Market Roundup
• U.S. jobless clams 265k vs forecast 264k, previous 275k.
• U.S. adv goods trade deficit USD 65.3 bln vs prev 61.99 bln.
• China expands CFETS index basket, yuan seen weakening vs dollar.
• Brazil's Temer says to pursue tax reform in 2017.
• Mexico central bank unanimous in interest rate hike flags Trump risks-minutes.
• U.S. expels 35 Russian diplomats, closes two compounds - official.
• Chile November manufacturing output down 2.1%, worse than -1.9% forecast.
• Brazil economy sheds 116,747 jobs in November - official
Looking Ahead - Economic Data (GMT)
• 0:30 Australia Private Sector Credit Nov 0.50% -previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0442 levels and currently trading at 1.0483 levels. The pair has made session high at 1.0493 and hit lows at 1.0445 levels. Euro inched against the dollar on Thursday as traders used the quiet holiday period to take profits on the dollar's recent gains, while a drop in U.S. Treasury yields on waning risk appetite reduced the greenback's appeal. Gains came partly as U.S. Treasury yields surged to multi-month and multi-year peaks on a faster-projected pace of Federal Reserve interest rate increases next year and expectations that U.S. President-elect Donald Trump's policies would boost inflation. Yields on most U.S. Treasuries hit at least two-week lows on Thursday, however, halting the dollar's gains by reducing the appeal of higher-yielding U.S. assets compared to those of other countries. The euro was last up 0.71 percent against the dollar at $1.0488 after touching a one-week high of $1.0493 in afternoon trading but was still on track to fall 3.5 percent against the dollar this year.
GBP/USD is supported in the range of 1.2200 levels and currently trading at 1.2265 levels. It reached session high at 1.2267 and dropped to the session low at 1.2217 levels. Sterling declined against dollar on Thursday as sterling was weighted down on uncertainty about Britain's divorce from the European Union. The dollar fell 0.7 percent against a basket of six main currencies, mostly due to the yen's strength and profit-taking after recent gains. The benchmark 10-year U.S. Treasury yield slipped to two-week lows as the bond market sell-off fizzled. The U.S. central bank has signalled that it expected three more increases next year, up from a previous projection of two. Sterling already weak because of Brexit concerns declined in the US session, hitting a low of $1.2222. Sterling was last trading at $1.2261, with analysts attributing the drop to concerns over next year's Brexit negotiations. Investors will look to a full slate of U.S. inflation, manufacturing and employment data in the coming week, culminating in the Jan. 6 release of the monthly U.S. non-farm payrolls report. The bond market will close at 2 p.m. Friday in advance of the New Year's holiday weekend.
USD/CAD is supported at 1.3415 levels and is trading at 1.3504 levels. It has made session high at 1.3556 and lows at 1.3480 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil prices held steady and the greenback slipped in tandem with U.S. bond yields. The U.S. dollar extended its late fall in the previous session after data showed contracts to buy previously owned U.S. homes fell to their lowest level in nearly a year. U.S. crude prices were down 0.24 percent to $53.95 a barrel, while Brent crude added 0.30 percent to $56.39 in thin year-end holiday trading. Both crude oil benchmarks have made big gains this month since OPEC and other producers agreed to curb production in an attempt to balance an over-supplied market. The Canadian dollar was last trading at C$1.3542 to the greenback, or 73.84 U.S. cents, firmer than the Bank of Canada's official close of C$1.3555, or 73.77 U.S. cents.
AUD/USD is supported around 0.7160 levels and currently trading at 0.7210 levels. It hit session high at 0.7223 and made session lows at 0.7191 levels. The Australian dollar edged higher on Thursday in thin holiday trading but stayed near multi-month lows against the greenback. The Australian dollar was up 0.24 percent at $0.7218, bouncing off a seven-month trough of $0.7160 hit last week. The Aussie has fallen in seven out of the last 10 sessions. The Aussie has been particularly hard hit since early November after Donald Trump won the U.S. Presidential elections, sending Treasury yields and the dollar soaring on expectations of stronger U.S. growth and inflation. The U.S. Treasury Department auctioned $34 billion of 5-year notes, which fetched a high yield of 2.057 percent, the highest since April 2011. The auction also yielded the highest bid-to-cover ratio since November 2014 and record high buying from indirect bidders. In commodity markets, oil was mixed after data showed a surprise build in U.S. crude inventories. U.S. crude fell 0.2 percent to $53.95 a barrel, while Brent was last down 0.04 percent at $56.20.
Equities Recap
European shares opened slightly lower on Thursday as miners fell and Italian banks and Credit Suisse led banking shares lower.
The UK's benchmark FTSE 100 closed up by 0.1 percent, FTSEurofirst 300 ended the day down by 0.42 percent, Germany's Dax ended down by 0.03 percent, and France’s CAC finished the down by 0.03 percent.
Wall Street was little changed on Thursday as bank share declines were countered by gains in utilities and other defensive groups in quiet holiday trading as traders looked to position for the new year.
Dow Jones closed down by 0.07 percent, S&P 500 ended down 0.74 percent, Nasdaq finished the day down by 0.13 percent.
Treasuries Recap
U.S. Treasury yields fell across the curve and most hit two-week lows on Thursday as investors bought safe-haven government debt after a strong seven-year note auction on the last full trading day of the year.
The 10-year note was last up 8/32 in price to yield 2.48 percent. Yields earlier fell to 2.46 percent, their lowest level since Dec. 14.
Yields on 30-year Treasury bonds fell to a three-week trough of 3.06 percent after the auction. The long bond retraced that move later and was up 2/32 in price to yield 3.08 percent.
Commodities Recap
Gold prices rose 1 percent to their highest in more than two weeks on Thursday as U.S. bond yields declined on waning risk appetite, reducing the U.S. dollar's appeal against safe-haven currencies such as the Japanese yen.
Spot gold hit $1,159.50 an ounce during the session, the highest since Dec. 14, and was up 1.2 percent at $1,155.45 by 2:32 pm EST (1451 GMT). The metal also notched its biggest daily percentage gain since late September.U.S. gold futures ended the session up 1.5 percent at $1158.1 an ounce.
Oil futures dipped on Thursday after a surprise build in U.S. crude inventories reversed an advance in prices that had boosted the benchmarks to their highest levels since July last year.
U.S. crude futures settled 29 cents, or 0.5 percent, lower at $53.77 a barrel, while Brent crude fell 8 cents, or 0.1 percent, to $56.14 a barrel.
