Market Roundup
• US GDP Final Q2, 3.1%, 3.0% forecast, 3.0% previous.
• US Core PCE Prices Final Q2, 0.9%, 0.9% forecast, 0.9% previous.
• US GDP Deflator Final Q2, 1.0%, 1.0% forecast, 1.0% previous.
• US PCE Prices Final Q2, 0.3%, 0.3% forecast, 0.3% previous.
• US Initial Jobless Claims w/e, 272k, 270k forecast, 259k previous.
• US Continued Jobless Claims w/e, 1.934M, 1.990M forecast, 1.980M previous.
• US Jobless Claims 4-wk Avg w/e, 277.75k, 268.75k previous.
• US GDP Cons Spending Final Q2, 3.3%, 3.3% previous.
• US GDP Sales Final Q2, 2.9%, 3.0% forecast, 3.0% previous.
• US Adv Goods Trade balance Aug, -62.94B, -63.86B previous.
• US Wholesale Inventories Advance Aug, 1.0%, 0.6% previous.
• US Retail Inventories Advance Aug, 0.4%, -0.2% previous.
• US Corporate Profits Revised Q2, 0.1%, 0.9% forecast, 0.8% previous.
• US KC Fed Mfg Sep, 22, 22 previous.
• US KC Fed Composite Index Sep, 17, 16 previous.
• BOC's Poloz: Ripping up NAFTA would be negative shock to Canada.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Building Consents Aug, -0.7% previous
• 23:01 Great Britain Gfk Consumer Confidence Sep, -11 forecast, -10 previous
• 23:30 Japan All Household Spending YY Aug, 1.0% forecast, -0.2% previous
• 23:30 Japan All household Spending MM Aug, -0.2% forecast, -1.9% previous
• 23:30 Japan CPI, Core Nationwide YY Aug, 0.7% forecast, 0.5% previous
• 23:30 Japan CPI, Overall Nationwide Aug, 0.4% previous
• 23:30 Japan CPI Core Tokyo YY Sep, 0.5% forecast, 0.4% previous
• 23:30 Japan CPI, Overall Tokyo Sep, 0.5% previous
• 23:30 Japan Jobs/Applicants Ratio Aug, 1.53% forecast, 1.52% previous
• 23:30 Japan Unemployment Rate Aug, 2.8% forecast, 2.8% previous
• 23:50 Japan Industrial Output Prelim Aug, 1.9% forecast, -0.8% previous
• 23:50 Japan Retail Sales YY Aug, 2.6% forecast, 1.9% previous
• 01:30 Australia Private Sector Credit Aug, 0.5% previous
• 01:30 Australia Housing Credit Aug, 0.5% previous
• 05:00 Japan Construction Orders YY Aug, 14.9% previous
• 05:00 JP Housing Starts YY Sep, 0.9% Rtrs f/c, -2.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 07:30 ECB’s Nouy participates in Single Resolution Board Conf. in Brussels
• 10:30 IMF’s Lagarde speaks at the "20 Years On" conf. in London
• 12:00 BOE’s Cunliffe will speak at Single Resolution Board Conf. in Brussels
• 14:15 Dialogue between ECB’s Draghi and BOE’s Carney in London
• 15:00 Fed’s Philadelphia President Patrick Harker speaks in Philadelphia, Pennsylvania
Currency Summaries
EUR/USD is likely to find support at 1.1700 levels and currently trading at 1.1785 levels. The pair has made session high at 1.1803 and hit lows at 1.1758 levels. Euro inched higher against the dollar on Thursday as the dollar eased after investors took profits on the greenback's rally this week ahead of the end of the quarter. The dollar index, which tracks the greenback against six major currencies, was down 0.18 percent at 93.196. The index was coming off its strongest three-day performance in nine months. On Wednesday, the dollar rose against other major currencies after President Donald Trump proposed the biggest shake-up of the U.S. tax system in three decades. The dollar index surged to a 14-year high in January, spurred by expectations that the new U.S. administration would focus on pro-growth fiscal stimulus, tax cuts and regulatory reform that would likely lift inflation and prompt the Fed to raise interest rates more quickly this year. But Trump's inability to deliver on some of his promises spooked investors and the index slumped to its lowest since early 2015 earlier in September. On Thursday, the dollar failed to react much to data that showed the U.S. economy grew a bit faster than previously estimated in the second quarter.
