Markt Roundup
• US jobless claims 244k v 241k forecast, 238k previous, 4-wk avg lowest since 1973.
• US home prices m/m +0.4% in Dec v 0.7% previous, +6.2% y/y – FHFA.
• Mexico 1st half month inflation y/y 4.71% v 4.78% previous; core 4.2% v 3.72% previous.
• US Treasury’s Mnuchin: wants "very significant" tax reform by Aug, doesn’t see changes to NAFTA in short-term.
• US Treasury’s Mnuchin: sees limited impact from Trump policies in ’17, has concerns about BAT.
• Fed’s Lockhart: As long as monetary policy functioning well no urgency to shrink balance sheet.
• IFOP Poll: Le Pen to get 26.5% of vote in 1st round of French election, Macron to beat Le Pen in Runoff 61% to 39%.
• ECB rate setters play down recovery, indicating steady policy; with upcoming elections ECB keen to avoid the suggestion of interference in political matters.
• Stocks set record highs, oil jumps on inventory drop, DXY slips on perceived less hawkish Fed minutes.
• Iran says oil prices over USD55/bbl harmful for OPEC, may lead to a rise in output by non-OPEC producers.
Looking Ahead - Economic Data (GMT)
• No Significant Events
Looking Ahead - Events, Other Releases (GMT)
• 22:30 Australia RBA's Lowe Testimony to Parliament Committee
Currency Summaries
EUR/USD is likely to find support at 1.0535 levels and currently trading at 1.0577 levels. The pair has made session high at 1.0594 and hit lows at 1.0562 levels. The euro declined against the dollar on Thursday as uncertainty over the European and U.S. political along with Wednesday's slightly dovish Federal Reserve meeting minutes weighted on the greenback. The number of Americans filing for unemployment benefits rose slightly last week but the four-week average of such claims, considered a better gauge, fell to a 43-1/2-year low in a sign of a strengthening labor market. Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 244,000 for the week ended Feb. 18, the Labor Department said. It was the 103rd straight week that claims remained below 300,000, a threshold associated with a healthy labor market. The euro rose as much as 0.3 percent against the dollar to $1.0580. The currency has been trapped in a range of around $1.0680-$1.0491 since early February, with unease over the European and U.S. political outlook has limited demand for single currency.
GBP/USD is supported in the range of 1.2484 levels and currently trading at 1.2540 levels. It reached session high at 1.2560 and dropped to session low at 1.2500 levels. Sterling rose against dollar to hit two-week high on Thursday, as growing concerns about the shape of politics in the United States and French presidential elections helped the British pound. The pound jumped as much as 0.9 percent against the U.S. dollar in late US session, hitting $1.2553, its highest since Feb. 9.Concern that the British economy is finally showing signs of strains predicted since last June's vote to leave the European Union have pressured the pound over the past fortnight, and data on Wednesday showed a fall in business investment in the fourth quarter. But as nerves grow over economic policy in the United States and political stability in Europe, the dollar and euro have dipped, giving some respite to the battered pound. The dollar fell broadly on Thursday, weighed down by a perceived lack of progress on U.S. tax reforms and public spending, while Wednesday's more-dovish-than-expected Federal Reserve meeting minutes also weighed on the greenback.
USD/CAD is supported at 1.3060 levels and is trading at 1.3113 levels. It has made session high at 1.3112 and lows at 1.3085 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as prices of oil climbed and the greenback retreated against a basket of major currencies. U.S. crude prices were up 1.98 percent at $54.65 a barrel after U.S. data showed a surprise decline in inventories, suggesting that a global glut may be ending after moves by OPEC to cut production. On the data front, Canadian average weekly earnings of non-farm payroll employees rose 1.0% in December, while the number of non-farm payroll employees increased by 39,200 for the same month, data from Statistics Canada showed. The Canadian dollar was last trading at C$1.3103 to the greenback, or 76.34 U.S. cents, stronger than Wednesday's close of C$1.3144, or 76.08 U.S. cents. Canada's inflation report for January is due on Friday, with economists expecting the annual rate to edge up to 1.6 percent.
AUD/USD is supported around 0.7664 levels and currently trading at 0.7714 levels. It hit session high at 0.7740 and made session lows at 0.7704 levels. The Australian dollar declined against US dollar on Thursday as Australian dollar was dragged down by surprisingly sharp fall in business spending last quarter offering speculators an excuse to short the currency. Data showed Australian business investment fell for the fourth straight quarter. Figures from the Australian Bureau of Statistics showed investment slipped 2.1 percent in the fourth quarter to A$27.6 billion ($21.18 billion), when analysts had looked for a fall of only 1 percent. The Australian dollar dropped to $0.7714, from daily highs of $0.7740. It had edged as high as $0.7740 earlier when the U.S. dollar took a knock from uncertainty of progress on U.S. tax reform and French presidential election. The Reserve Bank of Australia (RBA) holds its monthly policy meeting on March 7 and is widely expected to keep rates at a record low 1.5 percent where they have been since August.
Equities Recap
European shares fell slightly on Thursday, weighed down by a pull-back in banking and mining stocks in a day where trading activity was dominated by a raft of company earnings.
UK's benchmark FTSE 100 closed up by 0.4 percent, FTSEurofirst 300 ended the day down by 0.20 percent, Germany's Dax ended down by 0.5 percent, France’s CAC finished the day down by 0.2 percent.
U.S. stocks edged higher on Thursday, buoyed by energy stocks and a renewed pledge by President Donald Trump to chief executives of major U.S. companies to bring back millions of jobs to the United States.
Dow Jones closed up by 0.15 percent, S&P 500 ended up 0.03 percent, Nasdaq finished the day down by 0.44 percent.
Treasuries Recap
U.S. Treasury debt yields fell on Thursday as investors fretted about the lack of clarity in the Trump administration's policies and doubted whether its proposed reforms would have as big an impact as many initially thought they would.
In afternoon trading, U.S. 10-year notes were last up 10/32 in price, yielding 2.382 percent, compared with 2.418 percent late Wednesday. Yields fell as low as 2.379 percent, their weakest level since Feb. 9.
U.S. 30-year bond prices rose 10/32, yielding 3.021 percent, down from Wednesday's 3.036 percent.
U.S. two-year note prices were up 2/32, yielding 1.192 percent, down from Wednesday's 1.224 percent.
Commodities Recap
Oil prices rose on Thursday but gains were pared after U.S. government data showed a seventh straight build in crude stocks, suggesting high inventories could undermine OPEC's move to cut output.
Benchmark Brent crude oil rose 74 cents a barrel to settle at $56.58 after touching a high of $57.26. U.S. light crude traded up 86 cents at $54.45 a barrel after touching $54.94 a barrel.
Gold prices rose 1 percent to a 3-1/2-month high on Thursday after minutes from the latest Federal Reserve policy meeting further dampened expectations for an interest rate hike in March, lowering U.S. bond yields and pressuring the dollar.
Spot gold was on track for its biggest daily gain since Feb. 6, and was up 1 percent at $1,249.36 an ounce by 2:28 p.m. EST (1928 GMT), after rising to $1,251.14 an ounce, its highest since Nov. 11.U.S. gold futures settled up 1.5 percent at $1,251.40.
