Market Roundup
• ECB Weidmann sees longer growth slump, inflation miss
• Trump says wants big trade deal with China or will 'postpone' it
• German Chancellor Merkel: Our goal is an orderly Brexit
• Euro zone growth sticks to lowest rate in four years
• OPEC oil output drops on Saudi cut, outages and sanctions
• Trump considering Herman Cain for Fed board seat, official says
• US 26 Jan w/e Initial Jobless Claims, 253k, 215k forecast, 199k previous
• US 26 Jan w/e Jobless Claims 4-Wk Avg, 220.25k, 215.00k previous, 215.25k revised
• US 19 Jan w/e Continued Jobless Claims, 1.782 mln, 1.713 mln previous
• US Q4 Employment Costs, 0.7%, 0.8% forecast, 0.8% previous
• US Jan Chicago PMI, 56.7, 61.5 forecast, 65.4 previous, 63.8 revised
• US Nov New Home Sales-Units, 0.657 mln, 0.560 mln forecast, 0.544 mln previous, 0.562 mln revised
• US Nov New Home Sales Chg MM, 16.9%, 2.9% forecast, -8.9% previous, -8.3% revised
• CA Nov GDP MM, -0.1%, -0.1% forecast, 0.3% previous
• CA Dec Producer Prices MM, -0.7%, 0.2% forecast, -0.8% previous
Looking Ahead - Economic Data (GMT)
• 31 Jan 23:30 Japan Dec Jobs/Applicants Ratio, 1.63 forecast, 1.63 previous
• 31 Jan 23:30 Japan Dec Unemployment Rate, 2.4% forecast, 2.5% previous
• 01 Feb 00:30 Japan Jan Nikkei Mfg PMI, 50.0 previous
• 01 Feb 00:30 Australia Q4 PPI QQ, 0.8% previous
• 01 Feb 00:30 Australia Q4 PPI YY, 2.1% previous
• 01 Feb 01:45 China Jan Caixin Mfg PMI Final, 49.5 forecast, 49.7 previous
Looking Ahead - Events, Other Releases (GMT)
• 14:45 Dallas Fed's Robert Kaplan participates in moderated question-and-answer session before the Texas Lyceum Public Conference at Austin, Texas
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Thursday, as single currency was weighed down after data showed a deterioration in Italy GDP. Italy's economy contracted for the second consecutive quarter at the end of last year, data showed on Thursday, throwing the country into recession in a setback for the new anti-establishment government.Gross domestic product fell a quarterly 0.2 percent between October and December, following a 0.1 percent decline in the third quarter, and was up 0.1 percent on an annual basis. At 2055 GMT the euro was down 0.30 percent at $1.1444. Immediate resistance can be seen at 1.1427 (50% retracement level), an upside break can trigger rise towards 1.1512 (61.8% retracement level).On the downside, immediate support is seen at 1.1400 (9 DMA), a break below could take the pair towards 1.1374 (23.6% retracement level).
GBP/USD: The pound steadied against greenback on Thursday, as Britain prepared to resume negotiations with the European Union over how to resolve the issue of Irish border arrangements after Brexit. Sterling has strengthened 4 percent this year due to a weaker dollar and expectations that Britain can avoid a no-deal Brexit, a scenario traders see as the worst case scenario for the pound. At 2018 GMT sterling was flat against the dollar at $1.3110, not far off a 3-month high of $1.3214.Immediate resistance can be seen at 1.3161 (Daily High), an upside break can trigger rise towards 1.3196 (23.6% retracement level).On the downside, immediate support is seen at 1.3088 (38.2% retracement level), a break below could take the pair towards 1.3014 (50% retracement level).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Thursday, maintaining its outperformance this month against its peers as oil prices rose and shrugging off data showed an expected contraction in the domestic economy. Canada’s gross domestic product fell by 0.1 percent in November from October, matching estimates, on declines in the wholesale trade sector, as well as finance and insurance, Statistics Canada said. At (2026 GMT), the Canadian dollar was trading nearly unchanged at 1.3138 to the greenback. Immediate resistance can be seen at 1.3183 (61.8% retracement level), an upside break can trigger rise towards 1.3200 (Psychological level).On the downside, immediate support is seen at 1.3126 (50% retracement level), a break below could take the pair towards 1.3065 (23.6% retracement level).
USD/JPY: The U.S. dollar edged higher against the yen on Thursday, as investors sentiment improved on hopes of a resolution to the U.S-China trade dispute. The market is now looking to Friday's U.S. non-farm payrolls report for January, with economists surveyed by Reuters forecasting job gains of 165,000, down from 312,000 in December.The dollar was trading at 108.92 versus the Japanese yen at 113.63. The yen touched a 2-week high of 108.47 on Monday. Strong resistance can be seen at 108.92 (38.2% retracement level), an upside break can trigger rise towards 109.51 (23.6% retracement level).On the downside, immediate support is seen at 108.46 (50% retracement level), a break below could take the pair towards 108.00 (61.8% retracement level).
Equities Recap
European shares ended a choppy trading session flat on Thursday as disappointing economic data, including a technical recession in Italy, gradually sapped an early boost provided by a dovish tone from the U.S. Federal Reserve.
UK's benchmark FTSE 100 closed up by 0.4 percent, the pan-European FTSEurofirst 300 ended the day up by 0.15 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day up by 0.3 percent.
Wall Street extended its rally on Thursday as strong earnings from Facebook Inc added to optimism after the Federal Reserve's dovish remarks the previous day, while investors waited for the outcome of U.S.-China trade talks.
Dow Jones closed down by 0.02 percent, S&P 500 ended up by 0.88 percent, Nasdaq finished the day up by 1.35 percent.
Treasuries Recap
The 30-year Treasury yield fell below 3 percent on Thursday after manufacturing data disappointed and a measure of wage inflation came in weaker than expected, reinforcing the Federal Reserve's suggestion it may need to pause before lifting borrowing costs further.
The yield's decline to below the 3 percent level was its first since Jan. 10, touching a daily low of 2.98 percent. The 10-year yield also fell and was last at 2.63 percent.
Commodities Recap
Gold prices were steady on Thursday, having earlier hit their highest in nine months, after the U.S. Federal Reserve kept interest rates steady and said it would be patient on further hikes, keeping bullion on track for a fourth straight monthly gain.
Spot gold was unchanged at $1,320.48 per ounce at (2115) GMT. The session high was $1,326.30, the highest since April 26.Spot gold has gained nearly 3 percent so far this month.
U.S. crude prices settled lower on Thursday as uncertainty about trade overtook bullish news about production cuts and U.S. monetary policy that drove prices higher early in the session.
WTI crude fell 44 cents a barrel to settle at $53.79.Brent crude futures for March delivery rose 24 cents to $61.89 a barrel.
