- US August prelim UMich consumer sentiment 67.8 vs 66.9 expected
- US July housing starts 1.238M vs 1.330M expected
- China issues new gold import quotas after pause -- report
- Fed's Goolsbee: There are some things that are flashing yellow
- July Canada housing starts 279.5K vs 245.0K
- Canada June manufacturing sales -2.1% vs -2.6% expected
- Baker Hughes US oil rig count -2
- Israeli intel believes Iran response will take place at later date -- report
- Biden says Gaza ceasefire deal 'is closer than three days ago'
- Blinken to visit Middle East starting on Sunday
- Join me on Monday for a webinar on how to dodge 7 common trading traps
Markets:
- Gold up $51 to $2507
- WTI crude oil down $1.46 to $76.70
- US 10-year yields down 4.3 bps to 3.88%
- S&P 500 up 0.2%
- JPY leads, USD lags
The US dollar was broadly weak on Friday in a move that was challenging to explain. The entire USD/JPY rally from Thursday and the positive retail sales data was wiped out while other pairs continued to climb. The later was backed by a decent risk tone and modest decline in Treasury yields but it was an outsized move that was tough to pin down.
One spot I look at is ongoing de-risking. Some of those caught up in the August rout or carry trade unwind may still be looking to de-risk.
The moves were large with the euro closing above 1.10 for the first time since January and cable adding nearly a full cent in a breakout from the weekly range. The Australian dollar rode and improving risk trade to the best levels since July 22 as that rout continues to be erased across asset classes.
The big winner on the day though was gold as it hit an all-time high and broke $2500 for the first time. On the initial touch of $2500, there was some profit taking and a quick $20 drop but the bulls reorganized and bid right through the close. The catalyst was likely a report that Chinese banks have been given fresh buying quotas, along with the widespread USD weakness.
Overall though, it was a day that left us scratching our heads and early next week is likely to do the same with a very quiet economic calendar until Jackson Hole kicks off on Thursday.
Have a great weekend.
