Market Roundup
•US Indexes: Dow slips 0.26%, S&P off 0.08%, Nasdaq up 0.41%
• Energy stocks down as oil slumps to pre-Ukraine war level
• Eyes on Friday's nonfarm payrolls report
•China holds military exercises after U.S. official visits Taiwan
• U.S. weekly jobless claims increase
• US Imports 340.40B,341.40B previous
•US Exports 260.80B,255.90B previous
•US Continuing Jobless Claims 1,416K,1,370K forecast, 1,359K previous
•US Initial Jobless Claims 260K,259K forecast, 256K previous
•US Jobless Claims 4-Week Avg. 254.75K, 249.25K previous
•Canada Jun Building Permits (MoM) -1.5%,-1.5% forecast, 2.3% previous
•US Jun Trade Balance -79.60B,-80.10B forecast, -85.60B previous
•Canada Jun Imports 64.86B, 63.11B previous
•US 8-Week Bill Auction 2.280%, 2.210% previous
• US 4-Week Bill Auctio 2.110%, 2.140% previous
Looking Ahead - Economic Data (GMT)
•05:00 Japan Jun Leading Index (MoM) -1.7% previous
•05:00 Japan Jun Coincident Indicator (MoM) -1.9% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro strengthened against dollar on Thursday as the positive impact of hawkish Federal Reserve comments faded and investors waited for more signs on the data front to confirm that more large rate hikes to curb inflation were coming. Fed officials have continued to push back against the perception that U.S. interest rates were close to peaking. San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari voiced their determination overnight to rein in high inflation. But the impact of the hawkish rhetoric on the dollar appeared to be fading, with the currency in a more defensive mood. The dollar index , which measures its performance against six peers, was at 106.36, down about 0.2%. The euro was up at $1.0246. Immediate resistance can be seen at 1.0252(38.2%fib), an upside break can trigger rise towards 1.0292(Higher BB).On the downside, immediate support is seen at 1.0157(21DMA), a break below could take the pair towards 1.0095(23.6%fib).
GBP/USD: Sterling initially dipped on Thursday but recovered ground as investors reacted to the Bank of England's interest rate decision. The Bank of England raised its benchmark rate by half-a-percentage point given the more persistent inflationary pressures and the tight labor market conditions. The monetary policy committee of the central bank voted 8-1 to lift the bank rate by 50 basis points to 1.75%, the highest rate since December 2008. This was the sixth consecutive rate hike.The committee also decided to sell the stock of gilts purchased by the central bank, starting September. The bank intends to reduce government bond holdings of around GBP 10 billion per quarter. Immediate resistance can be seen at 1.2190(38.2%fib), an upside break can trigger rise towards 1.2258(Higher BB).On the downside, immediate support is seen at 1.2100(14DMA),a break below could take the pair towards 1.2066(23.6%fib).
USD/CAD: The Canadian dollar edged lower against its broadly weaker U.S. counterpart on Thursday as a drop in oil prices offset data showing that Canada’s trade surplus widened in June . U.S. crude oil futures settled down 2.3% at $88.54 a barrel, the lowest level since before Russia’s invasion of Ukraine in February. Canada’s trade surplus widened to C$5.1 billion ($4.0 billion) in June, beating analyst expectations, as exports rose 2%. The loonie was trading 0.1% lower at 1.2868 to the greenback , after moving in a range of 1.2819 to 1.2876.Canada’s employment report for July, due on Friday, could offer further clues on the strength of the domestic economy. Immediate resistance can be seen at 1.2893(38.2%fib), an upside break can trigger rise towards 1.2971 (23.6% fib).On the downside, immediate support is seen at 1.2853 (14DMA), a break below could take the pair towards 1.2816(50%fib).
USD/JPY: The dollar dipped against yen on Thursday as recession worries intensified following the Bank of England’s warning of a drawn-out downturn and ahead of key a hotly anticipated U.S. employment report on Friday. Cleveland Federal Reserve Bank President Loretta Mester said on Thursday that the economy is not currently in recession, but the risks of one have risen, while reiterating the central bank’s resolve to continue with aggressive tightening until there is compelling evidence of a let up in inflation. The monthly U.S. non-farm payrolls report will be closely watched on Friday for clues on whether the tight labor market will continue to push up wages. Data early Thursday showed a tick up in jobless claims. Strong resistance can be seen at 133.90 (23.6%fib), an upside break can trigger rise towards 134.00(Psychological level).On the downside, immediate support is seen at 132.68 (38.2%fib), a break below could take the pair towards 131.38(50%fib).
Equities Recap
European stocks closed higher on Thursday after a somewhat volatile session, as investors reacted to the Bank of England's interest rate decision, and the latest batch of earnings updates, in addition to looking ahead to the upcoming U.S. non-farm payroll data, due on Friday..
UK's benchmark FTSE 100 closed up by 0.03 percent, Germany's Dax ended up by 0.55 percent, France’s CAC finished the day up by 0.64percent.
Wall Street's main indexes ended mixed in a dull session on Thursday as gains in high-growth stocks offset losses in energy shares, with investors looking ahead to monthly jobs report for clues on the pace of interest rate hikes by the Federal Reserve.
Dow Jones closed down by 0.26% percent, S&P 500 closed down by 0.08% percent, Nasdaq settled up by 0.41% percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday, as a gloomy outlook from the Bank of England fueled global recession concerns while investors readied for U.S. jobs data to wrap up what had been a volatile week for the bond market.
The yield on 10-year Treasury notes was down 5.3 basis points to 2.696%.The yield on the 30-year Treasury bond was up 0.3 basis points to 2.980%.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 5.9 basis points at 3.049%.
Commodities Recap
Gold prices climbed over 1% to hit a fresh one-month peak on Thursday, underpinned by a retreat in the dollar and U.S. Treasury yields, as investors kept a close tab on U.S.-China tensions.
Spot gold rose 1.6% to $1,792.19 per ounce by 1:56 p.m. ET (1756 GMT), having risen to its highest since July 5 earlier. U.S. gold futures settled 1.7% higher at $1,806.90.
Oil prices dropped on Thursday to their lowest levels since before Russia's February invasion of Ukraine, as traders fretted over the possibility of an economic recession later this year that could torpedo energy demand.
Benchmark Brent crude futures settled down $2.66, or 2.75%, at $94.12, the lowest close since Feb. 18. West Texas Intermediate (WTI) crude futures settled down $2.34, or 2.12%, at $88.54, the lowest close since Feb. 2.
