR/USD moved above 1.1200.
Oil prices were protected by underlying supply concerns as Iran tensions increased further.
The Norwegian krone lost ground despite a hawkish Norges Bank statement and higher than inflation data as trade fears damaged Scandinavian sentiment.
Gold was able to secure only limited support despite fragile risk conditions.
Bank of England member Saunders stated that the neutral interest rate for interest rates was likely to be around 2.0% and expected rates to rise over time, but increases wouldn’t be far or fast with the rhetoric in line with recent MPC commentary.
Sterling was hampered by comments from Labour leader Corbyn that the government had made no big offer on Brexit talks. The overall risk-averse tone also hampered the UK currency with markets fretting over the global trade and growth outlook. GBP/USD declined to 1.2970 before regaining the 1.3000 level as the dollar dipped while GBP/EUR dipped close to 1.1600.
The UK currency was unable to make headway on Friday as risk appetite dipped once again. Domestic data will gain at least temporary attention in Europe with the latest GDP and industrial production data, although risk conditions are likely to dominate during the day with GBP/USD trading around 1.3000 at the open as choppy trading persisted.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 07:45 | Industrial Output MM(MAR) | -0.50% | 0.40% |
| 07:45 | Non-Farm Payrolls QQ | - | 0.20% |
| 09:00 | Industrial Output MM SA(MAR) | -0.80% | 0.80% |
| 09:00 | Industrial Output YY WDA(MAR) | -0.90% | 0.90% |
| 09:30 | GBP Total Business Investment (Q/Q) | - | -0.90% |
| 09:30 | United Kingdom GDP (Q/Q) | 0.20% | 0.20% |
| 09:30 | United Kingdom GDP (Y/Y) | 1.40% | 1.40% |
| 09:30 | GBP Industrial Production (Y/Y)(MAR) | -0.90% | 0.10% |
| 09:30 | GBP Industrial Production (M/M)(MAR) | 0.10% | 0.60% |
| 09:30 | GBP Manufacturing Production (Y/Y)(MAR) | -0.70% | 0.60% |
| 09:30 | GBP Manufacturing Production (M/M)(MAR) | 0.20% | 0.90% |
| 09:30 | GBP Trade Balance(MAR) | -12.70B | -14.11B |
| 09:30 | GBP Trade Balance Non EU(MAR) | -4.50B | -5.84B |
| 13:30 | USD CPI (Y/Y)(APR) | 2.10% | 1.90% |
| 13:30 | USD CPI Ex Food & Energy (Y/Y)(APR) | 2.10% | 2.00% |
| 13:30 | USD CPI Ex Food & Energy (M/M)(APR) | 0.20% | 0.10% |
| 13:30 | USD CPI (M/M)(APR) | 0.40% | 0.40% |
| 13:30 | CAD Building Permits (M/M)(MAR) | - | -5.70% |
| 13:30 | CAD Unemployment Rate (M/M)(APR) | 5.80% | 5.80% |
| 13:30 | CAD Full Employment Change(APR) | - | -6.4K |
| 13:30 | CAD Employment Change (M/M)(APR) | 1.0K | -7.2K |
| 13:30 | FOMC Brainard Speaks | - | - |
| 14:05 | FOMC Member Raphael Bostic speech | - | - |
| 15:00 | FOMC member John C. Williams speech | - | - |
| 15:30 | ECB Benoit Coeure Speaks | - | - |
| 18:00 | USD Baker Hughes US Oil Count | - | 807 |
| 19:00 | Monthly Budget Statement(APR) | -154.0B | -147.0B |