Dollar Pares Gains; CPI and Housing Starts In View

 
Snapshot: 

        -Dollar gives up gain; 10-year Treasury yield at 2.334%; Stock futures mixed; Nymex at $50.77, gold at $1143.90
        Watch for: New residential construction housing starts and building permits; CPI; real earnings; Fed Vice Chairman Stanley Fischer participates in U.S. Chamber of Commerce event; University of Michigan survey of consumers; earnings from General Electric, Honeywell
        News: IMF Urges Debt Restructuring in Greek Deal; Treasury's Lew Pressed Germany, France on Greek Debt; Obama, Saudi Foreign Minister to Meet Friday in Iran Deal's Shadow
        The dollar pared its gains against the yen in directionless Asia trade Friday after chalking up a three-week high, with investors finding it hard to move beyond a week-long rally that brought the greenback about 3% higher.
        But market participants pointed out a sense of overheating in the rally that inflated the value of the dollar from a low of Y120.41 Thursday last week.
        What caused the dollar's uptick was receding fears about the Greek debt crisis and the slump in Chinese stocks. Comments by Janet Yellen--who since late last week has reaffirmed the central bank's plan to start raising short-term rates later this year--also helped.
        Up ahead, a jump in housing starts is to be reported. The Commerce Department will weigh in on June building activity in a report due out on Friday. Economists expect residential starts bounced back 8.1% in June to an annual rate of 1.12 million, after starts plunged 11.1% in May.
        Up ahead markets will be focusing on the June CPI data where a near 4% rise in gasoline prices is expected to nudge headline inflation up to +0.1% year-on-year from the flat reading seen in May.
        The euro was steady against the dollar at $1.088 early Friday.
        The British pound hit a fresh seven-year high against the euro after Bank of England Governor Mark Carney on Thursday suggested a rate hike may come sooner than markets expect. Higher interest rates generally make a currency more attractive.
        Treasury yields fell in Asia Friday with the 10-yr UST touching a 1-week low of 2.334% at 0545 ET, according to data supplied by CQG. A comment From fed Chair Janet Yellen that the Fed is "highly focused" on risks of starting to tighten too early provided a late lift to Treasurys Thursday, noted Morgan Stanley.
        German 10-year government bond yields were trading at 0.74%, around 0.04 of a percentage point lower on the day. Italian 10-year yields were at 1.97% and Spanish yields at 1.96%, both also marginally lower on the day. Yields fall as bond prices rise.
        U.S. stocks looked on pace to end their upbeat week with muted action on Friday, with technology stocks set to take the lead as shares of Google rose in premarket trading on the heels of blockbuster results.
        The stock market has rallied this week as fears about Greece's debt crisis have receded, and as Federal Reserve Chairwoman Janet Yellen and other central bankers have worked to reassure investors.
        For the week, the S&P 500 is on track for a 2.3% gain as of Thursday's close, meaning the benchmark would snap a three-week losing streak. The Dow is eyeing a 2% advance and second-straight up week, while the Nasdaq is up 3.3%.
        On Thursday, U.S. stocks climbed as the Nasdaq closed at a record high and Netflix shares soared 18%.
        What strategists are saying: As second-quarter earnings continue to come out, traders should be "riding the trend here as the bulls will continue to pay up for these earnings," said Chris Weston at IG.
        Weston added: "It seems only a matter of time before the S&P 500 joins the NASDAQ in making a new all-time high in my opinion."
        European stock markets steadied after a seven-session rally largely fueled by expectations that Greece will be able to avert an exit from the eurozone.
        In early trade, the Stoxx Europe 600 was little changed. As of late Thursday, it had enjoyed its longest winning streak since late January, fueled in large part by Greek developments.
        The International Monetary Fund said it would participate in a Greek bailout plan if it includes debt restructuring and bold government reforms. On Thursday, eurozone finance ministers gave a provisional green light to negotiations on a new bailout package and the European Central Bank raised its emergency lending to Greek banks, which have been shut for close to three weeks.
        In commodity markets, NYMEX crude was down $0.12 lower at $50.49 a barrel, while Brent crude was 0.3% higher at $57.11 a barrel.
        "We continue to view the Iran nuclear deal as a negative price catalyst over the medium to long term," said ANZ in a note.
        Gold prices were unchanged at $1143.90 in the early European trade. In Asia, gold prices were trading flat with a strong dollar weighing on the precious metal. The safe haven appeal for the metal also dimmed when the Greek parliament agreed to new austerity measures. Low prices of gold has triggered some buying by Chinese and Indian investors but most are still holding back as they are anticipating further fall in prices.
        IMF Urges Debt Restructuring in Greek Deal
        The International Monetary Fund will participate in the Greek bailout plan if it includes debt restructuring and bold government reforms.
        Treasury's Lew Pressed Germany, France on Greek Debt
        U.S. Treasury Secretary Jacob Lew on pressed his counterparts in Germany and France to ensure Greece's debt is made sustainable as eurozone creditors negotiate a new emergency-financing package for the country.
        Obama, Saudi Foreign Minister to Meet Friday in Iran Deal's Shadow
        In the wake of the Iran nuclear accord, President Obama will meet Friday with Saudi Arabia's foreign minister, a White House official said. It is Obama's first meeting with a key American ally from an Arab state since reaching the deal.
        Terrorism Eyed in Chattanooga Killings
        A 24-year-old Kuwaiti-born man opened fire at two military facilities in Chattanooga, Tenn., killing four Marines and injuring three others before dying from a gunshot wound, authorities said.
        BOE's Carney: U.K. Rate Picture Could Be Clearer at Turn of Year
        The Bank of England's decision on when to start raising interest rates is likely to become clearer around the turn of the year, but any increases are likely to be gradual and limited to a level below past averages, BOE Governor Mark Carney said.
        Write to Sarka Halas at sarka.halas@wsj.com
        (END) Dow Jones Newswires

        July 17, 2015 06:12 ET (10:12 GMT)

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