Market Roundup
• Trump wants to move ahead with tariffs on Chinese imports worth $200 bln next week-Bloomberg.
• Argentine peso in free-fall despite central bank rate hike to 60 pct.
• As clock ticks, Canada and U.S seek ways to salvage NAFTA.
• China's Vice Premier Liu He says China, Japan should protect free trade.
• US Jul Personal Consumption Expenditure Real m/m, 0.2%, 0.3% previous.
• US Jul Personal Income m/m, 0.3%, 0.4% previous, 0.3% forecast.
• US Jul Personal Consumption Adjusted m/m, 0.4%, 0.4% previous, 0.4% forecast.
• US Jul Core PCE price Index m/m, 0.2%, 0.1% previous, 0.2% forecast
• US 25 Aug w/e Initial Jobless Claims, 213K, 210K previous, 214K forecast
• US 25 Aug w/e Jobless Claims 4-Wk Avg, 212.25K, 213.75K previous
• US 18 Aug w/e Continued Jobless Claims, 1.708M, 1.727M previous, 1.725M forecast, 1.728M revised
• CA Q2 GDP q/q, 0.7%, 0.3% previous, 0.4% revised
• CA Q2 GDP q/q Annualized, 2.9%, 1.3% previous, 3.0% previous, 1.4% revised
• CA Jun GDP m/m, 0.0%, 0.5% previous, 0.1% forecast.
Looking Ahead - Economic Data (GMT)
• 30 Aug 23:30 Japan previous Aug CPI Tokyo Ex fresh food, 0.8% previous, 0.8% forecast.
• 30 Aug 23:30 Japan Aug CPI Overall Tokyo, 0.9% previous
• 30 Aug 23:30 Japan Jul Jobs/Applicants Ratio, 1.62 previous, 1.62 forecast.
• 30 Aug 23:30 Japan Jul Unemployment Rate, 2.4% previous, 2.4% forecast.
• 30 Aug 23:50 Japan Jul Industrial Output Prelim, -1.8% previous, 0.2% forecast.
• 31 Aug 01:00 China Aug NBS Non-Mfg PMI, 54.00 previous
• 31 Aug 01:00 China Aug NBS Manufacturing PMI, 51.2 previous, 51.0 forecast
• 31 Aug 01:00 China Aug Composite PMI, 53.6 previous
• 31 Aug 01:00 China 0ct HIA New Home Sales m/m, -6.1% previous
• 31 Aug 01:30 China Jul Private Sector Credit, 0.3% previous
• 31 Aug 01:30 China Jul Housing Credit, 0.3% previous
• 31 Aug 01:30 China Aug AIG Manufacturing Index, 52.00 previous
• 31 Aug 05:00 Japan Jul Housing Starts y/y, -7.1% prev, -3.8% forecast
• 31 Aug 05:00 Japan Jul Construction Orders y/y, -6.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 06:30 National Bank of Austria Governor Ewald Nowotny takes part in a panel discussion on European capital markets at an economic forum in the Austrian village of Alpbach.
• 11:00 National Bank of Austria Governor Ewald Nowotny hosts reception at the Alpbach economic forum, Austria.
• 17:00 Remarks by ECB Vice President Luis de Guindos at the closing event of Cursos de La Granda organised by University of Oviedo in La Granda, Spain.
Currency Summaries
EUR/USD is likely to find support at 1.1631 levels and currently trading at 1.1661 levels. The pair has made session high at 1.1681 and hit lows at 1.1640 levels. The euro slipped lower against the U.S. dollar on Thursday as a flare-up in trade tensions between the United States and China drove traders to buy the U.S. currency. Bloomberg reported on Thursday that U.S. President Donald Trump told aides he wants to move ahead on a plan to impose tariffs on $200 billion worth of Chinese goods next week. Trump has threatened 25 percent tariffs on $200 billion of Chinese imports because of China's retaliatory tariffs on $50 billion worth of U.S. products. The U.S. tariffs are expected to take effect in late September after a public comment period ends on Sept. 5 he wants to move ahead on a plan to impose tariffs on $200 billion worth of Chinese goods next week. The dollar was also supported by Thursday's data showing U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month. With demand strong last month, consumer prices continued their gradual upward trend. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2 percent. In late US trading, the dollar index rose 0.2 percent to 94.738.
