Market Roundup
• U.S., China sketch outlines of deal to end trade war -sources
• J.P. Morgan pares U.S. Q1 GDP growth view to 1.5 pct
• ECB to make swift preparations for new bank loans: minutes
• Not there yet but closer: Britain and EU haggle over Brexit compromise
• Bank of Canada head says path back to neutral rates 'highly uncertain'
• US Dec Durable Goods, 1.2%, 1.5% forecast, 0.7% previous, 1.0% revised
• US Dec Durables Ex-Transport, 0.1%, 0.3% forecast, -0.4% previous, -0.2% revised
• US 16 Feb, w/e Initial Jobless Claims, 216k, 229k forecast 239k previous
• US 16 Feb, w/e Jobless Claims 4-Wk Avg, 235.75k, 231.75k previous
• US 9 Feb, w/e Continued Jobless Claims, 1.725 mln, 1.740 mln forecast 1.773 mln previous, 1.780 mln revised
• US Feb Markit Comp Flash PMI, 55.8, 54.4 previous
• US Feb Markit Mfg PMI Flash, 53.7, 54.7 forecast, 54.9 previous
• US Feb Markit Svcs PMI Flash, 56.2, 54.3 forecast, 54.2 previous
• US Jan Existing Home Sales, 4.94 mln, 5.00 mln forecast, 4.99 mln previous, 5.00 mln revised
• US Feb Philly Fed Business Index, -4.1, 14.0 forecast, 17.0 previous
• CA Dec Wholesale Trade MM, 0.3%, -0.1% forecast, -1.0% previous, -1.1% revised
Looking Ahead - Economic Data (GMT)
• 21 Feb 23:30 Japan Jan CPI, Core Nationwide YY, 0.8% forecast, 0.7% previous
• 21 Feb 23:30 Japan Jan CPI, Overall Nationwide, 0.3% previous
• 22 Feb 01:30 China Jan House Prices YY, 9.7% previous
Looking Ahead - Events, Other Releases (GMT)
• 08:30 Swedish Central Bank minutes from the monetary policy will be published in Stockholm.
• 13:40 Atlanta Fed's Raphael Bostic to give opening remarks before the First Annual Joint Research Day, organized by the Federal Reserve Banks of Atlanta and New York in New York
• 15:00 Bank of France Governor François Villeroy speaks about challenges faced by the euro system at an event hosted by the Bank of Portugal in Lisbon
• 15:15 New York Fed's John Williams and San Francisco Fed's Mary Daly participates in a panel discussion, hosted by The Initiative on Global Markets, University of Chicago Booth School of Business in new York
• 15:30 ECB's Mario Draghi delivers Speech on the occasion of the awarding of Laurea honoris causa to him by Universita degli studi di Bologna in Bologna, Italy
• 17:00 Fed's Richard Clarida speaks before the 2019 Monetary Policy Forum hosted by the Initiative on Global Markets, University of Chicago Booth School of Business in New York
• 17:30 New York Fed's Simon Potter to speak before the First Annual Joint Research Day, organized by the Federal Reserve Banks of Atlanta and New York in New York
• 18:30 St. Louis Fed's James Bullard, Philadelphia Fed's Patrick Harker and Fed's Randal Quarles participates in panel,hosted by The Initiative on Global Markets, University of Chicago Booth School of Business in New York
• 22:30 New York Fed's John Williams to deliver closing remarks before the First Annual Joint Research Day, organized by the Federal Reserve Banks of Atlanta and New York in New YorK
Currency summaries
EUR/USD: The euro edged higher against dollar on Thursday, after surveys showed business activity was surprisingly firm in February, particularly in France. French business activity rose more than expected as manufacturing growth helped offset the slack in services that has dogged firms in the wake of anti-government protests, though German PMI number was more of a mixed picture. The euro initially rose as much as 0.2 percent to the day's high of $1.1364 after the PMI data before retracing some gains to stand 0.1 percent up on the day. Immediate resistance can be seen at 1.1338 (38.2% retracement level), an upside break can trigger rise towards 1.1369 (23.6% retracement level).On the downside, immediate support is seen at 1.1316 (50% retracement level), a break below could take the pair towards 1.1291 (61.8% retracement level).
