Market Roundup
• Dallas Fed's Kaplan favors rate hike pause amid uncertainty - Bloomberg
• White House Adviser Hassett: China's economy slowing quite a bit, will impact many U.S. companies
• US Dec ISM Manufacturing PMI, 54.1, 57.9 forecast, 59.3 previous
• US Dec ISM-New York Index, 848.5, 840.8 previous
• US Dec ISM Manuf Employment Idx, 56.2, 58.4 previous
• US 29 Dec, w/e Initial Jobless Claims, 231k, 220k forecast, 216k previous, 221k revised
• US 29 Dec, w/e Jobless Claims 4-Wk Avg, 218.75k, 218.00k previous, 219.25k revised
• US 22 Dec, w/e Continued Jobless Claims, 1.740 mln, 1.701 mln previous, 1.708 mln revised
• US Dec ADP National Employment, 271k, 178k forecast, 179k previous, 157k revised
• US Dec Challenger Layoffs, 43.884k, 53.073k previous
• US 21 Dec, w/e Mortgage Market Index, 293.8, 325.9 previous
• US 21 Dec, w/e MBA Mortgage Applications, -8.5%, -5.8% previous
• U.S. House elects Democrat Pelosi to be speaker for 2019-2020
• On Day 1 in power, House Democrats challenge Trump on shutdown
• Mexico's central bank board warns on inflation, rates
• Gold rises to highest since mid-2018 on global growth woes
Looking Ahead - Economic Data (GMT)
• 00:30 Japan Dec Nikkei Mfg PMI, 52.4 previous
• 01:45 China Dec Caixin Services PMI, 53.8 previous
Looking Ahead - Events, Other Releases (GMT)
• 15:15 Fed Chairman Jerome Powell and Atlanta Fed President Raphael Bostic participate in a panel discussion at an event in Atlanta
• 18:30 Federal Reserve Bank of Richmond President Thomas Barkin speaks at an event in Baltimore
Currency Summaries
EUR/USD: The euro strengthened against dollar on Thursday, as greenback weakened after down beat data on U.S. manufacturing activity suggested, the economy was probably not immune to slowing growth in China and Europe. The dollar's recent weakness also reflects a shift in investor expectations for U.S. interest rate rises. The dollar index, measuring the greenback against a basket of six other currencies, was last down 0.6 percent. The euro rose 0.48 percent against the dollar to $1.1392. Immediate resistance can be seen at 1.1411 (5 DMA), an upside break can trigger rise towards 1.1494 (Jan 3rd high).On the downside, immediate support is seen at 1.1342 (Dec 28th low), a break below could take the pair towards 1.1296 (Lower Bollinger Band).
GBP/USD: The pound strengthened against greenback on Thursday, as a weaker dollar and worries about the health of the global economy and particularly China supported the British pound. A widely-watched survey published on Thursday showed Britain's construction sector fell to a three-month low in December, though businesses were more upbeat about the coming year. The British currency hit as low as $1.2409 against the dollar, but recovered ground to trade last at $1.2625.Immediate resistance can be seen at 1.2649 (10 DMA), an upside break can trigger rise towards 1.2770 (Jan 2nd High).On the downside, immediate support is seen at 1.2612 (38.2% retracement level), a break below could take the pair towards 1.2540 (23.6% retracement level).
USD/CAD: The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Thursday as oil prices rose and the greenback broadly declined. The price of oil, one of Canada's major exports, rose despite volatile currency and stock markets, as well as concerns that an economic slowdown in 2019 will curb fuel demand.The Canadian dollar was last trading 0.4 percent higher at 1.3487 to the greenback. The currency, which fell 7.8 percent in 2018, touched its strongest since Dec. 21 at 1.3528. Immediate resistance can be seen at 1.3572 (10 DMA), an upside break can trigger rise towards 1.3651 (Daily High).On the downside, immediate support is seen at 1.3465 (21 DMA), a break below could take the pair towards 1.3400 (Psychological level).
USD/JPY: The dollar weakened against the Japanese yen on Thursday, as concerns over the damaging China-U.S. trade battle and its impact on world economic growth boosted assets considered safer investments, such as the Japanese yen. The dollar was 1.18 percent lower against the yen at 107.68 yen. Strong resistance can be seen at 107.62 (50% retracement level), an upside break can trigger rise towards 107.99 (61.8% retracement level).On the downside, immediate support is seen at 107.41 (38.2% retracement level), a break below could take the pair towards 112.97 (23.6% retracement level).
Equities Recap
Apple's first sales warning in nearly 12 years sent European shares sliding on Thursday, with the tech sector particularly badly bruised as chipmakers that supply the iPhone maker fell sharply.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.71 percent, Germany's Dax ended down by 1.45 percent, France’s CAC finished the day down by 1.5 percent.
Wall Street plunged on Thursday after slowing U.S. factory activity on the heels of a dire revenue warning from Apple Inc fueled fears of a global economic slowdown.
Dow Jones closed down by 2.84 percent, S&P 500 ended down by 2.49 percent, Nasdaq finished the day up by 3.09 percent.
Treasuries Recap
The U.S. two-year Treasury note yield dropped below 2.4 percent on Thursday afternoon, reaching parity with the federal funds effective rate for the first time since 2008.
The two-year Treasury yield fell to its lowest since May 30 and was last down 12 basis points at 2.39 percent. The two-year yield rises with investors' expectations of rate hikes.
The benchmark 10-year government note yield fell to a session low of 2.55 percent, a more than 50 percent retracement from its 2018 high. It is down 9.5 basis points, falling below 2.6 percent for the first time since January 2018.
Commodities Recap
Gold prices climbed to a 6-1/2 month peak, moving closer to the key $1,300 an ounce level on Thursday, as concerns about economic slowdown gripped global markets and fuelled demand for safe-haven bullion.
Spot gold gained 0.7 percent to $1,294.03 per ounce at (2220 GMT), having earlier touched $1,292.90, its highest since June 15.U.S. gold futures settled up 0.8 percent at $1,294.80 per ounce.
Oil prices rose more than 1 percent on Thursday in volatile trade, drawing support from signs that Saudi Arabia is cutting crude output but pressured by concerns that slowing global economic growth could dent demand.
Brent crude futures gained $1.04 to settle at $55.95 a barrel, a 1.89 percent gain. U.S. West Texas Intermediate (WTI) crude futures rose 55 cents to settle at $47.09 a barrel, a 1.18 percent gain.
