Market Roundup
• US jobless claims unexpectedly fall in latest week 249k v 257k forecast, 4-wk avg dips 253.5h v 256k previous.
• ECB determined to press on with bond purchases, Worried by lack of recovery in core inflation - Sept mins.
• ECB GC reiterates capacity & readiness to act if needed, ready to use all available instruments.
• ECB’s Praet: need to be attentive to possibility of adverse effects of low-interest rates.
• German Economy Minister: EU should try to keep Britain as close as possible.
• UK’s Hammond: would welcome Carney staying at BoE for full 8-yr term, UK econ fundamentally strong (CNBC).
• Oil rallies as hopes grow for output cut, Algerian oil minister says OPEC could cut more.
• US dealers see some borrowing costs rise after fund reform - Fed survey.
• German companies ready to provide capital for Deutsche Bank –Handelsblatt.
Looking Ahead - Economic Data (GMT)
• 22:30 Australia AIG Construction Index Sep 46.6-previous
• 23:50 Japan Foreign Reserves Sep 1256.10b- previous
• 00:00 Japan Overtime Pay Aug -1.80%- previous
• 05:00 Japan Coincident Indicator MM* Aug 0.7- previous
• 05:00 Japan Leading Indicator* Aug -0.70- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is supported at 1.1100 levels and currently trading at 1.1146 levels. The pair has made session high at 1.1187 and hit lows at 1.1139 levels. Euro slipped lower against the greenback on Thursday as the dollar strengthened across the board after encouraging data on U.S. jobs reinforced the view the Federal Reserve would raise interest rates at the end of the year. Data on Thursday showed that the number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, an indication of firmness in the labor market. The single currency was down 0.4 percent at $1.1153.The euro touched a near five-week high versus the yen at 116.28 yen before retreating to 115.86 yen, up 0.05 percent on the day. The dollar rose to its highest against the yen in a month and pinned sterling firmly to a three-decade low on worries about Britain's exit from the European Union. Against a basket of currencies, the greenback gained 0.5 percent. U.S. jobs report due out on Friday, strong U.S. jobs numbers could cement expectations of a Federal Reserve rate increase later this year and ripple through markets. Economists polled by Reuters forecast nonfarm payrolls to increase by 175,000.
GBP/USD is supported in the range of 1.2600 levels and currently trading at 1.2604 levels. It reached session high at 1.2665 and dropped to session low at 1.2600 levels. British pound fell to a 31-year low against the greenback on Thursday as renewed anxiety about the repercussion from Britain's "hard" exit from the European Union and Prime Minister Theresa May's comments on the impact of loose monetary policy weighted on the pound. May, in a speech to Conservative Party delegates on Wednesday, raised the issue of the side effects of ultra-low interest rates and money-printing. Although her spokesman later played down suggestions that she was signaling changes ahead in monetary policy, it led to speculation the government was against further interest rate cuts, given the adverse impact on savings and pensions. Sterling fell 1 percent to $1.2612, a poll released on Thursday showed more losses are in store. The currency has lost 2.5 percent this week, hurt by May's announcement on Sunday that the formal process to take Britain out of the EU will start by the end of March.
USD/CAD is likely to find support at 1.3160 levels and is trading at 1.3219 levels. It has made intraday high at 1.3249 and lows at 1.3191 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as strong U.S. economic data has boosted expectations that the U.S. Federal Reserve will soon act on rates, denting demand for commodity-related currencies. A potentially strong U.S. jobs report on Friday could further weaken the loonie, as Canada's currency is colloquially known, as investors increase bets that the Federal Reserve will raise U.S. interest rates later this year. Oil rose more than 1 percent, spurred by news of another informal OPEC meeting on output cuts and plunging U.S. crude inventories, with some saying the market has overshot itself with a near 15-percent gain in seven sessions. The Canadian dollar was last trading at C$1.3219 to the greenback, or 75.68 U.S. cents, weaker than Wednesday's close of C$1.3182, or 75.86 U.S. cents.
AUD/USD is supported around 0.7553 levels and currently trading at 0.7585 levels. It hit session high at 0.7590 and made session lows at 0.7561 levels. The Australian dollar declined against US dollar on Thursday as the dollar strengthened against all major commodity exporting currencies after upbeat US economic data supported the view that Federal Reserve will raise interest rate in December. The market is currently pricing in a 60 percent chance of a Fed rate hike in December although a strong employment report could see the odds favoring hike in November. The Australian dollar slipped 0.2 percent to $0.7583. It looked set to end the week down after two straight weekly gains as investor attention veers to Fridays Employment data. U.S. employers are predicted to have added 175,000 jobs last month, according to the median forecast of economists polled by Reuters. The data is due on Friday and a solid figure could add to expectations of a Fed rate hike before year-end.
Equities Recap
European shares ended mixed on Thursday after easyJet dropped to its lowest in more than three years, although the beaten-down banking sector rose for the third straight session.
UK's benchmark FTSE 100 closed up by 0.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.25 percent, Germany's Dax ended up by 0.1 percent, France’s CAC finished the day up by 0.1 percent.
Major U.S. stock indexes were little changed on Thursday even as declining names outnumbered advancers, ahead of job market data seen as key to determine whether the Federal Reserve will raise rates before the end of the year.
Dow Jones closed down by 0.06 percent, S&P 500 ended down up 0.05 percent, Nasdaq finished the day down by 0.16 percent.
Treasuries Recap
U.S. Treasury yields rose to three-week highs on Thursday as investors prepared for a potentially strong jobs report on Friday, which will be interpreted for when the Federal Reserve is likely to next raise interest rates.
Benchmark 10-year notes fell 7/32 in price to yield 1.74 percent, up from 1.72 percent late on Wednesday. The yields have climbed from 1.54 percent last Friday.
Commodities Recap
Gold fell for the eighth straight session on Thursday, slipping to a four-month low, pressured by a stronger dollar after U.S. weekly jobless claims fell and ahead of key data that could put the Federal Reserve on track to raise interest rates this year.
Spot gold fell to $1,250.35 an ounce, its lowest since June 8 after extending losses below the 200-day moving average. By 2 p.m. (1800 GMT) it was down 1.2 percent at $1,251.17.
The most-active U.S. gold futures for December delivery settled down 1.2 percent at $1,253 per ounce.
Oil rose more than 1 percent to four-month highs on Thursday, spurred by another informal OPEC meeting on output cuts and plunging U.S. crude inventories, with some saying the market has overshot itself with a nearly 15-percent gain in seven sessions.
Brent crude settled up 65 cents, or 1.3 percent, at $52.51 a barrel. It rose earlier to $52.65, its highest since June 9.
U.S. West Texas Intermediate crude closed up 61 cents, or 1.2 percent, at $50.44. It was WTI's first settlement above $50 since June 24.
