Market Roundup
• US 27 Oct w/e Initial Jobless Claims, 214k, 213k forecast, 215k previous, 216k revised.
• US 20 Oct w/e Continued Jobless Claims, 1.631M, 1.640M forecast, 1.636M previous, 1.638M revised.
• US Sep Construction Spending, 0.0%, 0.1% forecast, 0.1% previous, 0.8% revised.
• US Oct ISM Mfg PMI, 57.7, 59.0 forecast, 59.8 previous.
• US Oct ISM Mfg Prices Paid, 71.6, 65.0 forecast, 66.9 previous.
• US Oct ISM Mfg Employment Index, 56.8, 57.5 forecast, 58.8 previous.
• US Q3 Productivity Prelim, 2.2%, 2.2% office 9% previous, 3.0% revised.
• US Q3 Labor Cost Prelim, 1.2%, 1.0% forecast, -1.0% previous.
• US Oct Markit Mfg PMI Final, 55.7, 55.9 previous.
• Trump, Xi upbeat on U.S.-China trade disputes ahead of meeting.
• Bank of England hints at faster hikes, but says Brexit options wide open.
• UK and EU make progress on Brexit deal on financial services - UK official.
• Atlanta Fed raises U.S. Q4 GDP growth view to 3.0 pct.
• CA Oct Markit Mfg PMI SA, 53.9, 54.8 previous.
Looking Ahead - Economic Data (GMT)
• 2 Nov 00:30 Australia Sep Retail Sales m/m, 0.3% forecast, 0.3% previous
• 2 Nov 00:30 Australia Q3 Retail Trade, 0.4% forecast, 1.2% previous
• 2 Nov 00:30 Australia Q3 PPI q/q, 0.3% previous
• 2 Nov 00:30 Australia Q3 PPI y/y, 1.5% previous
Looking Ahead - Events, Other Releases (GMT)
• NA - Central bank chiefs and officials from Europe discuss monetary policy and bank supervision at International Economic History Conference in Athens (to Nov. 3)
• 08:30 Swedish Central Bank publishes minutes from the Monetary Policy meeting
• 13:00 The New York Fed hosts a public Town Hall meeting related to the Federal Reserve System's Strategies for Improving the U.S. Payment System (SIPS) initiative in New York
Currency Summaries
EUR/USD is likely to find support at 1.1334 levels and currently trading at 1.1407 levels. The pair has made session high at 1.1423 and hit lows at 1.1366 levels. The euro rebounded from 2-1/2 month lows against US dollar on Thursday as euro was boosted as currencies hit hard by recent dollar buying roared higher, with the mood for risk-taking starting the month on a much more positive footing. Analysts said a flood of end-of-month buying of dollars on Wednesday had ceased with the start of November. That, combined with hopes that China would ramp up fiscal stimulus, boosted the euro and led to substantial moves higher in the Australian and New Zealand dollars, the Norwegian and Swedish crowns and a clutch of emerging market currencies. Despite the dollar's slide, some analysts were cautious about further falls given the headwinds for the global economy.Friday's U.S. employment data could also reinforce the view that the U.S. economy is outperforming rivals, sending money back into the buck.The euro rose to as high as $1.1407 , away from recent lows of $1.1302 that had followed weak euro zone data and worries about the Italian budget.The dollar index , which measures the greenback's value versus six major peers, moved lower by 0.5 percent to 96.642, easing from a 16-month high of 97.2 hit on Wednesday.
GBP/USD is supported in the range of 1.2830 levels and currently trading at 1.3014 levels. It reached session high at 1.3031 and dropped to session low at 1.2900 levels. Sterling rose against the dollar on Thursday following reports that London is close to sealing a financial services deal with Brussels, and as the Bank of England kept interest rates steady but hinted future interest rate rises would be slightly faster if Brexit goes smoothly. A British official said London was close to agreeing on a deal giving UK-based financial services firms basic access to European Union markets. The British government and EU officials later played down the chance of an imminent deal. Sterling added to gains following a Financial Times report that the European Union is weighing a compromise on a plan for Northern Ireland that would give Britain stronger guarantees that a customs border would not be needed along the Irish Sea. Sterling was 1.97 percent higher on the day, its best day since April, 18, 2017. The euro was up 0.87 percent. More broadly, the dollar index , a gauge of the greenback's value versus six major peers, fell 0.88 percent to 96.27, its lowest in more than a week.
