Market Roundup
• U.S., China exchange barbs over Huawei as trade tensions flare
• Fed: U.S. households see slight economic improvement over last year
• Fed's Kaplan says he's 'agnostic' on next Fed rate move
• UK's May hangs on after Brexit gambit backfires
• US May Markit Comp Flash PMI, 50.9, 53.0 previous
• US Apr New Home Sales-Units, 0.673 mln, 0.675 mln forecast, 0.692 mln previous, 0.723 mln revised
• US Apr New Home Sales Chg MM, -6.9%, -2.8% forecast, 4.5% previous, 8.1% revised
• US 18 May, w/e Initial Jobless Claims, 211k, 215k forecast, 212k previous
• US 11 May, w/e Continued Jobless Claims 1.676 mln, 1.670 forecast, 1.660 previous, 1.664 mln revised
• CA Mar Wholesale Trade MM, 1.4%, 0.9% f'cast, 0.3% previous, 0.2% revised
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Apr Trade Balance, 922.0 mln previous
• 23:30 Japan Apr CPI, Core Nationwide YY, 0.9% forecast, 0.8% previous
• 23:30 Japan Apr CPI MM NSA, 0.0% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Eurogroup head Mario Centeno speaks at the Economic Outlook Forum, Lisbon
• 09:15 BoE's Sam Woods' keynote speech at the Building Society Association Annual Conference, London
• 09:30 German Finance Minister Olaf Scholz speaks at the annual conference of finance ministers of the federal states, Berlin
Currency Summaries
EUR/USD: The euro rose sharply against the U.S. dollar on Thursday, as weaker domestic data and the threat of economic fallout from the trade war with China increased expectations for an interest-rate cut this year weighed on greenback. Sales of new U.S. single-family homes fell from near an 11-1/2-year high in April as prices rebounded and manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in economic growth was underway. The euro was up 0.29 percent at $1.1182. An index that tracks the dollar versus a basket of six major currencies was down 0.23 at 97.86. Immediate resistance can be seen at 1.1187 (11 DMA), an upside break can trigger rise towards 1.1230 (50 DMA).On the downside, immediate support is seen at 1.1160 (5 DMA), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: Sterling weakened against dollar on Thursday, as pressure mounted on Prime Minister Theresa May to name a date for her departure after a backlash over her last-ditch plans for Britain's exit from the European Union. May's final attempt to get colleagues' backing for a divorce deal triggered a revolt on Wednesday by some of her Brexit-supporting ministers, deepening political uncertainty in Britain and sparking another round of selling of the pound. The pound dropped 0.4% to a new 4-1/2 month low of $1.2605, before recovering some of those losses. It is the worst performing major currency in May, and so far has lost more than 3% of its value against the dollar. Immediate resistance can be seen at 1.2655 (5 DMA), an upside break can trigger rise towards 1.2770 (9 DMA).On the downside, immediate support is seen at 1.2600 (Lower Bollinger Band), a break below could take the pair towards 1.2574 (13th Dec 2018 low).
USD/CAD: The Canadian dollar weakened to a six-day low against the greenback and lost ground against other G10 currencies on Thursday, as plunging oil prices overshadowed domestic data showing a stronger-than-expected gain for wholesale trade. The price of oil, one of Canada's major exports, slumped to its lowest since March 13 as global trade tensions dampened the demand outlook. U.S. crude oil futures settled 5.7% lower at $57.91 a barrel, its biggest decline since Dec. 24. At (2016 GMT), the Canadian dollar was last trading 0.3% lower at 1.3478 to the greenback, or 74.19 U.S. cents. The currency touched its weakest intraday level since May 17 at 1.3502.Immediate resistance can be seen at 1.3500 (Psychological Level), an upside break can trigger rise towards 1.3517 (May 17th high).On the downside, immediate support is seen at 1.3475 (9 DMA), a break below could take the pair towards 1.3397 (50 DMA).
USD/JPY: The dollar weakened against the Japanese yen on Thursday, as fears that the U.S-China trade war was escalating into a tech-focused cold war increased demand for safe haven assets. U.S-China trade tensions flared up with U.S. Secretary of State Mike Pompeo accusing Chinese telecom giant Huawei Technologies of lying about its ties to the government and Beijing saying Washington must end its "wrong actions" if it wanted trade talks to continue. Investors worry about further negative impacts the protracted war will have on global growth, with soft economic data from Germany and the euro zone on Thursday being the latest evidence.At (2022 GMT) ,the dollar was 0.77 percent lower versus the Japanese yen at 109.55. Strong resistance can be seen at 109.59 (11 DMA), an upside break can trigger rise towards 110.45 (21 DMA).On the downside, immediate support is seen at 109.45 (9 DMA), a break below could take the pair towards 109.00 (Psychological level).
Equities Recap
European shares sank on Thursday as the latest round of U.S.-China trade friction and a soft set of business surveys sapped investors' risk appetite, while pressure on British Prime Minister Theresa to quit added to Brexit concerns.
UK's benchmark FTSE 100 by 1.4percent, the pan-European FTSEurofirst 300 ended the day down by 1.42 percent, Germany's Dax ended down by 1.7 percent, France’s CAC finished the day down by down by 1.7 percent.
The S&P 500 extended its losses slightly on Thursday afternoon after a Federal Reserve statement, and energy stocks led the declines as oil prices fell.
Dow Jones closed down by 1.11 percent, S&P 500 ended down by 1.19 percent, Nasdaq finished the day down by 1.57 percent.
Treasuries Recap
U.S. Treasury yields dropped across the board on Thursday as risk appetite faded amid continued concerns about global growth and a worsening trade conflict between the United States and China.
In late trading, U.S. 10-year note yields fell to 2.293% from 2.393% late on Wednesday, after earlier sliding to 2.292%, its lowest since October 2017.
Commodities Recap
Gold prices jumped 1% on Thursday as the U.S. dollar pulled back from a two-year peak scaled earlier in the session, and global equities and U.S. Treasury yields slid on escalating U.S.-China trade tensions.
Spot gold climbed 0.9% to $1,284.78 per ounce by (1858 GMT), after rising as much as 1.1% to a one-week peak of 1,287.23.U.S. gold futures for June settled up 0.9% at 1,285.40.
Oil prices plunged on Thursday, losing about 5% as trade tensions dampened the demand outlook, putting the crude benchmarks on course for their biggest daily and weekly falls in six months.
Brent crude futures, the international benchmark, settled down $3.23, or 4.6%, at $67.76 a barrel.
U.S. West Texas Intermediate (WTI) crude futures dropped $3.51, or 5.7%, to $57.91 a barrel. Earlier, the contract touched $57.33 a barrel, the lowest since March 13.
