Market Roundup
• US Initial Jobless Claims w/e 244k, 241k forecast, 234k previous.
• US Initial Jobless Claims 4-Wk Avg w/e 244.00K, 244.00k previous.
• US Continued Jobless Claims w/e w/e 1.964m, 1.950m forecast, 1.977m previous.
• US Durable Goods Jun 6.5%, 3.0% forecast, -0.1% previous.
• US Build Permits R Change MM Jun 9.2%, 7.4% previous.
• US Adv Goods Trade Balance Jun -63.86b, -66.30b previous.
• US Adv Wholesale Invty Jun 0.6%, 0.4% previous.
• US economy seen growing 2.8% in Q2 vs 2.5% in July 19 estimate – Atlanta Fed.
• Barclays raises US Q2 GDP growth view to 2.7% from 2.4% after June Trade data.
• JP Morgan raises US Q2 GDP growth view to 3.5% from 3.0% after June Trade data.
• Fed balance sheet plan may equal 3 rate hikes for emerging markets – IIF.
• Trump could seek 'tougher' Russia sanctions; Putin threatens retaliation.
• US Senate mulls bare-bones healthcare bill; marathon of voting expected.
• Euro Zone Jun M3 Annual Growth 5.0% vs 5.0% - ECB .
• Britain to scrap Libor rate benchmark from end of 2021.
• UK retail sales shoot higher in July, boosted by clothing sales – CBI.
• EU warns of possible delays to Brexit talks, London confident of schedule.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan CPI, Core Nationwide YY Jun 0.4% forecast, 0.4% previous
• 23:30 Japan CPI, Overall Nationwide Jun, 0.4% previous
• 23:30 Japan All Household Spending MM Jun, -0.1% forecast, 0.7% previous
• 23:30 Japan Retail Sales YY Jun 2.3% forecast, 2.0% previous
• 01:30 Australia PPI QQ Q2, 0.5% previous
• 01:30 Australia PPI YY Q2, 1.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 17:20 Minneapolis Fed’s Kashkari participates in a Q& A – Minneapolis
Currency Summaries
EUR/USD is likely to find support at 1.1621 levels and currently trading at 1.1684 levels. The pair has made session high at 1.1164 and hit lows at 1.1704 levels. The euro dipped against the dollar on Thursday as the dollar recovered after solid U.S. economic data, bouncing back from lows plumbed after Wednesday's Federal Reserve monetary policy statement. U.S. durable goods orders rose more than expected last month and a fifth straight monthly increase in shipments suggested that business spending on equipment would support economic growth in the second quarter. The good durable goods orders data was a welcome sign to dollar bulls, as U.S. economic data, including subdued inflation, and uncertainty surrounding U.S. President Donald Trump's proposed fiscal stimulus have sunk the dollar in recent months. The dollar sank on Wednesday after the Fed's policy statement remained largely unchanged from June and suggested the Fed was in no hurry to raise interest rates again. Soft U.S. data on inflation and consumer spending so far this year have pushed the dollar to multi-year lows against the euro, which has also been underpinned by the European Central Bank's talk of reducing its ultra-loose monetary policy. The euro on Thursday fell 0.5 percent against the dollar, slipping back below the $1.17 mark. The euro has risen more than 11 percent against the dollar so far this year.
GBP/USD is supported in the range of 1.2966 levels and currently trading at 1.3077 levels. It reached session high at 1.3154 and dropped to session low at 1.2995 levels. Sterling declined against dollar on Thursday as investors took profit after the U.S. Federal Reserve left policy unchanged and hinted interest rates might rise more slowly than expected. The pound got some support from a retail sales survey by an industry body, keeping any weakness confined within recent broad trading ranges. With the dollar skidding across the board, the pound took advantage, climbing as high as $1.3157, its highest since mid-September, in early trades. By 1600 GMT on Thursday it had eased back to $1.3071, down 0.4 percent on the day. Data on Wednesday showed Britain's economy gathered only a little speed in the second quarter after almost stalling at the start of the year, pouring cold water on expectations for UK interest rate hikes in the coming months. Growth of 0.3 percent on the quarter was up from 0.2 percent in the first three months of the year, in line with forecasts. But that figure is likely to cement expectations that the Bank of England will keep interest rates on hold next week at their record low level, when they also release a quarterly Inflation Report. Strategists say developments around Brexit will continue to be the main driver for the pound, which has fallen around 13 percent against the dollar since last June's referendum.
