Market Roundup
• US Q3 GDP Final, 3.2%, 3.3% forecast, 3.3% previous.
• US Q3 GDP Deflator Final, 2.1%, 2.1% forecast, 2.1% previous.
• US w/e Initial Jobless Claims, 245k, 231k forecast, 225k previous.
• US w/e Continued Jobless Claims, 1.932 mln, 1.900 mln forecast, 1.886 mln previous, 1.889 mln revised.
• US Q3 Core PCE Prices Final, 1.3%, 1.4% forecast, 1.4% previous.
• US Dec Philly Fed Business Index, 26.2, 21.5 forecast, 22.7 previous.
• U.S. House unveils new stop-gap funding bill to avert a shutdown .
• Catalan separatists seen close to absolute majority - exit poll.
• OPEC starts working on an oil supply cut exit strategy – sources.
• Mexico inflation ticks up in December, pressuring central bank.
• Brazil inflation accelerates near official target in mid-Dec.
• South American trade bloc gains strength, misses EU deal.
• Russia's Putin orders issue of bonds for funds repatriation in 2018.
• Canada Nov CPI BoC Core YY, 1.3%, 0.9% previous.
• Canada Nov CPI BoC Core MM, -0.1%, 0.3% previous.
• Canada Nov CPI Inflation MM, 0.3%, 0.2% forecast, 0.1% previous.
• Canada Nov CPI Inflation YY, 2.1%, 2.0% forecast 1.4% previous.
• Canada Oct Retail Sales MM, 0.3%, 1.5% forecast, 0.1% previous, 0.2% revised.
Looking Ahead - Economic Data (GMT)
• No significant events
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1808 levels and currently trading at 1.1862 levels. The pair has made session high at 1.1873 and hit lows at 1.1846 levels. The euro dipped against the greenback on Thursday as the dollar recovered ground after two days of losses in light trading, lifted by generally positive U.S. data and a tax overhaul plan that could prompt the Federal Reserve to raise interest rates at a faster-than-expected pace. Still, the U.S. currency was on track to post its worst yearly performance in 14 years. That said, the medium-term outlook for the dollar has turned a little more positive than what many on Wall Street had priced in, with expected rate hikes from the Fed next year and, at the very least, modest benefits from the U.S. tax program. U.S. economic data of late, for instance, has become more dollar supportive. Data showed on Thursday that the U.S. economy grew at 3.2 percent in the third quarter, its fastest pace in more than two years, boosted by robust business spending and poised for what could be a lift next year from sweeping tax cuts passed by Congress this week. The dollar was slightly trading higher against a basket of major currencies at 93.352.The euro was trading modestly lower at $1.1864, having gained around 1 percent so far this week, supported by a rise in German bond yields.
GBP/USD is supported in the range of 1.3325 levels and currently trading at 1.3382 levels. It reached session high at 1.3386 and dropped to session low at 1.3329 levels. Sterling was little changed against the dollar on Thursday in a quiet market after falling initially following a survey that showed consumer sentiment had fallen to a four-year low and news that Britain's deputy prime minister had been forced to resign. The pound had edged lower following the resignation but data showing British public finances had strengthened in November helped the pound recover. British Prime Minister Theresa May forced Damian Green to resign after an internal investigation found he had made misleading comments about pornography on computers in his office. The resignation of one of May's most trusted allies is a blow as she navigates the final year of tortuous negotiations towards Britain's exit from the European Union in March 2019. The next phase of the talks has weighed on the pound in recent days, and kept in check gains made after Britain and the EU agreed to move to the second phase of talks. The GfK consumer confidence index showed British consumer sentiment at its lowest level since December 2013 as inflation-squeezed households took a gloomier view of their finances. The pound was flat against the dollar at 1.3376 after earlier slipping 0.1 percent. Against the euro, the pound recovered and was flat at 0.88.
