Market Roundup
• US Initial Jobless Claims w/e 232k, 240k forecast, 244k previous.
• US Jobless Claims 4-Wk Avg w/e 240.50k, 241.00k.
• US Continued Jobless Claims w/e 1.953M, 1.953M forecast, 1.956M.
• US Industrial Output MM Jul 0.2%, 0.3% forecast, 0.4% previous.
• US Philly Fed Business Index Aug 18.9, 18.5 forecast, 19.5 previous.
• US Manuf Output MM Jul -0.1%, 0.2% forecast, 0.2%previous.
• Fed's Kashkari: Debt ceiling a factor in balance sheet runoff start date.
• Kashkari: Very hard to see how the united states will achieve 3% growth.
• Fed's Kaplan: Without NAFTA trade deal, US jobs would be lost to Asia.
• Kaplan: To shed bonds 'in near future'; would like to see more progress on inflation before considering another rate hike.
• Kaplan: Low yields are warning Fed to think twice on rate hike.
• Van mows down the crowd in Barcelona, several reported killed.
• US, Japan step up defense cooperation to counter N.Korea.
• Trump defends monuments to the pro-slavery Confederacy.
• Market backlash, euro surge worried ECB, minutes show.
• Brazil economic activity index up more than expected in June.
• Canada considers reopening its 50-year bond.
• Canadian factory sales drop in June on petroleum, transport.
Looking Ahead - Economic Data (GMT)
• 01:30 China House Prices YY Jul 10.2% previous
Looking Ahead - Events, Other Releases (GMT)
• 14:15 Dallas Fed’s Kaplan participates in a Q&A at the Dallas County Community College 2017 – Texas
Currency Summaries
EUR/USD is likely to find support at 1.1600 levels and currently trading at 1.1728 levels. The pair has made session high at 1.1751 and hit lows at 1.1666 levels. U.S. dollar strengthened against euro on Thursday as the dollar was boosted by weakness in the euro after the European Central Bank's July policy meeting minutes, but was volatile as rumors swirled about the possible resignation of Gary Cohn, director of the U.S. National Economic Council. A tweet sent from an unverified news account said Cohn was set to resign. That pared the dollar's early gains against most major currencies and sent the dollar index, which tracks the U.S. currency against six rivals, near its lows on the day. The White House released a statement shortly after saying Cohn "intends to remain in his position."That helped calm markets as Cohn, along with Treasury Secretary Steve Mnuchin, is seen as pivotal to U.S. President Donald Trump's economic agenda of tax cuts and infrastructure spending. The dollar index's largest component is the euro, which sank to a three-week low after the release of the ECB's minutes showed officials warning about a possible market overshoot for the currency. The euro has risen close to 12 percent against the dollar this year. The minutes, released at 7:30 a.m. EDT (1130 GMT), spurred an almost 1 percent fall in the single currency against the dollar.
GBP/USD is supported in the range of 1.2835 levels and currently trading at 1.2870 levels. It reached session high at 1.2909 and dropped to session low at 1.2837 levels. Britain's steadied against the dollar on Thursday as sterling was supported by a mixed batch of UK retail sales figures helped investors put aside nerves over the economy and Brexit talks that have driven the currency to its weakest since October. British retail sales slowed as expected in July after a strong second quarter, as shoppers cut back on purchases of most things other than food, adding to worries about a fall in consumer demand. Retail sales volumes grew by 0.3 percent month-on-month in July, a shade above economists' forecasts in a Reuters poll for a 0.2 percent rise, the Office for National Statistics said, and the same as a downwardly revised reading for June. Sterling on Wednesday fell to its weakest against the euro since last October's short-lived "flash crash”. Noise around Britain's strategy for leaving Europe and the talks on the issue with Brussels have provided little positive for investors worried that the process is becoming increasingly chaotic and may do longer-term damage to the economy. For now positioning data and options market pricing suggests hedge funds have backed away from plays on more sterling weakness.
