Market Roundup
• Both sides of Brexit fight suspend campaign after lawmaker Jo Cox shot (dies).
• Implied probability of Remain vote in UK's EU referendum rises to 65 percent– Betfair.
• BoE votes 9-0 to hold rates (as forecast), emphasizes Brexit risks to global economy.
• ECB’s Nowotny: There are agreements b/w ECB & BoE to provide mutual liquidity if needed.
• US CPI m/m gains slow, 0.2% v 0.3% forecast, core steady at 0.2%; rising rents, healthcare costs support U.S. underlying inflation.
• US jobless claims rise more than expected, 277k v 270k forecast;4-wk avg falls.
• IMF: ECB should expand asset purchases if inflation outlook deteriorates.
• ECB’s Mersch: further rate moves would carry increased risks, ECB would be very cautious.
• Clinton considering Warren, not Sanders, for running mate –WSJ.
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand Manufacturing PMI* May 56.5-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1130 levels and currently trading at 1.1237 levels. The pair has made session high at 1.1251 and hit lows at 1.1130 levels. The euro declined initially in the European session against dollar on Thursday, as the dollar rebounded back against euro, following the prior day's unchanged U.S. interest rates by Federal Reserve, but rebounded back strongly after campaigning for Britain's vote on whether to leave the European Union was suspended following the murder of a British lawmaker. Expectations that the U.S. central bank would press ahead with interest rate increases over the summer faded earlier this month after the release of weak U.S. payrolls data for May. On the data front, U.S. consumer prices moderated in May, but sustained increases in housing and healthcare costs kept underlying inflation supported, which could still allow a cautious Federal Reserve to raise interest rates this year. The Labor Department said its Consumer Price Index increased 0.2 percent last month, slowing from April's 0.4 percent gain, the CPI increased 1.0 percent after advancing 1.1 percent in April.
GBP/USD is supported in the range of 1.4009 levels and currently trading at 1.4215 levels. It reached session high at 1.4255 and hit low at 1.4009 levels. British pound initially declined to hit two-month low against the dollar on Thursday, but strongly rebounded as the currency pair found buying interest after British police said Jo Cox, a lawmaker for Britain's opposition labor party, had died after being attacked in the street in northern England. EU referendum campaigns were suspended on Thursday following Cox's killing. Polls in recent weeks had increasingly shown the "Leave" camp gaining steam or moving ahead of "Remain," ramping up uncertainty and driving demand for safe-haven assets like gold and Japanese Yen. Meanwhile, British annual retail sales growth unexpectedly picked up speed in May. The Office for National Statistics said, retail sales volumes rose 6.0 percent in May, the biggest annual rise since September. In early afternoon trading, the euro fell 0.2 percent against sterling on the day at 79.11 pence after hitting a two-month peak of 79.94.Sterling was flat on the day against the dollar at $1.4200 after trading lower for most of the session.
USD/CAD is supported at 1.2900 levels and is trading at 1.2957 levels. It has made session high at 1.3086 and lows at 1.2924 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as the loonie was pressured by lower oil and stock prices as the risk mounted that Britain may leave the European Union. British support for leaving the bloc in a June 23 referendum has risen to 53 percent, a telephone poll showed on Thursday, the highest support recorded by the pollster for the "Leave" or "Brexit" campaign in more than three years. Oil prices fell for a sixth straight day and European shares hit a four-month low, weighing on Canada's risk-sensitive commodity-linked currency. The Canadian dollar hit two-week lows against US dollar and then eased as Britain suspended campaigning over its EU membership status after a deadly attack on a Member of Parliament. Oil pared losses as the sterling rose, but crude tumbled again in post-settlement trade to reach new lows on the day.
USD/JPY is supported around 103.43 levels and currently trading at 104.33 levels. It peaked to hit session high at 104.59 and made session lows at 103.73 levels. The dollar declined against the yen on Thursday after the Bank of Japan held off from further easing its monetary policy and the Federal Reserve struck a cautious tone on the U.S. economy. The Bank of Japan refrained from offering additional monetary stimulus on Thursday despite anaemic inflation and weak global growth, sending the yen spiking to a two-year high. In late trading, the dollar was down 1.6 percent to 104.34 yen. It hit a 22-month low earlier in the session below 104, and kept the market on alert for possible Japan intervention to rein in the yen's recent strength. The yen jumped to its highest in more than three years against the euro and its strongest in nearly two years versus the dollar. The Japanese currency also hit a three-year peak against sterling and a four-year high versus the Australian dollar.
Equities Recap
European shares fell on Thursday, with banking stocks dragging regional equity indexes to touch their lowest point in almost four months in a market dominated by concerns over next week's British vote on European Union membership.
UK's benchmark FTSE 100 closed down 0.08 percent, the pan-European FTSEurofirst 300 ended the day down by 0.39 percent, Germany's Dax ended down 0.4 percent, France’s CAC finished the day down by 0.28 percent.
Wall Street closed higher on Thursday as investors digested the implications of a British lawmaker's death on the country's impending referendum on whether to leave the European Union.
Dow Jones closed up by 0.53 percent, S&P 500 ended up by 0.32 percent, Nasdaq finished the day up by 0.22 percent.
Treasuries Recap
U.S. benchmark Treasury yields fell to their lowest in four years on Thursday after the Bank of Japan's decision overnight not to add stimulus, following the U.S. Federal Reserve's announcement on Wednesday it would keep interest rates steady.
Prices on longer-dated Treasuries, which move opposite to yields, rose for an eighth straight session. But gains were pared in afternoon trading after British politicians responded to the death of Member of Parliament Jo Cox by suspending campaigning for a vote on whether Britain should leave the European Union.
Benchmark 10-year Treasury notes were last up 8/32 in price to yield 1.565 percent. Yields fell as low as 1.518 percent in early trading.
Yields on two- and three-year Treasury notes hit session highs of 0.693 and 0.817, respectively, after the announcement that campaigning would be suspended.
Commodities Recap
Oil prices slumped about 4 percent and hit one-month lows on Thursday, settling down for a sixth straight day, on fears of global economic turmoil if Britain exits the European Union.
Brent crude futures' front-month contract settled down $1.78, or 3.6 percent, at $47.19 per barrel. In post-settlement trade, it fell to as low as $46.94, its lowest since May 12.
The front-month in U.S. West Texas Intermediate (WTI) crude futures settled down $1.80, or 3.8 percent, at $46.21 a barrel. It got to a May 13 low of $45.91 after the close.
Gold turned lower on Thursday, as sterling bounced higher and U.S. stock markets came well off their lows following the suspension of Britain's campaign for next week's referendum after a member of Parliament was shot dead.
Spot gold was down 0.4 percent at $1,285.76 an ounce by 2:40 p.m. EDT (1840 GMT), after rising to $1,315.55 an ounce, the highest since August 2014.
U.S. gold futures for August delivery settled up 0.8 percent at $1,298.40 an ounce.
