Stocks notch new record on Fed hopes and weak economic data

Daily August Comex Gold

Daily August Comex Gold

Markets' attention has been focused squarely on economic prints out of the USA economy of late, and as we discussed two weeks ago, this has done Dollar bulls very few favors as data continues to print below expectations. Retail sales dropped 0.2 percent last month. It's not usually a market mover but with so much attention on inflation at the moment, this report could be an exception.

The Philippine peso somewhat recovered 0.1 percent to 50.610 after earlier fall of 0.3 percent while Indian rupee was steady at 64.4580. The Russell 2000 index of smaller-company stocks inched up 0.1 percent to 1,425.66.

US two-year yields slid as well, down at 1.343 percent, from 1.355 percent before the data's release.

The dollar was little changed against a group of peers early on Friday, as currency investors remained cautious ahead of USA inflation data due later in the session, which is expected to set the greenback´s near-term direction.

The euro gained 0.64 per cent to US$1.468 (RM6.28). Even excluding for auto sales, which have declined recently, retail sales figures still posted a 0.2% drop. As has become the norm of recent, a relatively hawkish Federal Reserve was unable to inspire any lasting strength in the currency while USA data continued to disappoint.

European shares had their strongest week in more than two months as investors piled back into equities on signs that the world's major central banks would likely not tighten monetary policy as quickly as some had feared.

King Felipe VI: Spain and United Kingdom 'profoundly intertwined'
King Felipe, accompanied by Prince Philip , inspected the Guard of Honor (in this case, the 1st Battalion Irish Guards). With a population of around 30,000, Gibraltar was ceded to Britain by Spain under the treaty of Utrecht in 1713.

With inflation still shy of the Fed's 2% target and retail spending dipping too, economists are now not quite so sure the Fed will raise rates in line with its prediction in the second half of the year. Investors saw the remarks as a signal that the Fed, which has raised interest rates three times since December, might slow the pace of future interest rate increases. The Dow rose 0.1 percent to 21,553.09. The two-year note fell to 1.347% from 1.363% at yesterday's close, and the 30-year fell to 2.892%. Retail sales rose 2.8 per cent year-on-year in June.

The yield gap between shorter-dated and longer-dated Treasuries shrank on Friday after the data, with the spread between 2-year and 10-year yields at 95.7 basis points, its flattest level in more than a week. During her congressional testimony this week, Fed Chairwoman Janet Yellen repeated her belief that temporary factors were keeping a lid on consumer prices, but said she would watch them "very closely". The contract gained 59 cents, or 1.3 percent, to settle at $46.08 per barrel on Thursday. It was poised for a weekly gain of 1.3 percent, the biggest since mid-May.

Brent crude futures, the global benchmark for oil, settled up 49 cents at US$48.91 per barrel.

US crude futures traded at $45.81 per barrel, up 1.7 per cent so far on Tuesday, extending their recovery from Monday's near two-week low of $43.65.

Drugmaker AstraZeneca AZN.L continued Thursday's slide, down 1.6 percent due to uncertainty around reports that CEO Pascal Soriot was preparing to leave the company.

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