Market Roundup
• US Initial jobless claims 237k v 242k forecast, 245k -previous.
• US Jobless claims 4-wk Avg 243k, 242k - previous.
• US Industrial production MM 0.0% v 0.2% forecast, 1.1% - previous.
• US NAHB housing market index 67 v 70 forecast, 69 - previous.
• US NY Fed manufacturing 19.8 v 4.0 forecast, -1.0 - previous.
• US Import prices MM -0.3% v -0.1% forecast, 0.2% - previous.
• US Export prices MM -0.7% v 0.1% forecast, 0.2% - previous.
• BoE policymakers vote 5-3 to hold rates at 0.25% in June.
• BoE'S Forbes, McCafferty and Saunders vote to raise rates, most votes since May 2011.
• Wall Street stumbles as tech slide deepens, Apple, Amazon, Alphabet
weigh on S&P 500.
• British and EU negotiators to launch Brexit talks on Monday.
• White House still weighing how to handle raising the debt ceiling- Budget director Mulvaney.
• Euro zone bailout fund to disburse 8.5 bln euros to Greece – Statement
• US Senate votes near unanimously for Russia, Iran sanctions
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand Manufacturing PMI 56.8 - previous
• 02:00 China TR IPSOS PCSI 70.40 - previous
• 02:00 Japan TR IPSOS PCSI 43.80 - previous
• 02:00 Australia TR IPSOS PCSI 51.50 - previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan BOJ to announce its rate decision
• --:-- EU Finance ministers meet in Brussels
Currency Summaries
EUR/USD is likely to find support at 1.1100 levels and currently trading at 1.1143 levels. The pair has made session high at 1.1170 and hit lows at 1.1131 levels. The euro declined against the dollar on Thursday for the second consecutive day as the dollar continued its bullish run after solid readings on the U.S. economy helped strengthen the case for the Federal Reserve to continue tightening monetary policy this year. The dollar already was trading higher ahead of the release of U.S. economic data on Thursday in response to the Fed's decision to raise U.S. overnight interest rates by 25 basis points to a target range of 1.00-1.25 percent on Wednesday. The Fed also gave its first clear outline of its plan to reduce its $4.2-trillion portfolio of Treasuries and mortgage-backed bonds. The number of Americans filing unemployment claims fell more than expected last week, suggesting that slack in the labor market was shrinking, and the Philadelphia Fed business conditions index for June beat expectations after a strong reading in May. The Fed has maintained its monetary policy is data dependent, meaning economic reports in line with its outlook are necessary for it to continue raising rates. The dollar index, which tracks the U.S. currency against six major peers, rose to 97.557, its highest since May 30.
GBP/USD is supported in the range of 1.2635 levels and currently trading at 1.2756 levels. It reached session high at 1.2771 and dropped to session low at 1.2720 levels. Sterling strengthened against the dollar on Thursday on signs of a shift in the Bank of England's stance on keeping interest rates at record lows, before giving up its gains on nagging investor caution over the outlook for the UK economy. Two more policymakers at the Bank of England (BoE) joined Kristin Forbes in calling for a reversal to the BoE's interest rate cut last August, sending the pound as high as $1.2795. On the data front, British retail sales fell more sharply than expected in May, data showed on Thursday, the latest sign of the growing hit to the economy from rising inflation since the Brexit vote. Retail sales volumes fell 1.2 percent month-on-month in May, a heavier downturn that the median forecast for a fall of 0.8 percent in a poll of economists. The pound has hovered near the $1.27 mark after a nearly 3 percent fall in the wake of Britain's election last week. Sterling was last trading flat at 1.2754 in late US session after it jumped more than a cent on signs of a shift in the Bank of England's stance on keeping interest rates at record lows.