USD/CAD is supported at 1.2484 levels and is trading at 1.2543 levels. It has made session high at 1.2563 and lows at 1.2471 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as the dollar recovered some ground across the board after upbeat US economic data. U.S. data on Thursday showed that while new orders for key U.S.-made capital goods unexpectedly fell in June, shipments increased for a fifth straight month. Other data showed a sharp narrowing in the goods trade deficit last month and increases in both retail and wholesale inventories. The Canadian dollar rallied on Wednesday after the U.S. Federal Reserve issued a more dovish policy statement that left interest rates unchanged but addressed concerns about weaker inflation more explicitly than in the past. The Fed's tweaked language on inflation sparked investor concerns about U.S. economic growth and drove the U.S. dollar index, which measures the currency against six key counterparts, to a 13-month trough. The Canadian dollar was last trading at C$1.2563 to the greenback up 0.99 percent. The currency traded between C$1.2414, its strongest level since late June 2015, and C$1.2576.
AUD/USD is supported around 0.7893 levels and currently trading at 0.7932 levels. It hit session high at 0.8001 and made session lows at 0.7955 levels. The Australian dollar declined against US dollar on Thursday as the dollar rebounded after solid U.S. economic data and as traders digested the Federal Reserve's Wednesday statement that showed it was closer to paring its balance sheet. The U.S. central bank appeared less confident than it had about inflation picking up but said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy. The Australian dollar earlier in the Asian session hit highest since May 2015 at $0.8043 but retreated after upbeat US data to trade at $0.7964 down 0.49 percent. The next big target for the Aussie is $0.8164 while strong support lies at $0.7850. Dollar index that tracks the greenback against six major currencies was up 0.56 percent at 93.89 after hitting a 13-month trough of 93.152 earlier Thursday.
Equities Recap
The biggest one-day drop in AstraZeneca shares following a drug study failure dominated stock trading in Europe on Thursday, outweighing a handful of well-received earnings results and sending indexes lower.
UK's benchmark FTSE 100 closed down by 0.2 percent, FTSEurofirst 300 ended the day down by 0.24 percent, Germany's Dax ended down by 0.9 percent, and France’s CAC finished the day down by 0.2 percent.
A swoon in technology and transportation shares dragged the S&P 500 lower on Thursday on a day full of corporate earnings reports, but the Dow industrials set a record closing high, helped by a jump in Verizon shares.
Dow Jones closed up by 0.40 percent, S&P 500 ended down 0.10 percent, Nasdaq finished the day down by 0.65 percent.
Treasuries Recap
U.S. Treasury prices fell on Thursday as the market was weighed down by government and corporate debt supply, and as investors evaluated the Federal Reserve's statement that it is closer to paring its balance sheet.
U.S. benchmark 10-year Treasury notes fell 8/32 in price to yield 2.31 percent, up from 2.28 percent on Wednesday.
The yield curve between five-year notes and 30-year bonds steepened to 108 basis points, the highest since June 14.
Commodities Recap
Gold fell from a six-week high on Thursday, pressured by the dollar's bounce on solid U.S. economic data and as traders digested the Federal Reserve's Wednesday statement that showed it was closer to paring its balance sheet.
Spot gold was flat at $1,260.86 an ounce by 2:26 p.m. EDT (1826 GMT), after peaking at $1,264.99, its highest since June 15.
U.S. gold futures for August delivery settled up 0.9 percent at $1,260, after falling in the prior session before the Fed released its statement.
Oil prices rose to an eight-week high on Thursday, as a rally in U.S. gasoline futures spurred further gains this week that came after key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories.
Benchmark Brent futures rose 52 cents, or 1 percent, to settle at $51.49 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 29 cents, or 0.6 percent, to settle at $49.04.
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