Market Roundup
• US jobless claims -19k (223k v 242k previous) near 44-yr low; Continuing claims +3k, 4-wk avg -6.25k.
• Fed’s Powell: Case for March rate hike has come together, wants to get rates well above zero before reducing balance sheet.
• Inflation rebound keeps euro zone bonds on defensive EZ inflation hits 2% in Feb as per forecast.
• Reuters Poll: ECB sidelined this year; to tweak guidance or taper QE in shift.
• Trump administration's dollar policy not clear -FX strategists.
• Russian cuts to oil production stall in February had pledged to cut 300k BPD only cut 100k BPD in Feb.
• Brazil rate cut pace hinges on economy, inflation -central bank.
Looking Ahead - Economic Data (GMT)
• 22:30 Australia AIG Services Index Feb 54.50- previous
• 23:30 Japan All Household Spending YY* Jan forecast -0.4%, -0.30%-previous
• 23:30 Japan All Household Spending MM* Jan forecast 0.3%, -0.60%- previous
• 23:30 Japan CPI, Core Nationwide YY Jan forecast 0%, -0.20%- previous
• 23:30 Japan CPI, Overall Nationwide* Jan 0.30%- previous
• 23:30 Japan CPI Core Tokyo YY* Feb forecast -0.2%, -0.30%- previous
• 23:30 Japan CPI, Overall Tokyo* Feb 0.10%- previous
• 23:30 Japan CPI Index* Jan 99.8-previous
• 23:30 Japan Jobs/Applicants Ratio Jan forecast 1.44, 1.43-previous
• 23:30 Japan Unemployment Rate Jan forecast 3%, 3.10%- previous
• 05:00 Japan Consumer Confidence. Index* Feb 43.2-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0473 levels and currently trading at 1.0503 levels. The pair has made session high at 1.0528 and hit lows at 1.0493 levels. Euro declined against the dollar on Thursday as dollar was lifted by upbeat US economic data and increased hopes that the Federal Reserve will raise interest rates at its March meeting. Euro took a hit after data showed U.S. jobless claims fell to a 44-year low. Labor tightness, combined with rising inflation, could encourage the Federal Reserve to raise interest rates at its March 14-15 policy meeting. The stronger labor market and rising inflation could push the Federal Reserve to raise interest rates this month. Several Fed officials have in recent days suggested the U.S. central bank could increase borrowing costs soon. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 223,000 for the week ended Feb. 25, the lowest level since March 1973, the Labor Department said on Thursday. The greenback was last up 0.64 percent against the Japanese yen at 114.43, the highest since Feb. 15 and gained 0.41 percent against the euro to $1.0503.
GBP/USD is supported in the range of 1.2235 levels and currently trading at 1.2260 levels. It reached session high at 1.2289 and dropped to session low at 1.2241 levels. Sterling declined against dollar on Thursday as dollar boosted by growing expectations of a March U.S. interest rate hike, while data painted a mixed picture of Britain's economy. A survey on Thursday showed Britain's construction industry growing slightly in February but new orders slowed. Growth across Britain's construction industry picked up slightly in February, driven by the civil engineering sector, though a slowdown in new orders and soaring costs added to mixed signals for the economy. The Markit/CIPS Construction Purchasing Managers' Index (PMI) edged up to 52.5 from 52.2 in January, above forecasts in a Reuters poll that had pointed to an unchanged reading. Sterling fell by 0.1 percent on the day to $1.2267 by 2100 GMT but was far more robust against the broadly stronger dollar than a handful of other major currencies including the yen and the Australian and New Zealand dollars.
USD/CAD is supported at 1.3341 levels and is trading at 1.3394 levels. It has made session high at 1.3400 and lows at 1.3365 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday shrugging off solid domestic economic growth data as lower oil prices and increased bets on a U.S. interest rate hike weighed on the loonie. The U.S. dollar has risen against a basket of currencies in the last two sessions as a string of U.S. Federal Reserve officials signal that rates may rise as soon as mid-March .The loonie was also pressured by a decline in prices for oil, a major Canadian export. The Canada's economy grew at a faster pace than anticipated in the final quarter of 2016, lifted by consumer spending and a drop in imports, but the strong performance is not expected to prod the central bank to change its cautious stance on interest rates. Gross domestic product grew at an annualized 2.6 percent rate in the fourth quarter, Statistics Canada said on Thursday, beating economists' forecasts for 2 percent growth. The Canadian dollar was last trading at C$1.3395 to the greenback, or 74.74 U.S. cents, weaker than Wednesday's close of C$1.3335, or 74.99 U.S. cents.
AUD/USD is supported around 0.7541 levels and currently trading at 0.7569 levels. It hit session high at 0.7592 and made session lows at 0.7557 levels.The Australian dollar declined against US dollar on Thursday as the Australian dollar declined after oil prices fell and dollar firmed across the board on increased optimism that on growing U.S. rate hike expectations in March following buoyant U.S. economic data and hawkish comments from Federal Reserve officials. Several Federal Reserve officials have stressed in recent days that a rate hike could come as soon as this month. Late on Wednesday, Fed Governor Lael Brainard said an improving global economy and a solid U.S. recovery mean a raise will be appropriate soon. The Aussie fell to a 3-week low, down 0.9 percent at $0.7571. Oil prices fell for a third consecutive day after a record build-up in U.S. crude inventories and data showed Russian oil production cuts have stalled.
Equities Recap
European shares paused for breath on Thursday after a strong rally in the previous session, though there were sharp gains from Britain's Melrose and Norway's Subsea after well-received results.
UK's benchmark FTSE 100 ends flat, the pan-European FTSEurofirst 300 ended the day up by 0.05 percent, Germany's Dax ended down by 0.1 percent, France’s CAC finished the day up by 0.1.
U.S. stocks ended slightly higher on Monday and the Dow closed at a record high for a 12th straight session, as President Donald Trump said he would make a "big" infrastructure statement on Tuesday.
Dow Jones closed down by 0.54 percent, S&P 500 ended down 0.60 percent, Nasdaq finished the day down by 0.74 percent.
Treasuries Recap
U.S. two-year Treasury yields hit their highest in more than 7-1/2 years on Thursday, while other U.S. yields hit multi-week or multi-month highs on increasing expectations that the Federal Reserve will raise interest rates at its March meeting.
Yields on U.S. two-year notes, which are considered most vulnerable to Fed rate hikes, hit their highest since August 2009 at 1.340 percent.
The three-year yield reached a nearly 11-week high of 1.617 percent, while the benchmark 10-year hit a more than two-week high of 2.505 percent.
Commodities Recap
Oil prices fell more than 2 percent on Thursday after Russian crude production remained unchanged in February, showing weak compliance with a global deal to curb supply to tighten the oversupplied market.
Brent futures ended the session $1.28, or 2.3 percent, lower at $55.08 per barrel and U.S. crude settled down $1.22, or 2.3 percent, at $52.61.
Gold prices were on track for their weakest session since December on Thursday, buoyed by a firm dollar and rising U.S. rate hike expectations in March following buoyant U.S. economic data and hawkish comments from Federal Reserve governors.
Spot gold was down 1.3 percent at $1,232.61 an ounce by 1:54 p.m. EST (1854 GMT), on track for the biggest one-day fall since Dec. 15.U.S. gold futures settled down 1.4 percent at $1,232.90.
