Market Roundup
• US Dec ADP National Employment, 250k, 190k forecast, 190k previous, 185k revised.
• US Dec Challenger Layoffs, 32.423k, 35.038k previous.
• US w/e Initial Jobless Claims, 250k, 240k forecast, 245k previous, 247k revised.
• US w/e Continued Jobless Claims, 1.914 mln, 1.925 mln forecast, 1.943 mln previous, 1.951 mln revised.
• US w/e Jobless Claims 4-Wk Avg, 241.75k, 237.75k forecast, 238.25k previous.
• US Dec Markit Comp Final PMI, 54.1, 53.0 previous.
• US Dec Markit Svcs PMI Final, 53.7, 52.4 previous.
• Canada Nov Producer Prices YY, 2.7%, 1.8% previous, 1.7% revised.
• Canada Nov Raw Materials Prices MM, 5.5%, 4.5% forecast, 3.8% previous.
• Canada Nov Raw Materials Prices YY, 14.2%, 6.6% previous.
• Trump credits his firmness for potential Korea talks, signals Olympic concession.
• U.S.-S.Korea military exercises to start after Paralympics –Mattis.
• China tightens bond trading rules in deleveraging campaign –PBOC.
• U.S. derivatives regulator to review bitcoin futures risks.
Looking Ahead - Economic Data (GMT)
• 00:30 Japan Dec Services PMI, 51.2 previous.
• 00:30 Australia Nov Trade Balance G&S (A$), 105 mln previous.
• 00:30 Australia Nov Goods/Services Imports, 2.0% previous.
• 00:30 Australia Nov Goods/Services Exports, -3.0% previous.
Looking Ahead - Events, Other Releases (GMT)
• 15:15 Fed's Harker speaks on the economic outlook at the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia
• 17:30 Fed's Mester participates in panel "Coordinating Conventional and Unconventional Monetary Policies for Macroeconomic Stability" before the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia
• 19:30 BoE's Haldane Chairing panel sessions at the Allied Social Sciences Association Annual Meeting in Philadelphia
Currency Summaries
EUR/USD is likely to find support at 1.2000 levels and currently trading at 1.2064 levels. The pair has made session high at 1.2088 and hit lows at 1.2057 levels. The euro edged higher against US dollar on Thursday as greenback failed to hold on to recent gains on the back of upbeat U.S. data and minutes from the Federal Reserve. A stronger-than-expected U.S. private-sector jobs report briefly helped the dollar pare losses versus the euro and extend gains against the yen. But those moves were short lived. U.S. private employers added 250,000 jobs in December, data from ADP Research Institute showed, the biggest monthly increase since March. Economists surveyed by Reuters had forecast a gain of 190,000 jobs, with estimates ranging from 165,000 to 225,000. The dollar index, which measures the currency against a basket of six major rivals, had slipped to its lowest since Sept. 20 on Tuesday, as optimism about the eurozone economy drove the single currency above $1.20 for the first time in 3-1/2 months. The index was last down 0.2 percent at 91.939.The dollar had bounced on Wednesday after strong manufacturing and construction data. It drew further support from the Fed's latest minutes, which indicated the U.S. central bank is still poised to raise interest rates several times this year.
GBP/USD is supported in the range of 1.3493 levels and currently trading at 1.3549 levels. It reached session high at 1.3558 and dropped to session low at 1.3528 levels. Britain's pound edged higher against the dollar on Thursday after data showed Britain's dominant services sector rose last month, however investors remained cautious on making new bets on the British currency. The pound was also supported by dollar weakness and a general rebound in risk appetite, which has lifted sentiment towards the British currency. Britain's dominant services sector grew unexpectedly quickly last month and businesses are more upbeat about 2018 than they were for much of 2017, but Brexit is weighing on investment plans, a survey showed on Thursday. Sterling rose 0.3 higher at $1.3548 and remained within striking distance of a four-month high of $1.3659 hit in late September. The pound last year recorded its best annual performance against the dollar since 2009, with an almost 10 percent rise amid broad dollar weakness. But it is still around 10 percent down against the dollar since the vote for Brexit. Against the euro, sterling is still more than 15 percent below its 2016 Brexit referendum day low.
