U.S. stocks advanced last Friday while Treasuries fell after solid economic data bolstered confidence in the economy and the case for higher interest rates. Financial shares climbed after three of the largest American lenders reported results.
USD was down vs all G-10 peers late Friday, with losses of ~0.2% as measured by the Bloomberg dollar index, while UST yields were ~2bp-3bp higher across the curve, after U.S. retail sales exceeded bearish “whisper” estimates.
U.S. Dec. Retail Sales jump 0.6% vs Est. 0.7%; PPI for Final Demand 0.3% vs Est. 0.3%
Preliminary Jan. Michigan Sentiment printed 98.1 vs Est. 98.5
U.S. Nov. Business Inventories resulted 0.7% MoM vs Est. 0.6%
Stoxx Europe 600 Index rose 1% as banks rallied and autos and health-care rebounded
U.K. set to pull out of single market and customs union as part of Brexit, Sunday Times says Prime Minister Theresa May wants to regain control of immigration and end jurisdiction of the European Court of Justice, Sunday times says Downing Street expects a “market correction” and decline in pound. May will seek transitional deal, newspaper says
China Urges U.S. to Recognize ‘High Sensitivity’ of Taiwan Issue. Taiwan is an inalienable part of China, the government of the People’s Republic of China is the only legitimate government representing China, China’s Ministry of Foreign Affairs spokesman Lu Kang says in a statement after U.S. President-elect Donald Trump gave interview to the Wall Street Journal.
Trump Says Will Be Flexible in Relations With China, Russia. President-elect Donald Trump says relations with China and Russia will depend on the degree to which the two countries cooperate with U.S. economic, diplomatic and military priorities, WSJ reports, citing an interview with Trump.
AUD has been pulled down ever so slightly this morning on the GBP news, but really only 20 points or so to drop from above 75c to 7480’s.
GBP/USD Slides More Than 1% after Sunday Times Say May to Seek Hard Brexit. Pound falls as much as 1.2% to $1.2036, weakest since Oct. 7, according to data compiled by Bloomberg.
The benchmark 10-year Treasury yield climbed three basis points to 2.390 percent, after touching the lowest level since Nov. 30 on Thursday.
Bond futures were underpinned early by ECB QE before tracking USTs down after U.S. retail sales data
Bonds were mixed in Europe. Greek bonds led losses, with the yield on 10-year notes climbing four basis points to 6.8 percent. The Portuguese 10-year yield retreated 1 basis points to 3.86.
The S&P 500 rose 0.2 percent to 2,274.58 at 4 p.m. in New York, 0.1 percent below its Jan. 6 closing record after the index slipped by that much in the week.
The Nasdaq Composite added 0.5 percent, pushing its advance in 2017 to 3.6 percent as it’s risen every day but one so far this year. The Dow Jones Industrial Average slipped to finish below 19,900.
The Stoxx Europe 600 Index climbed 1 percent, rebounding from a 0.7 percent drop on Thursday. It advanced 0.1 percent in the week.
Oil posted its first weekly slide in more than a month as traders await proof that OPEC producers have cut production.
West Texas Intermediate crude futures slipped 1 percent to $52.49 a barrel in New York.
Gold futures dropped 0.2 percent to $1,197.70 an ounce, paring a third weekly gain.
Copper futures rose 0.7 percent to settle at $2.69 a pound in New York. The contract touched a five-week high during the session.