Market Roundup
• ECB pushes out rate hike, offers cheap cash to banks
• ECB governing council now expects key ECB rates to remain at their present levels through the end of 2019, and as long as necessary
• Fed's Brainard sees fewer U.S. rate hikes
• US 2 Mar, w/e Initial Jobless Claims, 223k, 225k forecast, 225k prev, 226k revised
• US 2 Mar, w/e Jobless Claims 4-Wk Avg, 226.25k, 229.00k prev, 229.25k revised
• US 23 Feb, w/e Continued Jobless Claims, 1.755 mln, 1.775 mln revised, 1.805 mln previous
• U.S. productivity rises more than expected in fourth quarter
• CA Jan Building Permits MM, -5.5%, -5.0% forecast, 6.0% prev, 6.4% revised
• Bank of Canada sees longer 'detour' for economy, growth up later in year
• Britain still hopeful of weekend Brexit breakthrough, says Hunt
• EU trade chief says no support in Europe for comprehensive US trade deal
Looking Ahead - Economic Data (GMT)
• 7 Mar 21:45 Australia Q4 Manufacturing Sales, -1.6% previous
• 7 Mar 23:30 Japan Jan All Household Spending YY, -0.4% revised, 0.1% previous
• 7 Mar 23:50 Japan Jan Current Account NSA JPY, 179.3 bln forecast, 452.8 bln previous
• 7 Mar 23:50 Japan Q4 GDP Rev QQ Annualised, 1.8% forecast, 1.4% previous
• 7 Mar 23:50 Japan Q4 GDP Revised QQ, 0.4% f forecast, 0.3% previous
• 8 Mar N/A China Feb Exports YY, -4.8% forecast, 9.1% previous
• 8 Mar N/A China Feb Imports YY, -1.4% forecast, -1.5% previous
• 8 Mar N/A China Feb Trade Balance USD, 26.38 bln f'cast, 39.16 bln previous
Looking Ahead - Events, Other Releases (GMT)
• 02:00 Federal Reserve Chairman Jerome Powell speaks before the 2019 SIEPR Economic Summit dinner in Stanford
• 08:00 ECB policymaker Ewald Nowotny speaks at a conference in Prague in Prague
• 13:30 Deputy Governor of Irish Central Bank Donnery speaks in Dublin
• 16:30 European Central Bank board member Yves Mersch speaks at Let's Talk Europe, a conference organised by the European Commission representation in Luxembourg
Currency Summaries
EUR/USD: The euro slipped sharply lower against the U.S. dollar on Thursday, after the European Central Bank postponed the timing of its first post-crisis rate hike to 2020 at the earliest and launched a new round of cheap loans to banks. The ECB's decision to tweak its forward guidance on rates was a surprise for many investors. The central bank also cut its growth and inflation forecasts through 2021. The euro was down 1.09 percent at $1.1183. An index that tracks the dollar versus a basket of six major currencies was up 0.82 at 97.66. Immediate resistance can be seen at 1.1221 (38.2% retracement level), an upside break can trigger rise towards 1.1263 (50% retracement level).On the downside, immediate support is seen at 1.1174 (23.6% retracement level), a break below could take the pair towards 1.1100 (Psychological Level).
GBP/USD: British pound declined against the dollar on Thursday, after British and European Union sources said Brexit negotiations had hit an impasse. EU Brexit negotiators rejected the latest proposals on the Irish backstop presented by Britain's Attorney General Geoffrey Cox in Brussels on Tuesday and told him to rework them and come back on Friday. The pound fell to $1.3075, down 0.73 percent, marking its biggest one-day drop against the greenback since Jan. 18. It touched $1.3067, the lowest level since Feb. 25.Immediate resistance can be seen at 1.2690 (10 DMA), an upside break can trigger rise towards 1.2759 (Dec 10th High).On the downside, immediate support is seen at 1.3064 (38.2% retracement level), a break below could take the pair towards 1.2999 (23.6% retracement level).
USD/CAD: The Canadian dollar weakened to hit two months low against the greenback on Thursday, as dovish comments from deputy governor of the Bank of Canada weighed on Canadian dollar. The Canadian economy is in for a longer-than-expected "detour" as consumer spending, business investment and the energy sector weigh, but economic growth is set to pick up later in 2019, Bank of Canada Deputy Governor Lynn Patterson said on Thursday . The Canadian dollar was trading 0.13 percent lower at 1.3459 to the greenback, or 74.32 U.S. cents. Immediate resistance can be seen at 1.3456 (23.6% retracement level), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3370 (5 DMA), a break below could take the pair towards 1.3281 (9 DMA).
USD/JPY: The U.S. dollar dipped against the yen on Thursday, as heightened anxiety over a global economic slowdown and U.S.-China trade negotiations increased appetite for safe haven Japanese yen. The global growth worries overshadowed generally solid economic data on the U.S. labor market and worker productivity. Investors awaited U.S. non-farm payrolls report on Friday, which could provide further signals on the strength of the economy and how it would affect the Federal Reserve's monetary policy. The dollar was 0.14 lower versus the Japanese yen at 111.63. Strong resistance can be seen at 112.00(38.2% retracement level), an upside break can trigger rise towards 112.63 (23.6% retracement level).On the downside, immediate support is seen at 111.40 (9 DMA), a break below could take the pair towards 110.88 (21 DMA).
Equities Recap
European shares fell from five-month highs on Thursday after the European Central Bank changed its interest rate guidance and announced a new round of cheap bank loans sooner than expected, though with tougher terms than previous rounds.
UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.43 percent, Germany's Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.4 percent.
Wall Street's main indexes headed toward a fourth consecutive session of declines on Thursday, after Europe's central bank said it would defer interest rate hikes and offered banks a new round of cheap loans, raising fresh concerns about global economic growth.
Dow Jones closed down by 0.80 percent, S&P 500 ended down 0.81 percent, Nasdaq finished the day down by 1.13 percent.
Treasuries Recap
Ahead of Friday's U.S. employment report Treasury yields were lower, propelled by the European Central Bank's decision to delay its first post-crisis interest-rate hike until 2020 and offered banks a fresh round of loans to prevent a credit crunch that could worsen the European Union's economic slowdown.
Treasury yields followed suit, with the 10-year benchmark note down 3.3 basis points at 2.659 percent.
Commodities Recap
Gold edged lower on Thursday, holding near a multi-week low as the dollar gained against the euro after the European Central Bank postponed an interest rate hike, but the bank's gloomy economic outlook limited the metal's fall.
Spot gold was down 0.1 percent at $1,285.61 per ounce as of 2:00 p.m. EST (1900 GMT). It hit $1,280.70 on Tuesday, the lowest since Jan. 25.U.S. gold futures settled down 0.1 percent at $1,286.1 per ounce.
Oil prices edged higher on Wednesday, supported by OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran, but gains were capped by falling stock markets and renewed concerns over demand growth.
Brent crude futures gained 31 cents, or 0.47 percent, to settle at $66.30 a barrel.U.S. West Texas Intermediate (WTI) crude futures rose 44 cents, or 0.78 percent, to settle at $56.66 a barrel.
