Market Roundup
• US Initial Jobless Claims w/e, 298k, 241k forecast, 236k previous.
• US Jobless Claims 4-Wk Avg w/e, 250.25k, 236.75k previous.
• US Continued Jobless Claims w/e, 1.940M, 1.950M forecast, 1.942M previous.
• US Labor Cost Revised Q2, 0.2%, 0.3% forecast, 0.6% previous.
• US Productivity Revised Q2, 1.5%, 1.3% forecast, 0.9% previous.
• CA Building Permits MM Jul, -3.5%, -1.5% forecast, 2.5% previous.
• CA Ivey PMI Aug, 56.8, 52.9 previous.
• CA Ivey PMI SA Aug, 56.3, 60.0 previous.
• Trump turns again to Democrats on debt ceiling, immigration.
• Mnuchin, Ryan see the passage of US tax overhaul by end of year.
• Euro strength worries ECB as Oct stimulus decision looms.
• Fed's Mester sees gradual rate hikes as helping amid uncertainty.
• Hurricane Irma kills 10, may hit Florida Sunday as Category 4.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Manufacturing Sales Q2, -0.3% previous
• 23:50 Japan Current Account NSA JPY Jul, 2,058.6B forecast, 934.6B previous
• 23:50 Japan GDP Rev QQ Annualised Q2, 2.9% forecast, 4.0% previous
• 23:50 Japan GDP Rev QQ Q2, 0.7% forecast, 1.0% previous
• 23:50 Japan GDP Cap Ex Rev QQ Q2, 0.5% forecast, 2.4% previous
• 01:30 Australia Housing Finance Jul, 1.0% forecast, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 12:45 Fed’s Harker speaks at Conf. in Philadelphia, Pennsylvania
Currency Summaries
EUR/USD is likely to find support at 1.1930 levels and currently trading at 1.2019 levels. The pair has made session high at 1.2057 and hit lows at 1.1932 levels. The euro rose sharply against the greenback on Thursday as the European Central Bank broadly stuck to its outlook for growth and inflation while outlining concerns about the single currency's strength. ECB President Mario Draghi pointed to a broadly unchanged outlook for the euro zone but said several times that the euro's strength was a risk to that outlook. The euro initially surged after Draghi said the bank was keeping its growth and inflation forecasts broadly unchanged. It fell back almost immediately by just under a full cent from those highs when he added that recent volatility in the exchange rate was a source of uncertainty and had contributed to a trimming of some of the bank's inflation forecasts. It later recovered back above $1.20 and helped push the dollar index to its weakest since January 2015. The single currency, which is up less than 5 percent on a trade-weighted basis, rose as high as $1.2059. It held most of its gains, it was last trading at $1.2001, up 0.9 percent on the day.
GBP/USD is supported in the range of 1.3000 levels and currently trading at 1.3096 levels. It reached session high at 1.3114 and dropped to session low at 1.3057 levels. Sterling jumped above $1.31 against dollar on Thursday for the first time since early August, pulled up by a euro that was stronger across the board on the view that the head of the European Central Bank had not tried to strongly talk down the euro. With the euro trading around its strongest levels since January 2015 against the dollar, and with banks such as Morgan Stanley calling for the euro to reach parity with the pound in the coming months, there had been much market chatter that ECB chief Mario Draghi would try to knock the currency. But though he talked about the downward effect on inflation from euro strength, Draghi did not send a strong signal that the bank was ready to intervene to weaken the euro should it continue to strengthen and push down price growth. The euro climbed to 92.035 pence after the ECB press conference, about a penny away from an 11-month high touched against sterling last week.
USD/CAD is supported at 1.2100 levels and is trading at 1.2127 levels. It has made session high at 1.2173 and lows at 1.2115 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as the market weighed prospects of additional Bank of Canada interest rate hikes and the greenback lost ground against a basket of major currencies. The Bank of Canada struck a more confident approach to economic growth on Wednesday with its second rate hike in three months, pushing to the front of the pack of major central banks including the U.S. Federal Reserve. The central bank has now taken back two cuts it delivered in 2015 to offset the impact on the economy of a sharp drop in the price of oil, one of Canada's major exports. Market players have been weighing prospects of additional hikes. Oil prices dipped but hovered near 3-1/2-month highs as U.S. refiners restarting after Hurricane Harvey increased their crude processing and as the U.S. dollar declined.The Canadian dollar was trading at C$1.2138 to the greenback, or 82.20 U.S. cents, up 0.5 percent. The loonie's weakest level of the session was C$1.2241, while it touched its strongest since June 2015 at C$1.2115.
USD/JPY is supported around 108.00 levels and currently trading at 108.46 levels. It peaked to hit session high at 108.71 and made session lows at 108.03 levels. The dollar declined against the yen on Thursday as weak U.S. jobs data and worries about the impact of hurricanes Irma and Harvey on the world's largest economy stoked demand for safe-haven Japanese yen. The number of Americans filing for unemployment benefits jumped to its highest level in more than two years last week amid a surge in applications in hurricane-ravaged Texas. The weak data helped push the dollar index down to 91.405, the lowest since January 2015. The dollar also fell as traders grew uncomfortable with the outlook for U.S. fiscal policy once a three-month extension to the U.S. debt limit that U.S. President Donald Trump said he agreed to Wednesday expires. The dollar fell more than 0.6 percent against the safe-haven yen and was last trading at 108.48 yen.
Equities Recap
European shares closed in positive territory on Thursday after the European Central Bank reaffirmed its ultra-easy policy stance and said details on the future of its massive stimulus would come in October.
UK's benchmark FTSE 100 closed up by 0.6 percent, the pan-European FTSEurofirst 300 ended the day up by 0.25 percent, Germany's Dax ended up by 0.7 percent, France’s CAC finished the day up by 0.3 percent.
Wall Street edged lower on Thursday as media stocks weighed after negative business updates from Walt Disney and Comcast and as another powerful storm neared the United States.
Dow Jones closed down by 0.10 percent, S&P 500 ended down 0.02 percent, Nasdaq finished the day up by 0.07 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday, as weak U.S. jobless claims data and worries about the impact of hurricanes Irma and Harvey on the world's largest economy stoked safe-haven demand for government debt.
The benchmark 10-year Treasury yields fell to 2.049 percent, from 2.106 percent late on Wednesday. Ten-year yields fell to their lowest since Nov. 10.
U.S. 30-year bond yields dropped to 2.663 percent, down from 2.723 percent the previous session and also the lowest since November.
Commodities Recap
The price of gold rose to a one-year peak on Thursday after the dollar tumbled on the back of weak U.S. jobs data and an unchanged growth and inflation outlook from the European Central Bank.
Spot gold climbed to an intraday peak of $1,345.25 an ounce, the strongest since September 2016, before paring gains to $1,341.54 by 1340 GMT, a rise of 0.6 percent. It eased 0.3 percent in the previous session. U.S. gold futures for December delivery rose 0.6 percent to $1,346.80.
Oil futures were mixed on Thursday, with Brent rising to a 5-1/2 month high while U.S. crude slipped on a bigger-than expected crude stock build, as the restart of U.S. refiners after Hurricane Harvey was countered by the threat of Hurricane Irma.
U.S. crude oil futures settled 0.14 percent, or 7 cents, lower at $49.09 per barrel. Brent was last at $54.45, up 0.46 percent.
