Market Roundup
- U.S. jobless claims fall to 262k (-7k) as labor market tightens, 4-week MA -8k to 273.5k.
- Philly Fed business conditions -2.8 vs -3 forecast, new orders, prices paid & employment lower.
- Canada Dec wholesale trade climbs 2.0 percent on autos.
- ECB sees increased risks (China & low inflation), some pressing for pre-emptive action.
- Crude oil inventories up 2.1 mmb, gas up as well; inventories remain at historically high levels.
- Yen inches higher as oil rises, sterling up on EU deal hopes Juncker quite confident on deal.
- Mexico FinMin Videgaray: peso could appreciate further.
- Despite unanimous vote to hold Banxico discussed possible interest rate rise in early Feb.
Looking Ahead - Economic Data (GMT)
- 23:30 Japan Reuters Tankan DI Feb 6-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summary
EUR/USD is likely to find support at 1.1070 levels and currently trading at 1.1094 levels. The pair has made session high at 1.1122 and hit lows at 1.1071 levels. The dollar rose against euro on Thursday, bolstered by an increase in risk appetite amid a continued recovery in oil prices that has led a rally in some global stock markets. Normally improved risk appetite is broadly negative for the euro. The low-yielding euro tends to struggle in times of increased risk appetite because it is often used to fund investment in risky assets. It consequently rises when there is a retreat from those assets during periods of market stress. The dollar index has risen in two of the last three sessions, more or less in line with the rebound in oil prices. U.S. crude futures have advanced during three of the last four trading days. The euro slipped 0.13 percent versus the greenback at $1.1113 and the yen was up 0.54 percent against the dollar at 113.46.
GBP/USD is supported in the range of 1.4254 and currently trading at 1.4323 levels. It reached session high at 1.4380 and hit low at 1.4310 levels. Sterling inched higher against dollar on Thursday as the pair was helped by tentative signs that a deal will be reached at a summit where Britain is seeking more favourable terms for its EU membership. Prime Minister David Cameron said on Thursday that hard work and goodwill should help him to clinch a deal at the summit, described by leaders of the 28-nation bloc as the best chance of preventing Britain leaving. In the late American trading hours sterling was up 0.4 percent at around $1.4340, having fallen to as low as $1.4235 on Wednesday, its weakest level since Feb. 1. Against the euro, it was half a percent higher at 77.40 pence.
USD/CAD is supported at 1.3640 levels and is trading at 1.3744 levels. It has made session high at 1.3747 and lows at 1.3667levels. The Canadian dollar rose to hit two-week high against U.S. dollar on Thursday as crude oil prices rebounded still further, while domestic economic data printed better figures than anticipated. Oil extended its rally after Iran welcomed plans by Russia and Saudi Arabia to freeze output and an industry report showed a surprise drop in U.S. inventories. Expectations for further easing by the Bank of Canada have diminished as crude oil prices have rallied. The implied probability of a rate cut by year-end has dropped to 65 percent, while as recently as Feb. 12, a 25 basis point cut had been fully implied. Canadian wholesale trade rose 2.0 percent in December from November, more than expected, on record sales in the motor vehicle and parts sector, data from Statistics Canada showed. The currency touched its strongest since Feb. 4 at C$1.3654, while its weakest level was C$1.3710.
AUD/USD is supported around 0.7110 levels and currently trading at 0.7154 levels. It hit session high at 0.7157 and made session lows at 0.7127 levels. The Australian dollar firmed against dollar on Thursday, having recovered from soft Australian employment data. Economic data provided some relief about U.S. growth. Data showed the number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to labor market strength. Meanwhile, oil prices have slid, the stock market's performance has been tightly tied to the commodity. In a second report, the Philadelphia Fed index showed an increased reading of -2.8 this month from -3.5 in January. The index has been now been negative for six consecutive months. The Aussie rallied by more than 1 percent overnight after a jump in oil prices underpinned the commodity currency block. A break above $0.7187 would target $0.7242.
Equities Recap
European equities fell back after climbing to a two-week high on Thursday, as support from gains in tech shares was counteracted by a decline in commodity related stocks in the energy and mining sectors.
UK's benchmark FTSE 100 closed down by 2.71 percent, the pan-European FTSEurofirst 300 ended the day down by 0.18 percent, Germany's Dax closed up at 0.9 percent, and France's CAC finished the day up by 0.1 percent.
Wall Street edged lower on Thursday as Wal-Mart shares dragged on major stock indexes after a lackluster earnings report and investors locked in gains after a three-day rally.
Dow Jones closed down by 0.26 percent, S&P 500 ended the day down by 0.50 percent, Nasdaq finished the day down by 1.04 percent.
Treasuries Recap
U.S. Treasury prices jumped on Thursday, with benchmark yields retreating from 1-1/2 week highs, as a three-day rally in Wall Street stocks leveled off, reviving some demand for low-yielding government bonds.
Benchmark 10-year Treasury notes last traded up 16/32 in price for a yield of 1.760 percent, down 6 basis points from late on Wednesday.
The 30-year bond was last 29/32 higher in price, yielding 2.639 percent, down nearly 5 basis points from Wednesday's close. Last week, the 30-year yield hit 2.38 percent, the lowest in a year.
Commodities recap
Gold prices rose just over 2 percent on Thursday, reversing earlier losses and lifting silver, as U.S. equities resumed their downward spiral, renewing bullion's safe-haven appeal that has spurred the market's biggest rally in years.
Spot gold was up 2.1 percent at $1,234.50 an ounce at 2:57 EST (1957 GMT), after steadily rising $35 off the intraday lows. The recovery put it closer to the one-year highs around $1,260 hit a week ago.
U.S. gold futures for April delivery settled up 1.2 percent at $1,226. settled lower on Thursday after data showing U.S. crude inventories rose to record highs overshadowed production freeze plans by oil major producers that had sharply boosted the market this week.
Brent, the global benchmark for crude, settled down 22 cents at $34.28 a barrel, having risen more than $1.20 before the data. It had gained a total of more than $4 between Friday and Wednesday.
U.S. crude settled up by a modest 11 cents at $30.77 a barrel, after an earlier peak at $31.98.