USD/CAD is supported at 1.3011 levels and is trading at 1.3087 levels. It has made session high at 1.3114 and lows at 1.3066 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday, rebounding from a seven-week low the day before, as investors began the new month with more appetite for risk and the greenback broadly declined. After a brutal October for stocks, risk sentiment globally was boosted by a string of robust earnings reports and Chinese stimulus plans. Canada runs a current account deficit and exports many commodities, so its economy could benefit from improved prospects for the flow of trade or capital. The loonie will rally over coming months on a recovery in demand for riskier assets and as a solid domestic economy supports more interest rate hikes from a hawkish central bank, according to a poll. On Wednesday, Bank of Canada Governor Stephen Poloz repeated his message that interest rates would need to keep rising to meet the central bank's inflation target. The Canadian dollar was last trading 0.6 percent higher at 1.3081 to the greenback. The currency, which touched its weakest in more than seven weeks on Wednesday at 1.3170, traded in a range of 1.3071 to 1.3167.
AUD/USD is supported around 0.7120 levels and currently trading at 0.7206 levels. It hit session high at 0.7209 and made session lows at 0.7177 levels. The Australian dollar jumped higher against dollar on Thursday after the country's trade surplus swelled to a near two-year peak in September helped by a bumper run in resource exports, while the New Zealand dollar was also buoyant. Data from the Australian Bureau of Statistics (ABS) showed the country's trade surplus climbed to A$3.02 billion when analysts had looked for A$1.7 billion. That took the third-quarter surplus to A$6.4 billion, almost three times the size of the second quarter's A$2.2 billion. Separate data showed export prices for the third-quarter ended September sprang 3.7 percent while import values climbed 1.9 percent.The strong numbers sent the Aussie to the day's high of $0.7209, recovering all of the losses from the previous session. Australia's A$1.8 trillion economy has expanded for 27 years without a recession while the labour market is booming and the drag from the end of a once-in-a-generation mining investment boom is drawing to a close. Still, there are no signs of inflation in the economy. And that has forced the Reserve Bank of Australia (RBA) to hold rates at a record low 1.50 percent for more than two years now.
Equities Recap
European shares hit a two-week high on Thursday as strong results from Dutch bank ING and UK telecoms group BT helped offset a disappointing update from Credit Suisse, and ASM International brought some cheer to chipmakers.
UK's benchmark FTSE 100 closed down 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.08 percent, Germany's Dax ended down by 0.1 percent, France’s CAC finished the day down by 0.4 percent.
U.S. stocks rose for a third straight session on Thursday as President Donald Trump said trade talks with China were "moving along nicely," reviving hopes that the two countries can resolve their trade dispute.
Dow Jones closed up by 1.07 percent, S&P 500 ended up by 1.06 percent, Nasdaq finished the day down by 1.77 percent.
Treasuries Recap
Reports of a slowdown in U.S. manufacturing, construction and productivity left yields lower ahead of Friday's monthly jobs report which will inform the Federal Reserve's decision on whether to raise interest rates in December.
Yields across maturities were down around 2 basis points, with the yield on the 10-year benchmark note last down 1.9 basis points at 3.138 percent.
Commodities Recap
Oil fell nearly 3 percent on Thursday, with U.S. crude futures hitting lows not seen since April, due to growing concerns that global demand is weakening at a time when output from the world's major oil producers is surging.
Brent crude futures settled down $2.15, or 2.9 percent, at $72.89 a barrel, while U.S. crude lost $1.62, or 2.5 percent, at $63.69, its lowest close since April 9.
Gold rose nearly 2 percent on Thursday, bouncing off a three-week low touched in the previous session as the dollar fell sharply from recent highs, making the metal cheaper for holders of other currencies.
Spot gold gained 1.7 percent at $1,234.18 per ounce by 14:02 p.m EDT (1802 GMT) after rising as much as 1.9 percent to its highest since Oct. 26 at $1,237.39. U.S. gold futures settled up $23.60, or 1.94 percent, at $1,238.60.
