Market Roundup
• US Initial Jobless Claims w/e 241k vs 240k forecast, 238k previous.
• US Jobless Claims 4-wk Avg 244.75k, 243.25k previous.
• US Continued Jobless Claims w/e 1.944m vs 1.928m forecast, 1.936m previous.
• US Monthly Home Price MM, Apr 0.7%, 0.7% previous.
• US Monthly Home Price YY, Apr 6.8%, 6.2% previous.
• US KC Fed Composite Index Jun 11, 8 previous.
• Senate Republican healthcare bill would cut medicaid funding deeper than house bill.
• McConnell: Healthcare bill repeals taxes, expands healthcare savings accounts.
• US trade representative: NAFTA renegotiation could be a good time to discuss currencies.
• BoE’s Forbes: Sterling has long-term impact on CPI, depreciation since late 2015 points to need for rate rise.
• Forbes: UK economy "solid enough" for rate hike on key criteria, "overstimulated" on others.
• Nomura analysts predict Bank of England will raise rates in August.
• Euro-Zone consumer confidence rose to -1.3 points from -3.3 points in May, highest since April 2001.
• SNB's Maechler: Swiss Franc is still highly overvalued.
• Mexico central bank says hiked rate to strengthen anchoring of inflation expectation.
Looking Ahead - Economic Data (GMT)
• 00:30 Japan Nikkei Mfg PMI Jun 53.1 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1114 levels and currently trading at 1.1145 levels. The pair has made session high at 1.1164 and hit lows at 1.1138 levels. The euro dipped against the dollar on Thursday as recovery in oil prices from multi-month lows and in-line data on US jobless claims and home prices pressured euro. The number of Americans filing for unemployment benefits increased slightly last week, but remains at levels consistent with a tight labor market. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 241,000 for the week ended June 17, the Labor Department said on Thursday. Meanwhile, U.S. home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high. The dollar had strengthened as several Fed officials since last week have supported the notion of possibly another rate increase by year-end despite a recent softening of inflation. The bounce faded as doubts crept in as to whether the modest current economic expansion warrants further rate increases. With no major economic data on Friday, investors are focused on Fed speakers. Federal Reserve Board Governor Jerome Powell, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester are all due to speak on Friday.
GBP/USD is supported in the range of 1.2600 levels and currently trading at 1.2671 levels. It reached session high at 1.2677 and dropped to session low at 1.2653 levels. Sterling declined against dollar on Thursday as investors were cautious after a difference of opinion at the Bank of England over monetary policy added further uncertainty to the outlook for Britain's economy as it leaves the European Union. Barely a week after three members of the central bank's eight-strong rate-setting committee voted to hike record-low interest rates, two of the Bank's top officials gave opposing signals on the Bank's stance towards interest rates. Governor Mark Carney in a speech on Tuesday said it was not the right time to raise interest rates, while the Bank's chief economist Andy Haldane separately said he expected to vote for a rate rise later this year. Sterling weakened almost 1 percent after Carney's comments, but was bumped higher after Haldane spoke on Wednesday, recovering to as much as $1.2704. It traded 0.1 percent lower on the day at $1.2667 and 88.16 pence per euro on Thursday. Investors were also following political developments, with Prime Minister Theresa May's due to present to EU leaders her approach to giving guarantees to EU citizens over their rights in Britain.
USD/CAD is supported at 1.3207 levels and is trading at 1.3237 levels. It has made session high at 1.3262 and lows at 1.3206 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as higher oil prices and stronger-than-expected Canadian retail sales data boosted Canadian dollar across the board. Canadian retail sales rose 0.8 percent in April from March to C$48.64 billion. Analysts had forecast an increase of 0.2 percent. The Bank of Canada's top two officials said last week that looser monetary policies put in place in 2015 had largely done their work, and the bank would assess whether interest rates must remain at near-record lows. Chances of a rate hike as early as next month rose to 38 percent from less than one-in-four before the retail sales report, data from the overnight index swaps market showed. Traders have already priced in a rate hike for 2017. Oil, one of Canada's major exports, edged up from multi-month lows, but prices remained under pressure from a supply glut that has persisted despite the Organization of the Petroleum Exporting Countries' efforts to balance the market. The Canadian dollar last was up 0.6 percent at C$1.3260 to the greenback or 75.41 U.S.
NZD/USD is supported around 0.7197 levels and currently trading at 0.7264 levels. It hit session high at 0.7272 and made session lows at 0.7252 levels. The New Zealand dollar strengthened against the greenback on Thursday as New Zealand dollar was boosted after the central bank held official cash rates at record lows but sounded less dovish than bears in the market had wagered on. Some had expected the Reserve Bank of New Zealand (RBNZ) to do more to talk down a resurgent kiwi which had gained 3 percent since May. But it only said a lower exchange rate "would help rebalance the growth outlook." The central bank reiterated its policy would be accommodative for a "considerable period," after the economy grew a disappointing 0.5 percent in the first quarter. The New Zealand dollar jumped to $0.7280 immediately after the statement, but was still far from a four-week peak of $0.7320 touched last week. It was last up 0.4 percent at $0.7258.New Zealand's economy has been among the best-performing advanced economies in recent years.
Equities Recap
A rise in European health stocks helped pull European shares out of negative territory on Thursday, pegged back by the slide in the energy sector on the back of weakened oil prices.
UK's benchmark FTSE 100 closed down by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.06 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.2 percent.
Wall Street's major indexes ended little changed on Thursday as gains in healthcare stocks after Senate Republicans unveiled their proposal to replace Obamacare were offset by declines in financial and consumer staples sectors.
Dow Jones closed down by 0.05 percent, S&P 500 ended down 0.04 percent, Nasdaq finished the day up by 0.05 percent.
Treasuries Recap
U.S. Treasury prices were stable to slightly lower on Thursday while the yield curve was slightly steeper, suggesting the flattening of the yield curve this week was stalling on a rise in oil prices.
The yield curve between five-year notes and 30-year bonds briefly flattened to 94.9 basis points, the narrowest since December 2007, as 30-year Treasury yields hit more than a seven-month low of 2.713 percent.
Commodities Recap
Gold rose on Thursday, rising quietly above the prior session's five-week low as the dollar steadied and the 200-day moving average provided short-term support below the market.
Spot gold was up 0.3 percent at $1,249.17 an ounce by 3:04 p.m EDT (1904 GMT). It had added 0.3 percent in the previous session after touching a five-week low of $1,240.75.U.S. gold futures for August delivery settled up 0.3 percent at $1,249.40.
Oil rose on Thursday, a day after hitting 10-month lows, but market sentiment remained negative because the global crude glut has persisted despite OPEC-led output cuts.
Brent crude futures ended 40 cents higher to $45.22 a barrel, after falling as low as $44.53. Brent fell 2.6 percent the previous session to $44.35, lowest since November.
U.S. crude futures ended up 21 cents a barrel at $42.74 a barrel. On Wednesday, they hit a low of $42.05, their lowest intraday level since August 2016.
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