Market Roundup
• US Mar Adv Goods Trade Balance, -68.04 bln, -75.88 bln previous.
• US Mar Wholesale Inventories Adv, 0.5%, 1.0% previous.
• US Mar Retail Inventories Advance, -0.1%, 0.2% previous.
• US w/e Initial Jobless Claims, 209k, 230k forecast, 232k previous.
• US w/e Jobless Claims 4-wk Avg, 229.25k, 231.25k previous.
• US w/e Continued Jobless Claims, 1.837 mln, 1.850 mln forecast, 1.863 mlv previous.
• US Apr KC Fed Manufacturing, 33, 20 previous.
• US Apr KC Fed Composite Index, 26, 17 previous.
• Keen to end stimulus, ECB hails solid economic growth.
• U.S. judge rules 'special master' to review seized Trump lawyer documents.
• White House doctor steps back from Trump veterans job after controversy.
• Pompeo becomes U.S. secretary of state as Iran, N. Korea issues await.
• British PM May feels more heat over EU's customs union.
• Ahead of Merkel trip to U.S., Germany downbeat on trade tariffs
Looking Ahead - Economic Data (GMT)
• Apr 26 22:45 New Zealand Mar Trade - Imports , 4.2 bln previous
• Apr 26 22:45 New Zealand Mar Trade balance, 217 mln previous
• Apr 26 22:45 New Zealand Mar Trade balance YY, -3.02 bln previous
• Apr 26 22:45 New Zealand Mar Trade exports, 4.46 bln previous
• Apr 26 23:30 Japan Apr CPI Core Tokyo YY, 0.8% forecast, 0.8% previous
• Apr 26 23:30 Japan Apr CPI, Overall Tokyo, 1.0% previous
• Apr 26 23:30 Japan Mar Jobs/ Applicants Ratio, 1.59 forecast, 1.58 previous
• Apr 26 23:30 Japan Mar Unemployment Rate, 2.5% forecast, 2.5% previous
• Apr 26 23:50 Japan Mar Industrial output Prelim MM, 0.5% forecast, 2.0% previous
• Apr 26 23:50 Japan Apr IP Forecast 1 Mth Ahead, 0.9% previous
• Apr 26 23:50 Japan May IP Forecast 2 Mth Ahead, 5.2% previous
• Apr 26 23:50 Japan Mar Retail Sales YY, 1.7% forecast, 1.6% previous
• 01:30 Australia Q1 PPI QQ, 0.6% previous
• 01:30 Australia Q1 PPI YY, 1.7% previous
• 05:00 Japan Mar Construction Orders YY, 19.2% previous
• 05:00 Japan Mar Housing Starts YY, -5.4% Rtrs f'cast, -2.6% previous
Looking Ahead - Events, Other Releases (GMT)
• 06:00 Deputy governor of the Riksbank Cecilia Skingsley participates in a panel call in Stockholm
• 08:00 Speeches by president of the Swiss National Bank Council Jean Studer and Swiss National Bank Chairman Thomas Jordan in Bern
• 14:00 Bank of England Governor Mark Carney will speak at the launch of the EconoME programme in London
Currency Summaries
EUR/USD is supported at 1.2020 levels and currently trading at 1.2104 levels. The pair has made session high at 1.2208 hit lows at 1.2098 levels. The euro declined sharply against US dollar on Thursday after ECB President Mario Draghi hailed "solid" euro zone growth but kept rates unchanged. The euro fell to its lowest since mid-January at $1.2100 after the European Central Bank announced its decision to keep monetary policy unchanged. The single currency had initially rebounded after Draghi played down concern over recent softness in data, but fell as the market digested the news and the U.S. dollar rallied. The euro has been weakening all week, after a bounce in U.S. Treasury yields fired up dollar-buying and encouraged some to question whether the euro's rally since last year had run out of steam. After a strong run into February, the euro has since been stuck in a trading range against a dollar, as investors lowered expectations of the ECB moving rapidly towards the end of its monetary stimulus program. The U.S. dollar continued its eight-day rally, rising to 91.510, its highest since Jan. 12, against a basket of six currencies .The greenback was bolstered by strong economic data, as well as by the 10-year Treasury benchmark yield breaching the three percent threshold for the first time in four years earlier in the week.