USD/CAD is supported at 1.2691 levels and is trading at 1.2730 levels. It has made session high at 1.2773 and lows at 1.2696 levels. The Canadian dollar rose sharply against its U.S. counterpart on Thursday as upbeat domestic economic data raised expectations the Bank of Canada could hike rates again as soon as January. Canada's annual inflation rate rose in November to its highest level since the start of the year, lifted by an increase in gasoline and food prices, data from Statistics Canada showed on Thursday. The annual rate increased to 2.1 percent last month from 1.4 percent in October, topping economists' forecasts for 2.0 percent. It was the highest level since January and the first time inflation has hit the central bank's 2 percent target since February. Underlying inflation also showed strength, with two out of three of the Bank of Canada's core measures rising on an annual basis. Chances of a rate hike in January have increased to 49 percent from 38 percent just before the data releases, the overnight index swaps market indicated. Oil prices were little changed after the operator of Britain's Forties pipeline in the North Sea said it expected to restart in early January after repairs over Christmas. Oil prices had risen since the pipeline was shut on Dec 11. The Canadian dollar was last trading at C$1.2731 to the greenback, up 0.6 percent.
NZD/USD is supported around 0.6950 levels and currently trading at 0.7010 levels. It hit session high at 0.7011 and made session lows at 0.7003 levels. The New Zealand dollar jumped higher against the greenback on Thursday after data showed New Zealand Q3 economic growth topped expectations. Data showed New Zealand's economy grew faster than expected in the third quarter, sparking a rally in the local dollar, but downturns in some sectors pointed to a more muted outlook than the new government would like. Official figures showed a rebound in the construction sector drove gross domestic product up 0.6 percent in the three months ending September, topping economists' forecasts of 0.5 percent, but falling well short of the revised 1 percent hit the previous quarter. Thursday's GDP figures were the first since the centre-left Labour Party took office in October and suggest it may have to grapple with a slower economy next year. Annual expansion was 2.7 percent, beating the 2.3 percent forecast by economists, but still suggesting growth could undershoot the government's forecasts of 3.3 percent in the year to June 2018. The New Zealand dollar climbed as far as $0.7020, within kissing distance of $0.7034 seen last week, the highest since mid-October. It was last trading at 0.7009.
Equities Recap
Financials led European stocks higher on Thursday in a reversal of earlier losses after a muted response to the approval by the U.S. Congress of a long-anticipated tax overhaul, while a vote in Catalonia remained in focus.
UK's benchmark FTSE 100 closed up by 1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.64 percent, Germany's Dax ended up by 0.03 percent, France’s CAC finished the day up by 0.6 percent.
Wall Street's main indexes rose on Thursday as investors were hopeful that lower corporate tax rates would allow companies to spend additional capital on dividends, new projects and wages, which could give a boost to the overall economy.
Dow Jones closed up by 0.24 percent, S&P 500 ended up 0.22 percent, Nasdaq finished the day up by 0.08 percent.
Treasuries Recap
The U.S. yield curve flattened on Thursday with 10-year yields falling from a nine-month peak as bargain-minded investors emerged, providing a respite from a sharp three-day bond market selloff tied to a sweeping U.S. tax bill.
The 10-year Treasury yield was 2.482 percent, down 1 basis point from late on Wednesday after touching a nine-month high of 2.504 percent earlier on Thursday.
The two-year yield rose from Wednesday's close at 1.861 percent to 1.878 percent, its highest level since October 2008. The five-year hit 2.252 percent, its highest level since April 2011, up from 2.242 percent at Wednesday's close.
Commodities Recap
Gold held near an earlier two-week high on Thursday after U.S. data on gross domestic product, jobless claims and regional business activity left traders' views on a stable economy unchanged and the dollar broadly steady.
Spot gold was at up 0.06 percent at $1,266.35 an ounce by 2:32 p.m. EST (1932 GMT), rising for the fifth straight session and hitting its highest since Dec. 6 at $1,268.26 in earlier trade. U.S. gold futures settled up 0.08 percent at $1,270.60.
Oil prices were little changed on Thursday, erasing earlier losses after the operator of Britain's Forties pipeline in the North Sea said it was expected to restart in early January after repairs over Christmas.
Brent futures were up 20 cents, or 0.3 percent, at $64.76 a barrel by 12:32 p.m. EST (1732 GMT), while U.S. West Texas Intermediate crude was up 24 cents, or 0.4 percent, at $58.33 per barrel.