GBP/USD: The British pound declined against the dollar on Thursday, as stronger dollar and Brexit concerns weighed on British pound. The British currency has swung wildly in recent sessions as May tries to persuade European Commission chief Jean-Claude Juncker to modify her withdrawal deal and then get the tweaked agreement through the British parliament. If she fails, Britain could crash out of the world's biggest trading bloc on the March 29 exit date.The British currency slid to as low as $1.3036 down 0.10 percent on the day. Immediate resistance can be seen at 1.3050 (50% retracement level), an upside break can trigger rise towards 1.3085 (61.8% retracement level).On the downside, immediate support is seen at 1.3012 (38.2% retracement level), a break below could take the pair towards 1.2966 (23.6% retracement level).
USD/CAD The Canadian dollar weakened against the greenback on Thursday, as lower oil prices offset stronger-than-expected domestic data and Bank of Canada Governor Stephen Poloz continued to signal a more gradual pace of future interest rate hikes. Poloz indicated he was in no rush to resume monetary tightening, saying that while interest rates needed to move up into a neutral range of between 2.5 percent and 3.5 percent over time, the path back was now highly uncertain. At (2136 GMT), the Canadian dollar was trading 0.3 percent lower, at 1.3222 to the greenback, or 75.63 U.S. cents. The currency, which notched a two-week high on Wednesday, at 1.3151, traded in a range of 1.3163 to 1.3232. Immediate resistance can be seen at 1.3231 (23.6% retracement level), an upside break can trigger rise towards 1.3253 (11 DMA).On the downside, immediate support is seen at 1.3200 (38.2% retracement level), a break below could take the pair towards 1.3175 (50% retracement level).
USD/JPY: The dollar was little changed against the Japanese yen on Thursday, as investors consolidated positions and looked for fresh trading incentives amid U.S.-China trade negotiations and talks related to Britain's exit from the European Union. The greenback earlier fell, hurt by weaker-than-expected U.S. economic data that affirmed expectations the Federal Reserve will hold U.S. interest rates steady this year. The dollar was 0.13 lower versus the Japanese yen at 110.69. The dollar index, a gauge of its value against a basket of six major currencies, was up 0.12 percent at 96.62 Strong resistance can be seen at 110.88 (38.2% retracement level), an upside break can trigger rise towards 111.56 (100 DMA).On the downside, immediate support is seen at 110.41(50% retracement level), a break below could take the pair towards 109.95 (61.8% retracement level).
Equities Recap
European shares dipped on Thursday, weighed down by several weak earnings updates and after data showed that euro zone factory output unexpectedly fell last month.
The UK's benchmark FTSE 100 closed down by 0.9 percent, FTSEurofirst 300 ended the day down by 0.38 percent, Germany's Dax ended up by 0.2 percent, and France’s CAC finished the down by 0.1 percent.
Weak economic reports pressured U.S. stocks on Thursday after the market's recent run of gains, and a drop in healthcare shares added to the bearish momentum.
Dow Jones closed down by 0.40 percent, S&P 500 ended down 0.36 percent, Nasdaq finished the day down by 0.39 percent.
Treasuries Recap
Treasury bond yields rose on Thursday on news of progress in U.S.-China trade talks, and as soft U.S. economic data was attributed to the abnormal factors of a federal government shutdown and the trade war.
The yield on the benchmark 10-year government note rose 4.3 basis points, last trading at 2.695 percent. The two-year government note was up 3.1 basis points at 2.533 percent. At the end of the yield curve, the 30-year bond yield was last up 4.9 basis points at 3.047 percent.
Commodities Recap
Gold slipped from a 10-month peak on Thursday, pressured by signals the U.S. Federal Reserve will not adopt as dovish a stance on monetary policy as previously thought and as investors booked profits, while palladium retreated from a record high.
Spot gold 1 percent to $1,324.70 per ounce at (2144 GMT), having hit $1,346.73 in the previous session, its highest since April 19.U.S. gold futures settled down about 1.5 percent at $1,327.80.
Oil prices sank below recent 2019 highs as U.S. government data on Thursday showed a sharp build in crude stocks and record production, while concerns about slowing global economic growth weighed on the market.
U.S. West Texas Intermediate (WTI) crude oil futures fell 20 cents to settle at $56.96 a barrel after touching a 2019 high of $57.55 the previous day.
Brent crude futures fell 1 cent to settle at $67.07 after hitting a 2019 peak on Wednesday at $67.38.