GBP/USD is supported in the range of 1.3300 levels and currently trading at 1.3446 levels. It reached session high at 1.3457 and dropped to session low at 1.3368 levels. Sterling strengthened against a weakening dollar on Thursday after Britain's Brexit secretary said "considerable progress" had been made in talks and the EU's chief negotiator praised a "new dynamic" from the prime minister. Sterling had earlier been trading down on the day, dipping to as low as $1.3344 after Bank of England Governor Mark Carney said the bank could not by itself nullify the negative effects of Britain leaving the European Union on the economy. But it turned higher as the dollar weakened and after Barnier said the two sides in the Brexit negotiations. Barnier said further work was needed in the coming weeks and months, but he praised a "new dynamic" created by concessions made last week by Prime Minister Theresa May in a speech in Florence, Italy. Sterling strengthened to as much as $1.3455, up over half a percent on the day. Having earlier dipped against the euro, sterling turned slightly higher on the day to 87.60 pence versus the single currency, close to a 10-week high. Strong UK retail sales numbers on Wednesday bolstered expectations of a BoE rate hike in November, a view that lifted the pound above $1.3650 to its highest since the Brexit vote earlier this month.
USD/CAD is supported at 1.3246 levels and is trading at 1.3312 levels. It has made session high at 1.3347 and lows at 1.3273 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as greenback eased after a recent rally as investors digested U.S. economic data and prospects for a U.S. tax reform plan proposed by President Donald Trump. Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit. Data on Thursday showed the U.S. economy grew a bit faster than previously estimated in the second quarter, but the momentum probably slowed in the third quarter, with activity curbed temporarily following Hurricanes Harvey and Irma. Oil prices slipped, backing off from earlier gains spurred by tension around northern Iraq following the Kurdistan region's vote in favor of independence. The Canadian dollar was trading at C$1.2431 to the greenback, or 80.25 U.S. cents, up 0.1 percent. The currency's strongest level of the session was C$1.2414, while it touched its weakest since Aug. 31 at $1.2519.
AUD/USD is supported around 0.7798 levels and currently trading at 0.7856 levels. It hit session high at 0.7860 and made session lows at 0.7814 levels. The Australian dollar edged slightly higher on Thursday as the greenback paused its recent rally triggered by hawkish rhetoric by the U.S. Federal Reserve. The Australian dollar held at $0.7851, after going as low as $0.7797 overnight, a level not seen since mid-August. For the week so far, the Aussie has fallen 1.3 percent and was on track for its worst performance since early April. The declines have largely been led by advances in the U.S. dollar as the market was almost convinced of a December rate rise by the Federal Reserve. Two-year Treasury yields have climbed to their highest since 2008. President Donald Trump's tax reform plan on Wednesday also gave markets something to cheer about, although economists believe the proposal - short on detail - will face major hurdles in Congress which sits for barely 30 days in 2017. The Aussie, which had been on an upward trend since the start of this year, has recently run out of gas. It is down more than 1 percent in September, on top of a 0.7 percent fall in August.
Equities Recap
European shares closed in mixed directions on Thursday but clung to a 10-week high as bullishness fuelled by President Donald Trump's tax cut plan lingered on despite concerns it might prove difficult to implement.
The UK's benchmark FTSE 100 closed up by 0.1 percent, FTSEurofirst 300 ended the day up by 0.2 percent, Germany's Dax ended up by 0.3 percent, and France’s CAC finished the up by 0.2 percent.
Wall Street edged higher on Thursday, with the S&P 500 poised to close at a record on gains in McDonald's and healthcare names, while investors continued to hope President Donald Trump will be able to make progress on tax reform.
Dow Jones closed up by 0.17 percent, S&P 500 ended down 0.11 percent, Nasdaq finished the day down by 0.01 percent.
Treasuries Recap
The yield spread between shorter and longer-dated U.S. Treasuries grew on Thursday in the aftermath of a tax plan that raised concerns about faster growth in the federal deficit and borrowing.
The yield on 10-year Treasury notes was 2.309 percent, unchanged from Wednesday. It reached 2.359 percent earlier on Thursday, the highest since July 13, and traded above its 200-day moving average for the first time since Aug. 1.
The two-year yield retreated from near nine-year highs tied to bets the Federal Reserve would raise short-term interest rates in December.
Commodities Recap
Oil prices slipped on Thursday, backing off from recent gains that were spurred by tension around northern Iraq following the Kurdistan region's vote in favor of independence.
U.S. crude fell 72 cents to $51.42 a barrel by 1:48 a.m. ET (1748 GMT) after reaching a five-month intraday high of $52.86.
Brent was down 62 cents at $57.28 a barrel, after hitting a more than two-year high of $59.49 on Tuesday after Monday's referendum vote prompted Turkey to threaten to close the region's oil pipeline.
Gold touched a six-week low on Thursday after the dollar and U.S. bond yields rose on proposed U.S. tax reforms and strong economic data that supported the case for another U.S. interest rate hike this year.
Spot gold was up 0.2 percent at $1,283.86 an ounce at 1418 GMT after hitting $1,277.26, its lowest since Aug. 16. U.S. gold futures for December delivery were 0.1 percent lower at $1,286.80.
