Market Roundup
• US w/e Initial Jobless Claims, 236k, 240k forecast, 238k previous.
• US w/e Jobless Claims 4-Wk Avg, 241.50k, 242.25k previous.
• US w/e Continued Jobless Claims, 1.908 mln, 1.908 mln forecast, 1.957 mln previous 1.960 mln revised.
• US Nov Challenger Layoffs, 35.038k, 29.831k previous.
• Bitcoin surges above $15,000 after climbing $2,000 in 12 hours.
• Hamas calls for Palestinian uprising over Trump's Jerusalem plan.
• Trump and Democrats face off over potential U.S. government shutdown.
• North Korea says U.S. threats make war unavoidable as China urges calm.
• German SPD backs talks with Merkel after impassioned Europe speech.
• A decade in the making: post-crisis banking rules finally signed.
• EU's Tusk to make Brexit statement early Friday.
• Canada Oct Building Permits MM., 3.5%, 1.5% forecast, 3.8% previous 4.9% previous.
• Canada Nov Ivey PMI, 62.4, 63.5 previous.
• Canada Nov Ivey PMI SA, 63.0, 63.8 previous.
Looking Ahead - Economic Data (GMT)
• 7 Dec 21:45 New Zealand Q3 Manufacturing Sales, 1.0% previous
• 7 Dec 23:50 Japan Nov Bank Lending YY, 2.8% previous
• 7 Dec 23:50 Japan Oct Current Account NSA JPY, 1,720.5 bln forecast, 2,271.2 bln
• 7 Dec 23:50 Japan Q3 GDP Rev QQ Annualised, 1.5% forecast, 1.4% previous
• 7 Dec 23:50 Japan Q3 GDP Revised QQ, 0.4% forecast, 0.3% previous
• 7 Dec 23:50 Japan Q3 GDP Cap Ex Rev QQ, 0.4% forecast 0.2% previous
• 7 Dec 23:50 Japan Q3 GDP QQ Pvt Consmp Revised, -0.5% previous
• 7 Dec 23:50 Japan Q3 GDP QQ External Demand R, 0.5% previous
• 8 Dec 00:00 Japan Oct Overtime Pay, 0.9% previous
• 8 Dec 00:30 Australia Oct Housing Finance, -2.5% forecast, -2.3% previous
• 8 Dec 00:30 Australia Oct Invest Housing Finance, -6.2% previous
Currency Summaries
EUR/USD is likely to find support at 1.1740 levels and currently trading at 1.1777 levels. The pair has made session high at 1.1814 and hit lows at 1.1773 levels. The euro declined against the U.S. dollar on Thursday as demand for greenback increased across the board on optimism that the United States will successfully push through a tax reform program. A U.S. tax bill moving swiftly through Congress has influenced markets in the past month, with investors hoping that deep cuts to corporate tax rates will help further drive the record-setting run in equities. U.S. Senate Republicans agreed to talks with the House of Representatives on sweeping tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline. Financial markets will watch U.S. non-farm payrolls data Friday, a key barometer of the U.S. economy. Next week the U.S. Federal Reserve is expected to announce a rise in interest rates and offer guidance on the pace of further increases. The dollar index rose 0.24 percent to $93.74 after rising as high as $93.80, with the euro down 0.19 percent to $1.1773.
GBP/USD is supported in the range of 1.3355 levels and currently trading at 1.3466 levels. It reached session high at 1.3376 and dropped to session low at 1.3011 levels. British pound initially declined against the dollar on Thursday but rebounded strongly from the day’s lows as investors doubted whether British officials will be able to break through a deadlock before a crucial EU summit next week. The pound edged a quarter of a percent higher to $1.3464 but not far from a Nov. 29 low of $1.3358 hit the previous session. Britain wants to agree with the EU on Dec. 14 to move the Brexit talks to the next phase focusing on trade and a two-year transition deal to smooth its departure in March 2019.But the timetable has been thrown into doubt after discussions broke down in Brussels on Monday over the future situation on Northern Ireland's border with Ireland. Talks between Democratic Unionist Party and the British government to secure a deal on the post-Brexit future of the region's border continued on Thursday, a spokesman for the Northern Ireland party said on Thursday. Though British pound has weakened 1.4 percent since hitting a two-month high of $1.355 last Friday, investors have generally sat on their hands due to the uncertainty over the Brexit negotiations.