USD/CAD is supported at 1.2586 levels and is trading at 1.2668 levels. It has made session high at 1.2677 and lows at 1.2624 levels. The Canadian dollar lost ground against its U.S. counterpart on Thursday as domestic manufacturing data fell more than expected and geo political concerns pressured Canadian dollar. Canadian factory sales were down by 1.8 percent in June from May, with declines for petroleum and coal products, transportation equipment, and chemical industries, Statistics Canada said. Analysts had forecast a decrease of 1.0 percent. Oil prices rose on expectations of a hefty stockpile draw at the U.S. oil storage hub at Cushing, Oklahoma, reversing Wednesday's loses, which were spurred by data showing U.S. crude output at its highest in two years. On Wednesday, the loonie rallied more than 1 percent as U.S. Federal Reserve concerns over inflation and the disbanding of U.S. President Donald Trump's manufacturing council and strategic policy forum weighed on the greenback. The U.S. dollar rebounded across the board on Thursday, reserving some of its strongest gains against the euro after minutes of the July meeting by the European Central Bank prompted investors to cover bearish bets against the greenback. The Canadian dollar was down 0.1 percent at C$1.2659 to the greenback or 79.15 U.S. cents. The currency's weakest level of the session was C$1.2647, while it touched its strongest since Aug. 4 at C$1.2588.
AUD/USD is supported around 0.7852 levels and currently trading at 0.7889 levels. It hit session high at 0.7934 and made session lows at 0.7887 levels. The Australian dollar declined against US dollar in the US session on Thursday as investors took profits on the Australian dollar recent rally and investor’s favored safe-haven investments amid skepticism U.S. President Donald Trump, roiled in controversy, would achieve his economic agenda. Adding to investor concerns was news that a van had slammed into crowds in the Spanish city of Barcelona, killing 13 people, according to media reports, in an attack police were treating as a terrorism. A crisis deepened over Trump's response to violence on Saturday in the Virginia college town of Charlottesville, spurred by a white nationalist protest against the removal of a Confederate statue. A range of worries prompted investors to take profit, including the U.S. relationship with North Korea, the Barcelona attack, as well as domestic turmoil. The Australian dollar was last trading at $0.7895, above a trough of $0.7816 touched on Wednesday. The Aussie went as low as $0.7808 earlier this week, a level not seen since July 18.
Equities Recap
European shares broke their three-day winning streak on Thursday as banks fell following a set of cautious minutes from the U.S. Federal Reserve, and energy stocks also weighed on a busy day for company results.
UK's benchmark FTSE 100 closed down 0.5 percent, FTSEurofirst 300 ended the day down by 0.54 percent, Germany's Dax ended down by 0.5 percent, and France’s CAC finished the day down by 0.5 percent.
U.S. stocks sold off on Thursday, pushing the S&P 500 to its lowest in a month, as escalating worries about the Trump administration's ability to push through its agenda rattled investors.
Dow Jones closed down by 1.23 percent, S&P 500 ended down 1.52 percent, Nasdaq finished the day down by 1.93 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday as investors, unnerved by a deadly attack in Barcelona and speculation about a top White House economic adviser quitting, favored safe, low-yielding bonds over stocks and other risky assets.
On light summer trading volume, benchmark 10-year Treasury yield hit its lowest level in four sessions at 2.196 percent, down nearly 3 basis points from Wednesday.
Commodities Recap
Gold rose for a second day on Thursday after Federal Reserve officials hinted that U.S. interest rates could rise more slowly than expected, while palladium was lifted to a fresh 16-year high by strong industrial metals markets.
Spot gold was up 0.4 percent at $1,286.44 an ounce by 3:21 p.m. EDT (1921 GMT) after rising nearly 1 percent the previous day. U.S. gold futures for December delivery gained 0.7 percent to settle at $1,292.40 an ounce.
Oil prices rose on Thursday as renewed attention was put on U.S. oil stockpile declines after an industry report suggested oil inventories at the Cushing, Oklahoma hub were declining.
Brent crude settled up 76 cents, or 1.51 percent at $51.03 a barrel. U.S. light crude was 31 cents, or 0.66 percent, higher at $47.09 a barrel.
Both benchmarks fell more than 1 percent on Wednesday despite data showing that U.S. inventories last week fell the most in nearly a year.
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