Market Roundup
• Trump eyes emergency powers to pay for border wall, end shutdown.
• Trump says U.S. is having tremendous success with China on trade.
• Powell says Fed can be patient as U.S. economy evolves in 2019.
• Fed's policy stance too hawkish, rate rises should stop –Bullard.
• Fed is at the 'end of the road' on rate hikes, Bullard says.
• Government shutdown hikes uncertainty over rates, economy -Fed's Barkin.
• ECB to debate new cheap loans in "fragile and fluid" context –minutes.
• ECB must keep options open in face of risks – Villeroy.
• US 5 Jan, w/e Initial Jobless Claims, 216k, 225k forecast, 231k previous 233k revised.
• US 5 Jan, w/e Jobless Claims 4-Wk Avg, 221.75k, 218.75k previous, 219.25k revised
• US 29 Dec, w/e Continued Jobless Claims, 1.722 mln, 1.714 mln forecast, 1.740 mln previous, 1.750 mln forecast.
• CA Nov Building Permits MM, 2.6%, -0.5% forecast, -0.2% previous, -0.4% revised
• CA Nov New Housing Price Index, 0.0%, 0.0% forecast, 0.0% previous
• Argentina's peso firms after central bank buys $20 mln
Looking Ahead - Economic Data (GMT)
• 10 Jan 21:30 Australia Dec AIG Construction Index, 44.5 previous
• 10 Jan 21:45 New Zealand Nov Building Consents, 1.5% previous
• 10 Jan 23:30 Japan All Household Spending YY, -0.1% forecast, -0.3% previous
• 10 Jan 23:30 Japan Nov All Household Spending MM, 0.2% forecast, 1.8% previous
• 10 Jan 23:50 Japan Dec Bank Lending YY, 2.1% previous
• 10 Jan 23:50 Japan Nov Current Account NSA JPY, 567.6 bln forecast, 1,309.9 bln previous
• 11 Jan 05:00 Japan Dec Economy Watchers Poll SA, 51.0 previous
Looking Ahead - Events, Other Releases (GMT)
• 00:00 Fed’s Richard Clarida speaks to Money Marketeers of New York University New York
• 08:20 ECB’s Yves Mersch speaks at an event organized by National Bank of Slovakia in Bratislava
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Thursday, as greenback strengthened after Federal Reserve Chairman Jerome Powell said the U.S. central bank intends to further shrink the balance sheet, suggesting it is not done tightening monetary policy just yet. The euro dropped 0.4 percent to $1.1498. The dollar index rose 0.3 percent to 95.535, after earlier dropping to a three-month trough. It has weakened though in four of the last six sessions as traders bet U.S. interest rates will stay steady in 2019. Immediate resistance can be seen at 1.1571 (Daily high), an upside break can trigger rise towards 1.1635 (200 DMA).On the downside, immediate support is seen at 1.1441 (9 DMA), a break below could take the pair towards 1.1398 (21 DMA).
GBP/USD: The British pound declined against the dollar on Thursday, as stronger dollar and caution ahead of parliamentary vote on the prime minister's Brexit deal weighed on British pound. Britain's main opposition Labour Party will demand a general election if May loses a vote in parliament over her Brexit plans next week, its leader Jeremy Corbyn will say on Thursday. The pound fell to $1.2743, down 0.3 percent on the day. Immediate resistance can be seen at 1.2815 (Higher Bollinger Band), an upside break can trigger rise towards 1.2891 (100 DMA).On the downside, immediate support is seen at 1.2713 (9 DMA), a break below could take the pair towards 1.2655 (21 DMA).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Thursday, as fading investor optimism for a trade deal between the United States and China weighed on Canadian dollar. On the data front, Canadian building permits increased by 2.6 percent in November from October. Analysts had expected a decline of 0.5 percent. The Canadian dollar was last trading 0.2 percent lower at 1.3237 to the greenback. The currency traded in a range of 1.3207 to 1.3257.Immediate resistance can be seen at 1.3319 (50 DMA), an upside break can trigger rise towards 1.3397 (61.8 % retracement level).On the downside, immediate support is seen at 1.3162 (100 DMA), a break below could take the pair towards 1.3127 (16 Nov 2018 low).
USD/JPY: The U.S. dollar strengthened against the yen on Thursday, after assurance by Federal Reserve Chairman Jerome Powell that the U.S. central bank has the ability to be patient on monetary policy. The dollar rallied from three-month lows, with investors reducing bearish positions on the currency as they awaited resolution in the U.S.-China trade negotiations. The dollar index, tracking it against a basket of six major currencies, rose 0.35 percent to 95.549, after earlier dropping to a three-month trough. Strong resistance can be seen at 109.00 (10 DMA), an upside break can trigger rise towards 109.55 (61.8 % retracement level).On the downside, immediate support is seen at 107.64 (23.6 % retracement level), a break below could take the pair towards 107.00 (Psychological level).
Equities Recap
European shares traded cautiously on Thursday, ending the session just slightly up as uncertainty over U.S.-China trade talks continued and weak earnings reports hit auto and retailer stocks.
UK's benchmark FTSE 100 closed down by 1.5 percent, the pan-European FTSEurofirst 300 ended the day down by 1.83 percent, Germany's Dax ended down by 2.4 percent, France’s CAC finished the day down by 0.6 percent.
Wall Street extended its rally into a fifth straight day on Thursday in a session of whipsaw trading as investors responded to mixed comments by Federal Reserve Chairman Jerome Powell, while a warning from Macy's pummeled retail stocks.
Dow Jones closed up by 0.53 percent, S&P 500 ended up 0.44 percent, Nasdaq finished the day up by 0.46 percent.
Treasuries Recap
U.S. Treasury prices rose on Thursday as stocks weakened in choppy trading, but pared price gains after a soft 30-year bond auction and as Federal Reserve Chairman Jerome Powell said the U.S. central bank will "substantially" reduce the size of its balance sheet.
Benchmark 10-year notes gained 3/32 in price to yield 2.719 percent, down from 2.728 percent late Wednesday. The yield curve between two-year and 10-year notes steepened to 16 basis points, from 13 basis points early on Wednesday.
Commodities Recap
Gold slipped on Thursday, holding below $1,300 an ounce as the dollar bounced up off lows as investors pared back bearish positions on the U.S. currency.
Spot gold fell 0.4 percent to $1,286 per ounce as of (2130 GMT), having reached $1,297.08 earlier in the session. U.S. gold futures settled down 0.4 percent at $1,287.4 per ounce.
Crude prices edged higher on Thursday, supported by comments from the U.S. Federal Reserve chairman that lifted equity markets, but a more than week-long oil rally slowed as optimism surrounding U.S.-China trade talks faded.
Brent crude futures rose 24 cents, or 0.4 percent, to settle at $61.68 a barrel. The global benchmark posted its first consecutive nine-day winning streak since September 2007.
West Texas Intermediate crude ended 23 cents, or 0.4 percent, higher at $52.59 a barrel, also its ninth straight day of gains, that beats a 2010 record.