USD/CAD is supported at 1.3165 levels and is trading at 1.3272 levels. It has made session high at 1.3307 and lows at 1.3259 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as Canadian dollar was pressured by lower oil prices and broader gains for the greenback offsetting stronger-than-expected domestic manufacturing data. Canadian manufacturing sales rose more than expected to a record level in April as sales of petroleum and coal products rebounded after two months of declines, data from Statistics Canada showed. The 1.1 percent advance topped economists' forecast for a gain of 0.7 percent. Prices of oil dropped to six-week lows, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts. On Wednesday, the loonie touched its strongest in 3-1/2 months at C$1.3165. It has gained 1.5 percent this week, helped by signals from the Bank of Canada that higher interest rates lie ahead. Chances of a rate hike this year have surged to more than 90 percent from less than one-in-four before stronger-than-expected jobs data on Friday. The Canadian dollar was last trading at C$1.3261 to the greenback, or 75.33 U.S. cents, down 0.3 percent. The currency traded in a range of C$1.3226 to C$1.3305.
AUD/USD is supported around 0.7538 levels and currently trading at 0.7585 levels. It hit session high at 0.7588 and made session lows at 0.7572 levels. The Australian dollar declined slightly against US dollar on Thursday as Australian dollar was weighed down by lower oil prices and stronger dollar across the board. The dollar rose as solid readings on the U.S. economy helped strengthen the case for the Fed to continue tightening its monetary policy this year. The Australian dollar rose to $0.7605, from $0.7588 early Asian session, after the local jobless rate fell to four-year lows in May at 5.5 percent, versus forecasts of 5.7 percent. Australia's jobless rate fell to four-year lows in May as hiring blew past all expectations for a third straight month, the most emphatic sign yet that the labour market was hitting its stride after an alarmingly long dormant period. Data out on Thursday showed the unemployment rate slipped to 5.5 percent, compared with analysts' expectations for a steady 5.7 percent. That was the lowest reading since February 2013 and down from 5.9 percent just two months ago. The data should offer welcome reassurance for the Reserve Bank of Australia (RBA) which held rates at 1.50 percent for a tenth straight month in June as it balanced weak domestic demand and inflation against escalating household debt.
Equities Recap
European shares fell on Thursday as sagging oil prices hit basic resources stocks, while retailers slipped after H&M missed expectations and UK data showed consumers are feeling the impact of rising inflation.
UK's benchmark FTSE 100 closed down by 0.67 percent, the pan-European FTSEurofirst 300 ended the day down by 0.26 percent, Germany's Dax ended down by 0.86 percent, France’s CAC finished the day down by 0.43 percent.
A recent slump in technology stocks worsened on Thursday, dragging on major U.S. indexes, while investors fretted about the economy's health after the Federal Reserve lifted interest rates.
Dow Jones closed down by 0.09 percent, S&P 500 ended down 0.23 percent, Nasdaq finished the day down by 0.48 percent.
Treasuries Recap
Most U.S. Treasury yields edged higher on Thursday after stronger-than-expected U.S. economic data and as traders weighed hawkish Federal Reserve and Bank of England signals, but remained depressed as they did not fully reverse their biggest plunge in a month Wednesday.
Benchmark 10-year Treasury yields were last at 2.160 percent, from 2.138 percent late Wednesday. Benchmark yields hit 2.103 percent Wednesday, their lowest since Nov. 10.
Commodities Recap
Oil prices settled more than half a percent lower on Thursday after hitting a six-month lows, as high global inventories fed fears that rising crude production in Nigeria, Libya and the United States will feed the global supply glut despite output cuts from OPEC and other producing countries.
Brent crude fell to a session low of $46.70 a barrel, its weakest since May 5 and near six-month lows. It settled down 8 cents at $46.92 a barrel.
U.S. crude settled down 27 cents at $44.46, after touching a six-month low of $44.32 a barrel.
Gold fell to a three-week low on Thursday, weighed down by a stronger dollar as investors began to assess the potential for another U.S. rate hike later in the year, supported by data showing a strong U.S. jobs market.
Spot gold fell 0.5 percent to $1,254.05 an ounce by 2:56 p.m. EDT (1856 GMT), after touching $1,251.18, the weakest since May 24.U.S. gold futures for August delivery settled down 1.7 percent at $1,254.60.
