Market Roundup
• US Jan housing starts 1.246m (1.222 forecast), -2.6% m/m; building permits 1.285m, +4.6%- 1-yr high.
• US weekly jobless claims 239k vs 245k forecast, 234k previous; 4-wk average 245.25k v 244.75k previous.
• Philly Fed business Index 43.3 v 18 forecast, 23.6 previous, new orders higher, employment & prices paid lower.
• ECB minutes suggest little appetite to curb stimulus; GC to remain patient & maintain steady hand to provide stability and predictability in an environment still characterized by a high level of uncertainty.
• ECB’s Coeure: Letting countries leave EZ would break ECB policy, Not every failing bank should be seen as systemic.
• OPEC could extend or deepen supply cut if oil glut persists – sources.
• Gold rises on weaker dollar, political uncertainty; Dollar falls after 10-day winning streak.
• Dollar slips as traders weigh next U.S. rate hike, pre-Yellen March hike optimism fades.
• Divergent policy outlooks keep Germany-U.S. bond yield gap near one-month high; Spain, Italy bond yields fall to two-week lows.
• Greece: "not a euro more" in cuts as officials call for a speedy deal; impasse could harm nascent recovery-EU officials.
Looking Ahead - Economic Data (GMT)
• 23:00 Japan Reuters Tankan DI Feb 18-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0621 levels and currently trading at 1.0673 levels. The pair has made session high at 1.0679 and hit lows at 1.0630 levels. The dollar dipped against euro on Thursday as greenback took a breather on uncertainty over the timing of the Federal Reserve's next interest rate increase. The greenback was on track for the second day of losses following a winning streak where it touched a five-week peak versus the euro and a 2-1/2 week high against the yen. Traders have scaled back bets on a looming U.S. rate hike as they concluded Fed Chair Janet Yellen didn't deliver enough conviction, at her economic testimony before Congress on Wednesday, on whether the Fed's next rate increase will come at its March 14-15 meeting. However, she signaled more than two rate increases may be possible this year as the economy approaches full employment and inflation closes in on the Fed's 2 percent goal. The greenback scaled back from a 2-1/2 week high of 114.95 yen on Wednesday against the yen, touching a low of 113.17 yen. It was last down 0.8 percent at 113.24 yen. The euro gained 0.7 percent at $1.0675, recovering from a five-week trough of $1.052 set on Wednesday.
GBP/USD is supported in the range of 1.2441 levels and currently trading at 1.2487 levels. It reached session high at 1.2508 and dropped to session low at 1.2459 levels. Sterling declined against dollar on Thursday as sterling came under selling pressure as nerves around Brexit and the strength of the UK economy weighed on Sterling. There have been negative signs from a handful of economic data, with wages numbers on Wednesday dipping below forecasts. The pound was up 0.3 percent at $1.2488 in afternoon trade in London, compared to gains of around 0.6 percent for the euro and yen against the dollar. It dipped a quarter of a percent to 85.35 pence per euro. Retail sales numbers due on Friday will provide the next clue to the broader strength of the UK economy, which has proved consistently more robust than expected in the face of Brexit nerves since last June. Sales growth is expected at 3.4 percent year on year in January.
USD/CAD is supported at 1.2989 levels and is trading at 1.3077 levels. It has made session high at 1.3079 and lows at 1.3038 levels. The Canadian dollar declined against its U.S. counterpart on Thursday, pulling back from an earlier 10-day high even as oil rose and the greenback lost ground against a basket of major currencies. Oil prices pulled back from strong gains registered on Friday as the dollar strengthened and signs of rising U.S. crude output pressured prices. The U.S. dollar posted its steepest one-day drop in over two weeks, due to lower U.S. bond yields and uncertainty over the timing of the Federal Reserve's next interest rate increase. The dollar was up 0.14 percent against a basket of major currencies, after touching its highest level in almost three weeks, on expectations the reflationary policies would stoke economic growth and the possibility the Fed could be more aggressive in hiking interest rates The Canadian dollar was last trading at C$1.3075 to the greenback, or 76.45 U.S. cents, slightly weaker than Wednesday's close of C$1.3070, or 76.48 U.S. cents.
AUD/USD is supported around 0.7635 levels and currently trading at 0.7692 levels. It hit session high at 0.7711 and made session lows at 0.7683 levels. The Australian dollar declined against US dollar in the US session on Thursday as investors took profits on Australian dollars initial rally. Australian dollar earlier in the Asian session powered up to multi-year peaks against the yen, Swiss franc and euro as investors poured money into higher-yielding assets after data showed a surprise dip in Australia's unemployment rate. Australia's unemployment rate eased back unexpectedly in January but that masked a disappointing slump in full-time jobs that augured badly for a much-needed revival in wage growth and inflation. Data from the Australian Bureau of Statistics on Thursday showed employment rose 13,500 in January, topping forecasts of an increase of 10,000. But all of the increase was in part-time work, as full-time jobs fell 44,800 after three months of gain. The unemployment rate did dip to 5.7 percent but remained within a tight 5.6-5.8 percent range. The Australian dollar broke above 77 U.S. cents for the first time in 3-months and was last trading at 0.7694.
Equities Recap
European equities fell on Thursday after seven straight sessions of gains, with weaker metal prices weighing on miners and a poor update battering shares in engineering group Cobham.
UK's benchmark FTSE 100 closed down by 0.4 percent, FTSEurofirst 300 ended the day down by 0.43 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.6 percent.
The Dow Jones Industrial Average scored its sixth straight record high on Thursday, but just barely, while the S&P 500 edged lower due to declining energy stocks.
Dow Jones closed up by 0.04 percent, S&P 500 ended down 0.09 percent, Nasdaq finished the day down by 0.08 percent.
Treasuries Recap
U.S. Treasury prices gained on Thursday as weaker stock markets and a falling U.S. dollar increased demand for safe haven bonds, and after comments from a senior Federal Reserve official late on Wednesday were viewed as relatively dovish.
Benchmark 10-year notes were last up 17/32 in price to yield 2.44 percent, down from 2.50 percent late on Wednesday.
Commodities Recap
Gold rose on Thursday as the dollar weakened after a 10-day winning streak and investors took the opportunity to buy bullion as a hedge against political uncertainty in the United States and Europe.
Spot gold rose 0.7 percent to $1,240.86 an ounce by 2:37 p.m. EST (1937 GMT), and is up about 10 percent from a mid-December low. U.S. gold futures settled up 0.7 percent at $1,241.60.
Oil prices reversed gains to trade nearly 1 percent lower on Thursday but continued to hold in a tight range as the market weighed swelling U.S. inventories against possible renewed efforts by major oil producers to reduce a price-sapping glut.
By 10:34 a.m. ET (1534 GMT), Brent crude was down 48 cents, or 0.9 percent, at $55.27 a barrel while U.S. light crude dropped 26 cents, or 0.4 percent, to $52.85 a barrel.