GBP/USD is supported in the range of 1.2930 levels and currently trading at 1.3005 levels. It reached session high at 1.3022 and dropped to session low at 1.2981 levels. Britain's pound declined against the dollar on Thursday as Britain's EU divorce talks drove sterling lower against the greenback. The European Union is prepared to offer Britain an unprecedentedly close relationship after it quits the bloc but would not allow anything that weakened the body's single market, chief Brexit negotiator Michel Barnier said on Wednesday. With seven months to go until Britain is due to leave the EU, the two sides are yet to reach a divorce deal. Officials increasingly expect an informal October deadline to slip into November. Britain's Brexit minister Dominic Raab told lawmakers on Wednesday he was confident that a deal was "within our sights", although he added that there was "some measure of leeway" on the October timetable. Sterling, which has come under pressure from growing concerns over the chances of Britain leaving the EU without a deal. The British government has been ramping up its no-deal preparations and last week published the first in a series of advice to businesses on how to prepare for the possibility it makes a clean break from the EU on March 29. Against the dollar GBP=D3, the British currency fell 0.3 percent and traded close to the $1.3 level.
USD/CAD is supported at 1.2900 levels and is trading at 1.2989 levels. It has made session high at 1.3000 and lows at 1.2960 levels. The Canadian dollar edged lower against its U.S. counterpart on Thursday as lower oil prices and concerns of a global trade war kept investors away from market. The Canadian dollar fell versus the greenback on Thursday as data showed the economy grew at a slower pace in the second quarter than forecast, supporting traders' view the Bank of Canada will leave key interest rates on hold next week. Prices on domestic government debt rose in the wake of the latest gross domestic product figures, flattening the yield curve on the notion of slowing economic growth amid U.S.-Canada trade talks. Still increasing oil prices and optimism that Ottawa will secure a deal in a revamped North American Free Trade Agreement (NAFTA) limited loonie's losses and the rise in bond prices. Canada's economy grew at a 2.9 percent annualized rate in the second quarter, the fastest in a year but a tad slower than the 3.0 percent pace seen among analysts. GDP was unchanged in June, compared with an expected 0.1 percent increase, Statistics Canada said on Thursday. The loonie was last down nearly 0.7 percent at C$1.2974 .
USD/JPY is supported around 110.79 levels and currently trading at 110.95 levels. It peaked to hit session high at 111.41 and made session lows at 110.94 levels. The Japanese yen strengthened against the dollar on Thursday as new concerns that the U.S.-Chinese trade dispute will intensify. U.S. and Chinese officials ended two days of talks on Thursday with no major breakthrough as their trade war escalated with activation of another round of dueling tariffs on $16 billion worth of each country's goods. U.S. President Donald Trump is prepared to quickly ramp up a trade war with China and has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, Bloomberg News reported on Thursday.The White House declined comment on the Bloomberg report, which cited six unidentified sources, and deflated markets. Trump has credited his electoral success to his hard line on trade, which he has argued hurts U.S. workers and favors foreign competitors. Washington is demanding Beijing improve market access and intellectual property protections for U.S. companies, cut industrial subsidies and slash a $375 billion trade gap. On the data front, U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month.
Equities Recap
European shares fell back on Thursday as weakness in Chinese markets and worries over a trade dispute between the United States and China eclipsed optimism that a NAFTA deal could be struck by Friday's deadline.
UK's benchmark FTSE 100 closed down 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 0.33 percent, Germany's Dax ended down by 0.6 percent, France’s CAC finished the day down by 0.4 percent.
U.S. stocks ended their four-day winning streak on Thursday as risk reduction ahead of the long holiday weekend accelerated on growing trade anxieties.
Dow Jones closed down by 0.52 percent, S&P 500 ended down by 0.44 percent, Nasdaq finished the day down by 0.26 percent.
Treasuries Recap
U.S. Treasury yields hit session lows on Thursday afternoon in a flight-to-quality sparked by a report that President Donald Trump planned to impose tariffs on $200 billion worth of Chinese goods next week, and after Argentina's central bank raised interest rates to 60 percent, roiling emerging markets.
The yield on the 10-year Treasury note fell 1.5 basis points as prices rose following the trade news, and was last at 2.859 percent.
The 30-year bond yield was down 1.5 basis points from the close on Wednesday, last at 3.005 percent.
Commodities Recap
Oil prices rose on Thursday to the highest in more than a month, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. inventories.
Brent crude oil rose 63 cents a barrel to settle at $77.77. U.S. crude settled 74 cents higher at $70.25 a barrel, after earlier hitting a session high of $70.50. Both contracts were at their highest in more than one month.
Gold slid below key support of $1,200 an ounce on Thursday, undermined by a firmer dollar following strong U.S. economic data.
Spot gold lost 0.6 percent to $1,198.84 an ounce by 1:37 p.m. EDT (1737 GMT), while December U.S. gold futures settled down $6.50, or 0.5 percent, at $1,205. Spot gold hit a six-day low of $1,195.95.
