Market Roundup
• US Initial Jobless Claims w/e 233k, 245k forecast, 248k previous.
• US Jobless Claims 4-Wk Avg w/e 243.75k, 246.00k previous.
• US Continued Jobless Claims w/e 1.977m, 1.950m forecast, 1.949m.
• US Philly Fed Business Index Jul 19.5, 24.0 forecast,27.6 prev (lowest since Nov 2016).
• US Leading Index Change MM Jun 0.6%, 0.4% forecast, 0.2% previous.
• ECB's Draghi delays day of reckoning after market backlash.
• Draghi: Cyclical momentum raises chances of stronger upswing.
• Draghi: Unanimous in setting no precise date for when to discuss QE changes.
• Draghi: Even discussing changing CPI target would be destabilizing.
• Bill Gross warns of recession risk if highly levered economies hike rates.
• BOJ pushes back inflation target for 6th time, keeps policy steady.
• Few compromises at Brexit talks, UK minister says can survive without deal.
• Brazil's inflation falls to lowest in 18 years in mid-July.
• South Africa cuts repo rate, denies political pressure.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e, 839.5b previous
• 23:50 Japan Foreign Invest Stock w/e, -35.0b
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0580 levels and currently trading at 1.0625 levels. The pair has made session high at 1.0653 and hit lows at 1.0536 levels. Euro rose sharply against the dollar on Thursday after European Central Bank left its ultra-easy monetary policy stance unchanged as expected on Thursday, keeping rates at record lows and even leaving the door open to more asset buys if the outlook worsens. Though Draghi said no date had been set for discussing any changes to the program and that ECB rate-setters had been unanimous in their decision not to change their guidance on monetary policy, investors suspected discussions in the autumn would lead to monetary tightening next year. The euro climbed as high as $1.1655 against the greenback after Draghi spoke, putting it up about 1.2 percent on the day and marking its highest level since August 2015. The euro was last on course for its biggest daily percentage gain in more than three weeks. The dollar index, which measures the greenback against a basket of six major rivals, hit a session low of 94.090, marking its lowest level in nearly a year.
GBP/USD is supported in the range of 1.2911 levels and currently trading at 1.2974 levels. It reached session high at 1.2998 and dropped to session low at 1.2932 levels. The British pound dipped against the greenback on Thursday on concerns that UK ministers are prepared to walk away from Brexit talks without a deal. That mood of uncertainty outweighed a slightly better-than-expected batch of retail sales numbers. Retail sales volumes rose by 0.6 percent month-on-month in June after falling 1.1 percent in May, the Office for National Statistics said on Thursday, beating economists' forecasts in a poll for a 0.4 percent rise. The pound slid 0.41 percent as in the late US session, dipping to $1.2971. The pound rose above $1.31 to 10-month highs earlier this week as the dollar fell across the board, and as investors bet the 25-basis-point cut in British interest rates after last year's vote for Brexit could be reversed in the coming months. But BoE policymakers have made it clear that any monetary tightening will be data-dependent, and Tuesday's below-forecast consumer price numbers, therefore, fed doubt that rates could be tightened in the coming months.
USD/CAD is supported at 1.2500 levels and is trading at 1.2568 levels. It has made session high at 1.2623 and lows at 1.2536 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as global oil prices were flat and the greenback turned lower against a basket of major currencies. The U.S. dollar gave up earlier gains after a regional gauge of business conditions fell to an eight-month low and as comments by European Central Bank President Mario Draghi boosted the euro. Oil prices dipped in choppy U.S. trading, as nagging worries about abundant global crude supplies dragged prices lower. An early rally had pushed Brent above $50 per barrel for the first time since early June. On Wednesday, the loonie touched its strongest since early May 2016 at C$1.2578. Recent strength for the currency has come after the Bank of Canada turned hawkish in June. The central bank raised interest rates last week for the first time since 2010 and signaled it would hike again over the coming months. The Canadian dollar was trading at C$1.2613 to the greenback, or 79.28 U.S. cents, down 0.1 percent. The currency traded in a range of C$1.2595 to C$1.2640.on the data front, retail sales data for May and the June inflation report are due out on Friday.
AUD/USD is supported around 0.7895 levels and currently trading at 0.7955 levels. It hit session high at 0.7970 and made session lows at 0.7916 levels. The Australian dollar hit two-year high on Thursday as Australian dollar was boosted by a weaker dollar and upbeat domestic data. The Australia Bureau of Statistics (ABS) said the unemployment rate held steady at 5.6 percent as 14,000 new jobs were added. Full-time jobs have risen by 115,400 in the past two months, the strongest back-to-back increase in 29 years, and a dramatic turnaround on 2016 when they fell by 23,100.That led some to wager that rate hikes would begin by early 2018. The Reserve Bank of Australia (RBA) has left rates at 1.50 percent since last August. The Australian dollar rose as high as $0.7992, a level last reached in May 2015, but was rebuffed by stiff chart resistance at 80 U.S. cents. It was last trading at $0.7954, up a hefty 1.4 percent for the week. The Aussie has been rising since the beginning of the month aided by strong domestic economic data and a faltering U.S. dollar.
Equities Recap
European shares dropped on Thursday as a jump in the bloc's currency following the European Central Bank's policy meeting weighed on exporters, while disappointing updates prompted big moves on individual stocks.
UK's benchmark FTSE 100 closed up by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.37 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.4 percent.
Stocks ended little changed on Wall Street on Thursday as a deal between Sears and Amazon weighed on home improvement retailers while gains in Regeneron and Microsoft buoyed the Nasdaq.
Dow Jones closed down by 0.10 percent, S&P 500 ended up 0.01 percent, Nasdaq finished the day up by 0.09 percent.
Treasuries Recap
U.S. government debt yields were little changed on Thursday as buying tied to the European Central Bank's pledge of easy money stemming from inflation concerns faded after a poor auction of 10-year Treasury Inflation-Protected Securities.
In late trading, the benchmark 10-year Treasury yield was down 0.2 basis point at 2.266 percent. It touched a three-week low of 2.243 percent, breaking below its 50-day moving average.
Commodities Recap
Oil settled lower on Thursday in choppy trading, as nagging worries about abundant global crude supplies sank prices after an early rally boosted Brent above $50 per barrel for the first time since June 7.
Brent futures settled at $49.30 a barrel, down 40 cents, or 0.8 percent. U.S. West Texas Intermediate crude futures fell 33 cents to $46.79 a barrel.
Gold prices rose to a three-week high on Thursday after European Central Bank President Mario Draghi said ECB policymakers would discuss potential changes to the bank's bond-buying scheme in the autumn, lifting the euro to a 14-month high.
Spot gold was up 0.4 percent at $1,244.92 an ounce by 2:17 p.m. EDT (1817 GMT), after rising to $1,247.48, the highest since June 30.U.S. gold futures for August delivery settled up 0.3 percent at $1,245.50.
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