Market Roundup
• US w/e Initial Jobless Claims, 261k, 245k forecast, 250k previous.
• US w/e Jobless Claims 4-Wk Avg, 250.75k, 241.75k previous.
• US w/e Continued Jobless Claims, 1.867 mln, 1.915 mln forecast, 1.914 mln previous, 1.902 mln revised.
• US Dec PPI Final Demand YY, 2.6%, 3.0% forecast, 3.1% previous.
• US Dec PPI Final Demand MM, -0.1%, 0.2% forecast, 0.4% previous.
• US Dec PPI exFood/Energy YY, 2.3%, 2.5% forecast, 2.4% previous.
• US Dec PPI exFood/Energy MM, -0.1%, 0.2% forecast, 0.3% previous.
• US Dec Federal Budget, -23.0 bln, -40.0 bln forecast, -139.0 bln previous.
• Canada taking U.S. NAFTA threat seriously, seeks to end logjam.
• U.S. Republicans say effort to help 'Dreamer' immigrants advances.
• Putin says Kremlin critic Navalny is U.S. pick for the Russian presidency.
• Canada Nov New Housing Price Index, 0.1%, 0.2% forecast, 0.1% p previous.
• In surplus and growing fast, German economy powers on.
• ECB may start tweaking policy message in early 2018: minutes.
Looking Ahead - Economic Data (GMT)
• 11 Jan 21:45 Australia Nov Building Consents, -9.6 previous
• 11 Jan 23:50 Japan Dec ember Bank Lending YY, 2.7% previous
• 11 Jan 23:50 Japan Dec ember Current Account NSA, JPY, 1,836.1 bln forecast, 2,176.4 bln previous
• 12 Jan 02:00 China Jan TR IPSOS PCSI, 70.85 previous
• 12 Jan 02:00 Japan Jan TR IPSOS PCSI, 44.67 previous
• 12 Jan 02:00 Australia Jan TR IPSOS PCSI, 52.00 previous
• 12 Jan 05:00 Japan Economy Watchers Poll SA, 55.1 previous
Looking Ahead - Events, Other Releases (GMT)
• 08:25 Swedish Central Bank Deputy Governor Cecilia Skingsley will discuss the economic situation and current monetary policy – Stockholm
• 20:30 Fed's William Dudley gives a keynote speech – New York
Currency Summaries
EUR/USD is likely to find support at 1.1913 levels and currently trading at 1.2036 levels. The pair has made session high at 1.2058 and hit lows at 1.1935 levels. Euro rose sharply against dollar on Thursday after European Central Bank said it could revisit its communication stance in early 2018, boosting expectations that policymakers are preparing to reduce their vast monetary stimulus programme.With the eurozone seeing its best growth in a decade, the ECB should gradually shift its stance to avoid a more disruptive move later and look at a broader revision of its policy guidance to reduce the focus on bond purchases and raise the emphasis on interest rates, accounts of the ECB's December meeting showed. The euro was up 0.77 percent to $1.2037, on pace for its biggest single-day percentage gain against the greenback in about two months. The dollar index, which measures the greenback against six rival currencies, was down 0.5 percent at 91.78, after falling to a nearly one-week low 91.808.The greenback extended losses after data showed U.S. producer prices fell for the first time in nearly 1-1/2 years in December amid declining costs for services. Weak inflation at the producer level could add to concerns that the factors restraining inflation could become more persistent and result in the Federal Reserve being more cautious about raising interest rates this year.
GBP/USD is supported in the range of 1.3455 levels and currently trading at 1.3529 levels. It reached session high at 1.3555 and dropped to session low at 1.3519 levels. The British pound strengthened against the greenback on Thursday as British pound was dragged higher by stronger euro after minutes of a European Central Bank meeting showed a more aggressive tone, boosting the euro against the U.S. dollar. The December meeting minutes said the central bank should revisit its policy message in early 2018 and gradually adjust its language to reflect improved growth prospects. Investors would probably take a policy message change as a sign that rate-setters may begin to wind down their 2.55-trillion-euro bond-buying program. The dollar weakened more broadly after U.S. data showed a rise in jobless claims and a decrease in producer prices. Data showed U.S. producer prices fell for the first time in nearly 1-1/2 years in December amid declining costs for services. Weak inflation at the producer level could add to concerns that the factors restraining inflation could become more persistent and result in the Federal Reserve being more cautious about raising interest rates this year.
