Market Roundup
• BOJ's Kuroda apparently rules out "helicopter money"-BBC.
• But Kuroda's "Helicopter money" comments were made mid-June-BBC.
• ECB keeps the door open to easing after holding rates steady.
• Strong U.S. home sales, low layoffs highlight economy's strength.
• U.S. June existing home sales rise to 5.57 million vs forecast- 5.48 million.
• U.S. jobless claims fall unexpectedly to 253k vs forecast 265k in NFP survey week.
• U.S. Philly Fed unexpectedly contracts but new orders highest since March.
• Brazil mid-month inflation above forecast, underscores BCB reluctance to cut.
• Draghi ready, willing, able to act, wants more data.
• ECB's Draghi says public backstop for NPL market possible.
• Draghi: bank equity prices of some significance for policymakers.
• South African central bank holds rates, as forecast, amid growth concerns.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e 2549.1b-previous
• 23:50 Japan Foreign Invest JP Stock w/e -306.8b- previous
• 02:00 Japan Nikkei Mfg PMI Flash Jul 48.1- previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- China Finance and central bank deputies meeting (to July 23) Chengdu, China.
Currency Summaries
EUR/USD is likely to find support at 1.0970 levels and currently trading at 1.1022 levels. The pair has made session high at 1.1059 and hit lows at 1.0980 levels. Euro declined slightly against the dollar on Thursday after the European Central Bank left key interest rates unchanged. The ECB held rates at record lows as it seeks to revive growth and inflation with cheap credit to the economy. It left the door open to more policy stimulus, highlighting "great" uncertainty and abundant risks to the economic outlook .The euro declined against the dollar, surrendering most of its gains from European Central Bank President Mario Draghi's comments that the bank would take time to reassess any changes in the economic outlook. On the data front, U.S. home resale’s hit their highest level in nearly 9-1/2 years in June as low-interest rates lured first-time buyers into the market and the number of Americans filing for unemployment benefits fell last week, underscoring the economy's strength. The National Association of Realtors said existing home sales increased 1.1 percent to an annual rate of 5.57 million units last month, the highest level since February 2007.
GBP/USD is supported in the range of 1.3153 currently trading at 1.3210 levels. It reached session high at 1.3240 and hit low at 1.3187 levels. Sterling fell against the dollar on Thursday after data showed the biggest monthly decline in British retail sales for six months in June, keeping alive expectations that the Bank of England will ease policy as early as next month. Retail sales volumes fell 0.9 percent, more than the forecast 0.6 percent, after rising by an above-average 0.9 percent in May. Compared with a year earlier, sales growth slowed to 4.3 percent from 5.7 percent in May, versus forecasts of 5.0 percent. Sterling hit a low of $1.3157 after the data, down 0.2 percent on the day, having traded at $1.3210 beforehand. It recovered some of those losses to trade at $1.3220 in the late US session, still down 0.1 percent on the day. On Wednesday, the pound got a boost from a BoE survey that showed no clear evidence of slowing activity after last month's Brexit vote. Traders are now awaiting flash PMI surveys of company purchasing managers on Friday for more insight on the immediate economic reaction to the vote.
USD/CAD is supported at 1.3022 levels and is trading at 1.3085 levels. It has made session high at 1.3100 and lows at 1.3022 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as renewed worries about a global oil glut weighed, more than offsetting stronger-than-expected domestic wholesale trade data. Prices for oil, a major Canadian export, fell more than 2 percent after a rise in U.S. gasoline inventories helped push total U.S. petroleum supplies to a record high. Slippage in crude oil prices restrained gains for Canada's commodity-linked currency. U.S. crude prices were down 2.1 percent to $46.20. Meanwhile, the value of Canadian wholesale trade surged by 1.8 percent in May from April, led by the motor vehicle and auto parts subsector, Statistics Canada said. In volume terms sales rose by 1.5 percent. The U.S. dollar slipped 0.2 percent against a basket of six currencies, on reports that Bank of Japan Governor Haruhiko Kuroda had ruled out using "helicopter money" to stimulate Japan's economy.
USD/JPY is supported around 105.00 levels and currently trading at 105.75 levels. It peaked to hit session high at 106.48 and made session lows at 105.40 levels. Japanese yen edged higher against US dollar on Thursday after Bank of Japan chief Haruhiko Kuroda said the bank saw no need to stimulate the economy with helicopter money. Investors had been betting on an aggressive round of stimulus from next week's BOJ meeting. Kuroda played down the idea of injecting cash directly to businesses and consumers during a BBC Radio 4 interview, leading to a yen surge as strong as 105.41 yen per dollar. The yen had earlier touched a six-week low against the dollar and the Nikkei rose to a six-week high on reports of a 20-trillion-plus-yen Japanese stimulus package. The Japanese currency, however, reversed course on Kuroda's remarks. It was last up 1 percent at 105.74 yen per dollar and 1.2 percent stronger versus the euro at 116.53 yen.
Equities Recap
European stocks closed mixed on Thursday, as a drop in the shares of major airlines offset gains in some banks, propped up by signals of support for the sector from the European Central Bank.
UK's benchmark FTSE 100 closed down by 0.3 percent, the pan-European FTSEurofirst 300 ended the day up by 0.04 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 0.1 percent.
Wall Street cooled off on Thursday as disappointing quarterly reports from tech stalwart Intel and from transportation companies stalled momentum in a U.S. corporate earnings season that has been better than feared.
Dow Jones closed down by 0.43 percent, S&P 500 ended down by 0.36 percent, Nasdaq finished the day down by 0.31 percent.
Treasuries Recap
U.S. Treasury long-dated debt yields fell from multi-week highs on Thursday, tracking declines in U.S. equities, as risk aversion crept back into the market with earnings disappointment at U.S. tech company Intel and news of arrests over an alleged terror plot in Brazil.
In late trading, benchmark U.S. 10-year Treasury notes were up 5/32 in price for a yield of 1.561 percent, down from 1.580 percent late on Wednesday. Earlier, benchmark yields hit 1.628 percent, the highest level since June 24.
U.S. 30-year bond prices were flat, yielding 2.296 percent. The yield touched a three-week peak of 2.360 percent earlier in the session.
U.S. two-year notes were up 1/32 in price, yielding 0.685 percent, down from 0.714 percent on Wednesday. Yields touched a four-week high of 0.731 percent.
Commodities Recap
Oil prices fell 2 percent on Thursday, as the market took a closer look at U.S. government data that showed growing inventories of gasoline and other oil products pushed total petroleum supplies in the No. 1 oil consumer to record highs.
Brent crude closed 97 cents, or 2.1 percent, lower at $46.20 a barrel.
U.S. West Texas Intermediate (WTI) crude settled down $1, or 2.2 percent, at $44.75.
Gold rebounded above a three-week low and rose 1 percent on Thursday, as the dollar fell and the key stock indexes hovered below record highs after the European Central Bank left key interest rates unchanged.
Spot gold gained 1.1 percent at $1,329.90 an ounce by 2:14 p.m. EDT (1814 GMT), after touching $1,310.56, its lowest since June 28.U.S. gold settled up 0.9 percent at $1,331 per ounce.