USD/CAD is supported at 1.2800 levels and is trading at 1.2859 levels. It has made session high at 1.3867 and lows at 1.2811 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday, adding to losses from the day before, when the Bank of Canada held interest rates steady and tempered expectations for a hike early next year. The central bank struck a more dovish tone than investors had expected after very strong employment data on Friday. Still, the Canadian dollar is likely to strengthen over the coming year, a poll showed, on assumptions that uncertainty over trade lifts and a stronger economy boosting inflation will prompt the Bank of Canada to resume raising rates. The U.S. dollar reached a two-week high against a basket of currencies on optimism that the United States will push through a tax overhaul. On the data front, the value of Canadian building permits increased 3.5 percent in October from September, more than economists had expected, on increased plans for commercial and residential construction. The Canadian dollar was trading down 0.5 percent at C$1.2847 to the greenback, or 77.84 U.S. cents. The currency, which touched its weakest since Friday at C$1.2860, lost ground despite firm domestic data and a higher price of oil, one of Canada's major exports.
USD/JPY is supported around 112.35 levels and currently trading at 113.12 levels. It peaked to hit session high at 113.14 and made session lows at 112.54 levels. The U.S. dollar rose against the Japanese yen on Thursday as risk appetite returned and investors braced for developments with U.S. policy and for a key U.S. jobs report due on Friday. The greenback slipped against the safe-haven yen on Wednesday after U.S. President Donald Trump said he would recognize Jerusalem as the capital of Israel, a move that imperiled Middle East peace efforts and provoked widespread condemnation. But as global stock prices edged higher on Thursday after three days of losses, investors bought back the dollar, which gained 0.4 percent on the day at 112.72 yen. Markets are now focused on Friday's U.S. non-farm payrolls report, with investors looking at 200,000 new jobs for November. Investors also are looking toward the conclusion of the Federal Reserve's policy meeting next week. An increase of U.S. overnight interest rates to 1.25 - 1.50 percent is already priced into Treasuries, analysts say, with Fed funds futures showing that 100 percent of the market expects a rate hike.
Equities Recap
European shares edged up on Thursday as financial and tech stocks recovered, while troubled furniture retailer Steinhoff sank further, stung by an accounting scandal.
UK's benchmark FTSE 100 closed down by 0.4 percent, FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended up by 0.4 percent, and France’s CAC finished the day up by 0.2 percent.
Wall Street rose on Thursday, buoyed by popular technology companies including Facebook and Alphabet, while shares of yoga pants seller Lululemon Athletica also warmed up.
Dow Jones closed up by 0.29 percent, S&P 500 ended up 0.30 percent, Nasdaq finished the day up by 0.55 percent.
Treasuries Recap
Longer-dated U.S Treasury yields rose on Thursday as risk appetite increased, diminishing the attractiveness of safe-haven U.S. government debt.
Benchmark U.S. 10-year Treasury notes fell 10/32 in price to yield 2.37 percent. The 30-year bond fell 27/32 in price to yield 2.76 percent. U.S. two-year notes were little moved from their late Wednesday levels, yielding 1.81 percent.
Commodities Recap
Gold fell 1 percent on Thursday, hitting a four-month bottom below its recent trading range, as Wall Street stocks rose and the U.S. dollar strengthened on optimism about passage of a U.S. tax overhaul.
Spot gold dropped 1 percent to $1,251.11 an ounce by 2 p.m. EST (1900 GMT), bouncing off a four-month low of $1,250.51. U.S. gold futures for February delivery settled down $13, 1 percent, at $1,253.10 per ounce.
Oil prices climbed more than 1 percent on Thursday due to a threatened strike in Nigeria and as traders cover shorts after sharp losses the previous day brought on by an unexpectedly large rise in U.S. stocks of refined fuels.
Brent futures rose 98 cents, or 1.6 percent, to settle at $62.20 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 73 cents, or 1.3 percent, to settle at $56.69.
