Market Roundup
• US Initial Jobless Claims w/e 234k vs 238k forecast, 233k previous.
• US Jobless Claims 4-wk Avg 235.25k, 241k previous.
• US Continued Jobless Claims w/e 1.923m vs 1.925m forecast, 1.899m previous.
• US KC Fed Comp Index May 8, 7 previous.
• US Adv Goods Trade Balance Apr -67.55b, -65.05b previous.
• US Adv Wholesale Inventory Apr -0.3, +0.1 previous.
• US Adv Retail Inventory Ex Auto -0.2, +0.2 previous.
• OPEC, non-OPEC extend oil output cut by 9 months to fight glut.
• Oil prices fall 4 pct on lack of deeper cuts, longer duration.
• Fed's Brainard (dove): global economy "brighter," less risk to Fed outlook.
• U.S. Commerce Sec seeks bigger budget for trade enforcement.
• Mnuchin says with regard to tax reform plans, we do not support slowing depreciation.
• Goldman Sachs pares US Q2 GDP view to 2.8% from 3.0% following April econ data.
• JPMorgan economist: Fed balance sheet trimming to start in Dec with modest roll-off
caps.
• UK Q1 GDP growth revised down to +0.2% vs Q4 +0.7%.
• Mexico factory exports fall in April by most in 3 months.
• Central banks launch new FX code, aim at universal adoption.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan CPI Core Nationwide YY Apr 0.4% forecast, 0.2% previous
• 23:50 Japan CPI Overall Nationwide Apr 0.2% previous
• 23:50 Japan CPI Index Ex-Fresh Food Apr 99.8 previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1158 levels and currently trading at 1.1211 levels. The pair has made session high at 1.1226 and hit lows at 1.1194 levels. The euro traded sideways against the dollar on Thursday after the Federal Reserve dialled down some expectations that it would hike interest rates soon. Fed policymakers agreed they should hold off on raising rates until they see evidence a recent U.S. economic slowdown was transitory, though most said a hike was coming soon, the minutes from their last policy meeting showed on Wednesday. Traders interpreted the minutes as a cautionary sign from the U.S. central bank, dialing back bets that it would increase rates at a fast pace in the coming months. Data showing the number of Americans filing for unemployment benefits rising less than expected last week and the four-week moving average of claims falling to a 44-year low, suggesting further tightening in the labor market, had little impact on the dollar. The greenback was little changed against the euro.
GBP/USD is supported in the range of 1.2920 levels and currently trading at 1.2940 levels. It reached session high at 1.2966 and dropped to session low at 1.2931 levels. Britain's pound declined against the dollar on Thursday after data showed Britain's economy slowed more than previously thought in the first quarter of this year. The dip in the growth of gross domestic product just 0.2 percent compared with an earlier estimate of 0.3 percent - was minimal, but along with the more detailed breakdown of the numbers added to signs the economy is beginning to struggle a year after Britain's shocking vote to leave the European Union. Most economists had forecast the rate of growth would stay unchanged after marking a steep slowdown from the rapid 0.7 percent pace achieved in the final three months of 2016. The pound, which hit a day's high at $1.3012, fell 0.3 percent in the late US session to trade at $1.2940. The pound was also weakened by polls at the start of the week showing a halving of Prime Minister Theresa May's lead in campaigning for a June 8 election which has been interrupted by a bombing in Manchester.
USD/CAD is supported at 1.3338 levels and is trading at 1.3471 levels. It has made session high at 1.3491 and lows at 1.3404 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday pulling back from a five-week high as oil prices fell after OPEC signaled it would go no further with production cuts than markets previously expected. Oil prices tumbled 5 percent as the extension of output curbs by OPEC and other producing countries disappointed investors who had hoped for larger cuts, leading to the biggest daily percentage slide in crude prices since early March. On Wednesday, the Bank of Canada was more upbeat about the economy than some investors had expected as it left interest rates unchanged at 0.5 percent. The central bank reiterated its position that excess capacity remains in the economy, but it dropped a reference to slack being "material" and noted strong spending by Canadians along with a housing boom and job growth. The Canadian dollar was down 0.4 percent at C$1.3481 to the greenback. The currency's weakest level of the session was C$1.3482, while it touched its strongest since April 19 at C$1.3388.
USD/JPY is supported around 111.30 levels and currently trading at 111.76 levels. It peaked to hit session high at 111.93 and made session lows at 111.63 levels. The U.S. dollar inched higher against the Japanese yen on Thursday as markets became less concerned as dollar steadied against a basket of major currencies on Thursday, a day after Federal Reserve minutes that dialed down some expectations of the central bank hiking interest rates soon. The dollar index, which tracks the greenback against six major rivals, was down 0.04 percent to 97.197, after falling as low as 96.88 earlier. Wednesday's release of minutes from the Fed's last policy meeting showed policymakers agreeing they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming soon. On the data, the number of Americans filing for unemployment benefits rose less than expected last week and the four-week moving average of claims fell to a 44-year low, suggesting further tightening in the labor market.
Equities Recap
European shares struggled for direction on Thursday with investors hunting for fresh catalysts as a blistering earnings season that helped stocks surge to new highs nears its end.
UK's benchmark FTSE 100 closed up by 0.4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.07, Germany's Dax ended down by 0.21percent, France’s CAC finished the day down by 0.15 percent.
The S&P 500 and Nasdaq hit record closing highs on Thursday, with the market propped up by gains in the consumer discretionary sector after strong reports from Best Buy and other retailers.
Dow Jones closed up by 0.32 percent, S&P 500 ended up 0.44 percent, Nasdaq finished the day up by 0.69 percent.
Treasuries Recap
U.S. Treasury yields fell slightly on Thursday on doubts whether the Federal Reserve would raise interest rates more than once by the end of 2017 as it signaled it is preparing to shrink its $4.5 trillion balance sheet later this year.
The benchmark 10-year Treasury yield was 2.254 percent, down 1 basis point from late on Wednesday. It has bounced in a narrow 7 basis point range so far this week.
Commodities Recap
Oil prices tumbled 5 percent on Thursday as the extension of output curbs by OPEC and other producing countries disappointed investors who had hoped for larger cuts, leading to the biggest daily percentage slide in crude prices since early March.
Brent crude oil down $2.50, or 4.6 percent at $51.46 a barrel. U.S. West Texas Intermediate crude futures ended at $2.46 lower, or 4.8 percent, at $48.90 a barrel, breaking below $50 for the first time all week.
Gold eased on Thursday as the dollar came off its lows and world stock markets scaled fresh highs, giving back some gains from the prior session when U.S. Federal Reserve minutes suggested it could be more cautious with interest rate increases.
Spot gold was down 0.2 percent at $1,255.91 an ounce by 3:32 p.m. ET (1932 GMT), while U.S. gold futures settled up 0.3 percent at $1,256.40.
