Market Roundup
• US weekly jobless claims 234k v 250k forecast, 259k previous; largest drop in almost 2-yrs.
• US continuing claims 2.028m v 2.04m forecast, 2.052m previous; jobless claims 4-wk Avg 250k v 254.5k previous.
• Fed’s Williams: expects a total of 3, possibly 4 hikes this year, makes sense to start reducing balance sheet towards the end of year.
• ECB Minutes: Draghi sees no need to deviate from guidance, very substantial accommodation still needed, normalization talk would be warranted if recovery proceeds & inflation converged within target.
• ECB’s Constancio: Wide consensus around ECB monetary policies, nuances are not about the direction of policy.
• Buba’s Weidmann: legitimate to discuss the end to easy money.
• ECB calls for tougher regulation of foreign bank branches; Large U.S., Asian banks to be hit the hardest.
• Fitch may be next to slap South Africa with "junk" rating.
• Trump administration discussing military options on Syria –source.
Looking Ahead - Economic Data (GMT)
• 23:30 Australia AIG Construction Index Mar 53.10-previous
• 23:50 Japan Foreign Reserves Mar 1232.30b- previous
• 00:00 Japan Overtime Pay Feb 0.20%- previous
• 05:00 Japan Coincident Indicator MM* Feb -0.70- previous
• 05:00 Japan Leading Indicator* Feb 0.6- previous
• 08:00 China FX Reserves (Monthly)* Mar forecast 3.010t, 3.005t – previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0600 levels and currently trading at 1.0645 levels. The pair has made session high at 1.0664 and hit lows at 1.0627 levels. The euro declined against dollar on Thursday as the dollar was slightly higher as investors were hesitant to make big bets ahead of a two-day summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping, a meeting that could have geopolitical ramifications. Trump faces pressure to deliver trade concessions with China for some of his most fervent supporters and to prevent a crisis with North Korea from spiraling out of control. However, White House officials have set expectations low for the meeting. The euro, dipped to trade at $1.0646, slightly above three-week low hit $1.0626 after European Central Bank President Mario Draghi's comments saying he saw no need, for now, to deviate from the ECB's policy path. The currency has been trapped in a range of around $1.0680-$1.0491 since early March, with unease over the European and U.S. political outlook has limited demand for single currency.
GBP/USD is supported in the range of 1.2417 levels and currently trading at 1.2474 levels. It reached session high at 1.2503 and dropped to session low at 1.2443 levels. British pound declined against the dollar on Thursday after hitting a daily high at 1.2503 as sterling was dragged down as investors worried about the uncertainty surrounding Britain's departure from the European Union. The pound bounced on Wednesday on stronger-than-expected services data, which gave investors a sign Britain's dominant services sector key to its economy was still thriving. But it reversed some of those gains on Thursday, as investors took the view that until either Britain or the EU shows signs of softening their negotiating stances, Brexit would be negative for the British economy. Sterling was off 0.1 percent at $1.2470 by 0902 GMT. It was also 0.1 percent lower at 85.85 pence per euro. Sterling has lost nearly a fifth of its value against the dollar since Britain voted to leave the EU last June. Since then, investors have broadly stayed bearish on the currency despite initial signs of resilience from the economy that confounded expectations of a slowdown, worried about the long-term uncertainty surrounding Brexit.
USD/CAD is supported at 1.3371 levels and is trading at 1.3413 levels. It has made session high at 1.3436 and lows at 1.3395 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as prices of oil climbed and uncertainty before the first meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping supported the loonie. Traders also digested minutes from the Federal Reserve's March meeting released Wednesday afternoon, which showed most Fed policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up. Oil prices rose nearly 1 percent, on track for a fourth straight day of gains, but analysts warned record high U.S. inventories could derail the rally. The gains put crude on track for its best close since a March 8 rout when investors bailed out of bullish positions due to concerns about supply. Crude prices have been rebounding in the last two weeks from that decline. Refinery runs are starting to increase as the U.S. summer driving season approaches and gasoline inventories have been declining. The Canadian dollar was last trading at C$1.3416 to the greenback slightly stronger than Wednesday's close of C$1.3424.
AUD/USD is supported around 0.7531 levels and currently trading at 0.7540 levels. It hit session high at 0.7566 and made session lows at 0.7537 levels. The Australian dollar declined against US dollar on Thursday as Australian dollar was dragged down following weaker-than-expected service sector activity in China, Australia’s No.1 trading partner, and jitters ahead of a meeting between the president of the United States and his Chinese counterpart. The Australian dollar, a liquid proxy for yuan, slipped 0.4 percent to $0.7533, its lowest since March 13. The Aussie has fallen in seven out of the last ten sessions and was on track for its worst weekly performance since late December. The latest U.S. Federal Reserve minutes, released on Wednesday, also added to investor caution on the dollar, since they didn't really change the view of a slow pace of U.S. interest rate rises this year. The dollar index was up 0.1 percent at 100.64.The greenback also rose 0.1 percent versus the yen at 110.83.
Equities Recap
European shares ended slightly higher on Thursday, with banks seeing a volatile session as dovish comments from ECB chief Mario Draghi triggered talk over the outlook for monetary policy in the region.
UK's benchmark FTSE 100 closed down by 0.3 percent, the pan-European FTSEurofirst 300 ended the day up by 0.20 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.7 percent.
Wall Street's major indexes ended slightly higher but well off session highs as investors grew nervous about a meeting between China's President Xi Jinping and U.S. President Donald Trump.
Dow Jones closed up by 0.08 percent, S&P 500 ended up 0.20 percent, Nasdaq finished the day up by 0.25 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Thursday amid uncertainty ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, and over the fate of Trump's pro-growth agenda.
Benchmark 10-year Treasury notes were last up 1/32 in price to yield 2.353 percent, from a yield of 2.357 percent late Wednesday. U.S. 30-year Treasury bonds were last down 3/32 in price to yield 3.009 percent, from a yield of 3.005 percent late Wednesday.
Commodities Recap
Gold edged lower on Thursday, pressured by a firmer dollar on the back of upbeat U.S. unemployment data and as some investors sold to redeem profits after bullion's recent advance.
Spot gold was down 0.24 percent at $1,251.76 ounce by 2:42 p.m. EDT (1836 GMT), retreating from an overnight peak of $1,258.96.
The most-active U.S. gold futures for June delivery settled up $4.8, or 0.38 percent, at $1,253.30 per ounce after climbing as much as 1 percent to $1,260.90.
Oil prices rose more than 1 percent on Thursday, on track for a fourth straight day of gains, but analysts remained cautious about record-high U.S. crude inventories.
Brent crude futures gained 61 cents, or 1.1 percent, to $54.97 a barrel by 2:21 p.m. EDT (1921 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 1.3 percent, or 66 cents a barrel to $51.81.