USD/CAD is supported at 1.2470 levels and is trading at 1.2496 levels. It has made session high at 1.2531 and lows at 1.2501 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as Canadian dollar was boosted by weaker greenback and higher oil prices. A report showing that the U.S. economy created more private-sector jobs than expected last month lent some support to the U.S. dollar. But the greenback was still lower against a basket of major currencies. Oil rose above $68 a barrel to its highest since May 2015 after unrest in Iran sparked concerns about supply risks and with support coming from OPEC-led output cuts and demand-boosting cold weather in the United States. The Canadian dollar was trading at C$1.2497 to the greenback, up 0.30 percent. The currency traded in a range of C$1.2488 to C$1.2555. On Wednesday, it touched its strongest in 2-1/2 months at C$1.2488.On the data front, domestic data showed, producer prices rose by 1.4 percent in November from October, on higher prices for energy and petroleum products, Statistics Canada said. Home sales in Toronto, Canada's largest city, fell 18.3 percent in 2017 from the previous year's record as provincial government measures to cool the housing market weighed on demand.
USD/JPY is supported around 112.47 levels and currently trading at 112.74 levels. It peaked to hit session high at 112.86 and made session lows at 112.73 levels. The U.S. dollar strengthened against the yen on Thursday as upbeat December private hiring data boosted expectations that the Fed would raise interest rates at its March policy meetings. U.S. companies added 250,000 workers in December, marking the biggest monthly increase since March and topping the 190,000 gain forecast among analysts polled by Reuters, the ADP National Employment Report showed earlier on Thursday. The latest ADP data supported the notion of a solid payrolls report for December from the U.S. Labor Department, which is due at 8:30 a.m. (1330 GMT) on Friday. They also boosted bets in the futures market of a possible rate hike at the Fed's March 20-21 meeting. Federal funds futures implied traders saw a 73 percent chance of a quarter-point rate increase to 1.50 percent-1.75 percent in March, up from 68 percent late on Wednesday, according to CME Group's FedWatch. The greenback strengthened 0.29 percent versus the Japanese yen at 112.83 per dollar, it was last trading at 112.74.
Equities Recap
A rally in European stocks picked up pace on Thursday as services growth data for the euro zone confirmed a strengthening economy was bolstering corporate activity.
The UK's benchmark FTSE 100 closed up by 0.3 percent, FTSEurofirst 300 ended the day up by 0.93 percent, Germany's Dax ended up by 1.4 percent, and France’s CAC finished the day up by 1.5 percent.
The Dow Jones industrial average rose above the 25,000 level for the first time on Thursday and other major indexes scaled new records, propelled by strong economic data both in the United States and abroad.
Dow Jones closed up by 0.60 percent, S&P 500 ended up 0.40 percent, Nasdaq finished the day up by 0.18 percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday, with two-year yields hitting a more than nine-year peak as surprisingly strong December private hiring data boosted expectations the Federal Reserve would raise interest rates at its March policy meeting.
Benchmark 10-year Treasury yields were up nearly 4 basis points at 2.482 percent.The two-year yield reached 1.976 percent, the highest since October 2008, while the five-year yield touched 2.292 percent, the highest since April 2011.
Commodities Recap
Gold steadied around a 3-1/2-month high on Thursday as prospects for further U.S. interest rate increases put the brakes on a recent rally, while palladium touched record highs on tight supplies.
Spot gold rose 0.5 percent to $1,319.27 an ounce by 1:45 p.m. EST (1845 GMT), while U.S. gold futures for February delivery settled up $3.10, or 0.24 percent, at $1,321.6 per ounce.
Oil rose on Thursday to its highest since May 2015, on concern about supply risks due to unrest in Iran and another decline in U.S. inventories as refining activity hit a 12-year high.
Brent crude, the international benchmark, settled up 23 cents at $68.07 a barrel after hitting a high of $68.27 earlier in the session. U.S. crude settled up 38 cents at $62.01, after earlier hitting $62.21, its highest since May 2015.