GBP/USD is supported in the range of 1.3383 levels and currently trading at 1.3918 levels. It reached session high at 1.3997 and dropped to session low at 1.3902 levels. Britain's pound declined to five-week low against the dollar on Thursday as investors grew wary about the outlook for the British currency before a central bank meeting next month and the dollar consolidated gains after a sharp rally this week. The British currency edged 0.1 percent lower at $1.3915, taking its losses so far this month to more than half a percent. While the magnitude of the losses are not big, sterling's weakness in April is a concern because historically it has proved to be a strong seasonal factor for the currency. The release will be the last key data issued before the Bank of England's Monetary Policy Committee meeting early next month, and markets are split over whether the central bank will raise interest rates after the central bank chief dampened expectations of a hike. Governor Mark Carney dented confidence that a rate hike would happen when he said last week that Britain's economic data was "mixed" and that there were several other MPC meetings later this year. Market expectations for a rate hike have slipped back to a more uncertain 50 percent from an almost certain 80 percent a couple of weeks ago, according to swap markets.
USD/CAD is supported at 1.2809 levels and is trading at 1.2880 levels. It has made session high at 1.2882 and lows at 1.2821 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as stronger dollar offset higher oil prices and upbeat domestic employee earnings data. The price of oil, one of Canada's major exports, was supported by expectations of renewed U.S. sanctions on Iran, declining output in Venezuela and continuing strong demand. Canadian average weekly earnings of non-farm payroll employees rose 3.4 percent in February from the same month last year, led by the accommodations and food services sectors, Statistic Canada said. Bank of Canada Governor Stephen Poloz has said that he expects wages to pick up as job vacancies continue to grow and for more people to be then encouraged to enter the workforce. On Wednesday, Poloz said the economy was "finally positive" after a long adjustment to a sharp fall in oil prices, but he added there was still softness in several areas of the country. The Canadian dollar was last trading 0.1 percent lower at 1.2877 to the greenback. The currency traded in the range of C$1.2883 to C$1.2821. On Wednesday, the loonie touched C$1.2897, its weakest in more than three weeks.
AUD/USD is supported around 0.7500 levels and currently trading at 0.7550 levels. It hit session high at 0.7588 and made session lows at 0.7545 levels. Australian dollar hit four month lows against greenback on Thursday as rising Treasury yields supported its U.S. counterpart while suppressing risk appetite globally. The Australian dollar dipped as low as $0.7545, a level last reached in December 2017. It was last trading at $0.7550. The rise in U.S. 10-year yields above the psychological 3 percent level has alarmed investors, particularly those in emerging markets. Treasury yields act as a benchmark for global rates so the increase is pushing up borrowing costs for some countries. Higher yields also risk attracting funds to U.S. debt and away from emerging markets while making equities look more expensive in comparison. As a commodity-sensitive currency the Aussie is often used as a proxy for global growth and risk, leading investors to short it at times of uncertainty. The technical background has also turned bearish after the Aussie breached a major trendline stretching from early 2016 which had provided support around $0.7625/50.
Equities Recap
Encouraging results and a fall in the euro boosted European stock markets on Thursday, while earnings disappointments weighed on some stocks including Germany's Lufthansa and Kion.
UK's benchmark FTSE 100 closed up by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.89 percent, Germany's Dax ended up by 0.6 percent, France’s CAC finished the day up by 0.8 percent.
U.S. stocks advanced on Thursday with each of Wall Street's major indexes ending the session up 1 percent or higher, boosted by solid earnings results and a rebound in technology stocks as U.S. bond yields pulled back.
Dow Jones closed up by 0.99 percent, S&P 500 ended up 1.05 percent, Nasdaq finished the day up by 1.65 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday, with the 10-year yield dipping below 3 percent as buyers emerged following a week-long selloff spurred by concerns about rising inflation and growing borrowing by the U.S. government.
The 10-year Treasury yield was down nearly 3 basis points at 2.996 percent. It touched 3.035 percent on Wednesday, which was its highest since January 2014.
The two-year yield was marginally higher at 2.492 percent after peaking at 2.508 percent the prior day, a level last seen in September 2008.
The 30-year yield was down 3 basis points at 3.178 percent. It reached a two-month high at 3.219 percent on Wednesday.
Commodities Recap
Gold prices hovered near five-week lows on Thursday as a stronger U.S. dollar and lofty U.S. bond yields dampened interest in bullion.
Spot gold dropped 0.4 percent at $1,317.31 per ounce by 1:40 p.m. EDT (1740 GMT), while U.S. gold June futures settled down $4.90, or 0.4 percent, at $1,317.90.
Oil prices gained on Thursday as the risk of renewed U.S. sanctions on Iran, plunging Venezuelan output, and robust global demand shook off the effects of a strong dollar.
Global benchmark Brent crude futures gained 74 cents to settle at $74.52 a barrel, while U.S. West Texas Intermediate (WTI) crude were up 14 cents to $68.19 a barrel.