USD/CAD is supported at 1.2478 levels and is trading at 1.2526 levels. It has made session high at 1.2564 and lows at 1.2513 levels. The Canadian dollar was little changed against its U.S. counterpart on Thursday hitting a nearly two-week low earlier in the session as investors weighed chances of a Bank of Canada interest rate hike next week and worried about a U.S. withdrawal from NAFTA.The United States must be taken seriously when it says it might walk away from the North American Free Trade Agreement, Canada's foreign minister said, a day after government sources said Ottawa was increasingly convinced U.S. President Donald Trump would pull the plug on the trade pact. Chances of an interest rate hike next week, which had climbed on recent strong employment figures, have slipped to around 70 percent from nearly 90 percent on Monday, data from the overnight index swaps market showed. The price of oil, one of Canada's major exports, reached multiyear highs despite warnings that a 13 percent rally since early December was close to running its course. The Canadian dollar was last trading flat at C$1.2525 to the greenback. The currency touched its weakest level since Dec. 29 at C$1.2590.
AUD/USD is supported around 0.7832 levels and currently trading at 0.7889 levels. It hit session high at 0.7894 and made session lows at 0.7869 levels. The Australian dollar rose to hit 3-months peak on Thursday as Australian dollar was boosted was boosted by upbeat retail sales data which painted a positive outlook for consumer spending and economic growth, while narrowing the odds on a rate hike this year. The rally came after official data showed retail sales climbed 1.2 percent in November, three times the market forecast and the biggest gain since early 2013.Sales were in large part boosted by demand for new iPhones and Black Friday special offers, so there was a risk of a pullback in December. Yet it still suggested consumer spending had made a sizeable contribution to economic growth for the fourth quarter as a whole, after a disappointing third quarter. The strength comes as a major relief since household spending has been a weak spot in the economy as consumers struggle with sluggish wage growth and record debt levels. The Australian dollar rose to $0.7891, from $0.7842, but shied away from stiff chart resistance at $0.7900.
Equities Recap
European shares dipped on Thursday as a bond market sell-off and a stronger euro took the steam out of the breakneck New Year rally in equities.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.23 percent, Germany's Dax ended down by 0.6 percent, France’s CAC finished the day down by 0.3 percent.
Wall Street surged to record highs on Thursday as rising oil prices lifted energy stocks and investors bet on a strong U.S. corporate earnings season.
Dow Jones closed up by 0.80 percent, S&P 500 ended up 0.70 percent, Nasdaq finished the day up by 0.79 percent.
Treasuries Recap
Treasury yields fell on Thursday after China disputed a report that its government officials had recommended the country slow or halt its purchases of U.S. bonds.
Benchmark 10-year notes gained 6/32 in price to yield 2.53 percent, after rising as high as 2.597 on Wednesday, the highest since March 15.
Commodities Recap
Gold prices on Thursday approached a four-month high set on the previous day after minutes of a European Central Bank meeting showed a more aggressive tone and boosted the euro against the U.S. dollar.
Spot gold was up 0.5 percent at $1,322.74 an ounce by 1:37 p.m. EST (1837 GMT) after touching $1,326.56 on Wednesday, the highest since Sept. 15.
U.S. gold futures for February delivery settled up $3.20, or 0.2 percent, at $1,322.50 per ounce.
Oil prices rose about 1 percent to three-year highs on Thursday, pushing the global Brent benchmark past $70 a barrel, on further signs of tightening supply in the United States and expectations that OPEC's output cuts would underpin the market.
Brent crude futures settled 6 cents higher at $69.26 a barrel, after hitting $70.05 a barrel during the session, its highest level since November 2014. Brent's settlement still represents a three-year closing high.
U.S. West Texas Intermediate (WTI) crude futures settled at $63.80 a barrel, up 23 cents, the highest since December 2014.
