- Spanish banks need 59.3B in stress test, near expectations
- US personal spending +0.5%, as expected
- US core PCE +1.6% y/y, as expected
- Canada July GDP +0.2% m/m vs +0.1% exp
- Chicago PMI 49.7 vs 52.8 exp, lowest in 3 years
- U Mich final consumer sentiment 78.3 vs 79.2 prelim
- Fitch: UK AAA-rating at risk
- ECB’s Asmussen: Europe has a decade of adjustment ahead
- Rumors Spain to ask for ESM aid
- Oil output at lowest since Jan
- S&P 500 gains 0.5%, -1.3% on week, +2.4% on month
- USD leads, AUD lags on day
- Quarterly FX leaderboard
EUR/USD was relatively stable through the first round of US data but freaked out after the Chicago PMI, taking out 1.2900 support and tumbling all the way down to Thursday’s 1.2830 low (200dma at 1.2825). After European stocks closed (with a whimper) EUR bounced to 1.2845.
Cable closes out the week near the lows. In Europe, it initially bounced at 1.6175 but later ran through stops below. The weekly low at 1.6138 initially held but not for long and the pair plunged to 1.6114 before a late bounce to 1.6144. Big outside day on the daily chart.
The real story, and perhaps the underlying source of the USD strength, was USD/JPY. This pair moved relentlessly higher up to 78.02 from 77.45. Month/quarter end flows a likely culprit.
AUD/USD hit 1.0474 overnight but closes 100 pips lower. Lots of calendar risks on Monday.
Gold $1772, WTI crude $92.09.