Market Roundup
• US Initial Jobless Claims w/e 247k, 245k forecast, 250k previous.
• US Jobless Claims 4-Wk Avg w/e 245.75k, 243.50k previous.
• US Continued Jobless Claims w/e 1.945m, 1.950m forecast, 1.965m previous.
• US PPI Final Demand YY Jun 2.0%, 1.9% forecast, 2.4% previous.
• US PPI Final Demand MM Jun 0.1%, 0.0% forecast, 0.0% previous.
• US Federal Budget, $ Jun -90b, -35.00b forecast, -88.0b previous.
• Fed’s Yellen: 3% US growth "quite challenging" in coming years.
• Yellen: Fed will take steepening of yield curve into account in interest rate policies.
• Fed's Kaplan urges patience on rate hikes citing low inflation.
• Kaplan: Will be appropriate to begin trimming balance sheet later this year.
• CBO: Trump's proposed fiscal 2018 budget would reduce the deficit by one-third over next decade.
• CBO: The proposal would stem from lower spending, including decrease of $2 trillion in mandatory spending, mostly from healthcare.
• US Senate Republicans unveil new healthcare bill amid deep divisions.
• ECB may announce QE wind down in Sept -Wall Street Journal.
• More gloom awaits BoE on UK investment outlook - BCC survey.
• Britain takes step towards Brexit with repeal bill.
• IMF warns Canada on housing, trade; urges caution on rate hikes.
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand Manufacturing PMI Jun, 58.5 previous
• 02:00 Japan TR IPSOS PCSI Jul, 43.50 previous
• 02:00 China TR IPSOS PCSI Jul, 68.90 previous
• 02:00 Australia TR IPSOS PCSI Jul, 50.40 previous
• 04:30 Japan Industrial Output Rev, May, -3.3% previous
• 04:30 Japan Capacity utilization Index Change MM May, 4.3% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant data
Currency Summaries
EUR/USD is likely to find support at 1.1368 levels and currently trading at 1.1404 levels. The pair has made session high at 1.1418 and hit lows at 1.1370 levels. The euro declined against dollar on Thursday for the second consecutive day as dollar was helped by upbeat U.S. economic data, a day after Federal Reserve Chair Janet Yellen signaled the Fed's rate hikes could be gradual. U.S. data on Thursday were steady overall, with jobless claims dropping to a seasonally-adjusted 247,000 for the week ended July 8. Claims have now been below 300,000 for 123 straight weeks. U.S. producer prices rose 0.1 percent in June, with core prices also rising. On an annual basis, however, gains in the PPI slowed to a 2.0 percent pace, from 2.4 percent the month before, adding to the narrative of low inflation. The dollar index, which tracks the greenback against six major rivals, was little changed on the day at 95.742 after earlier falling to 95.464, its lowest since October 2016, while the euro slid 0.06 percent to $1.1403.
GBP/USD is supported in the range of 1.2909 levels and currently trading at 1.2944 levels. It reached session high at 1.2948 and dropped to session low at 1.2914 levels. Sterling rose against the dollar on Thursday as investors covered some short positions after U.S. Federal Reserve Chair Janet Yellen's testimony knocked the greenback weaker against a broad basket of currencies. Sterling also had a lift after Bank of England policymaker Ian McCafferty told The Times newspaper the central bank should consider unwinding its 435 billion-pound ($562 billion) quantitative easing programme earlier than planned. Investors are split on whether the BoE will raise interest rates by the end of the year, following in the footsteps of the U.S. Federal Reserve, which has lifted rates twice this year, and the Bank of Canada, which increased rates on Wednesday. Sterling was up 0.46 percent on the day at $1.2925. It is trading just above a 20-day moving average which it briefly pierced on Wednesday but analysts remain pessimistic about the near-term outlook.
USD/CAD is supported at 1.2670 levels and is trading at 1.2730 levels. It has made session high at 1.2770 and lows at 1.2715 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as recovery in oil prices strengthened Canadian dollar further but held on to most of its sharp gains from the day before as solid U.S. economic date limited further gains for loonie. The number of Americans filing for unemployment benefits fell last week for the first time in a month and producer prices unexpectedly rose in June. The loonie surged to its highest in more than a year on Wednesday, scoring its biggest gain since March, after the central bank raised interest rates for the first time since 2010. Oil prices rose after dropping in recent weeks to levels not seen since the end of last year as investors lost faith in a deal between the Organization of the Petroleum Exporting Countries and non-OPEC producers to reduce output. The Canadian dollar was last trading at C$1.2720 to the greenback, up 0.22 percent. The currency traded in a range of C$1.2722 to C$1.2771. It touched on Wednesday its strongest since June 2016 at 1.2681.
USD/JPY is supported around 112.78 levels and currently trading at 113.25 levels. It peaked to hit session high at 113.46 and made session lows at 113.13 levels. The U.S. dollar strengthened against the yen on Thursday as the greenback turned higher after upbeat US economic data, even as investors wagered that policy tightening in the United States would be glacial at best. The U.S. economy is healthy enough for the Fed to raise rates and start winding down its massive bond portfolio, but low inflation may leave the central bank with diminished leeway, Yellen said at her semiannual appearance before Congress on Wednesday. The greenback earlier hit its lowest since last October after U.S. Federal Reserve Chair Janet Yellen struck a less hawkish than the expected tone in testimony before Congress on Wednesday. The dollar index was little changed on the day at 95.74, while the Japanese yen weakened 0.09 percent versus the greenback at 113.24 per dollar.
Equities Recap
European shares inched higher on Thursday, with investors less keen to chase the previous session's strong rally that came on the back of the relatively dovish tone struck by Fed chair Janet Yellen overnight.
UK's benchmark FTSE 100 closed flat, the pan-European FTSEurofirst 300 ended the day up by 0.28 percent, Germany's Dax ended up by 0.1 percent, France’s CAC finished the day up by 0.3 percent.
Wall Street posted slight gains on Thursday and the Dow hit another record high close, with financials rising ahead of profit reports due Friday from several big U.S. banks.
Dow Jones closed up by 0.12 percent, S&P 500 ended up 0.19 percent, Nasdaq finished the day up by 0.21 percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday after falling for three straight days, tracking gains in German bond yields with solid U.S. economic data supporting their trend higher.
In late trading, the 10-year Treasury yield was at 2.346 percent, up from 2.327 percent late Wednesday.
U.S. 30-year bond yields rose to 2.918 percent, from 2.894 percent on Wednesday.
At the front-end of the curve, the two-year yield was at 1.367 percent, up from Wednesday's 1.351 percent.
Commodities Recap
Gold retreated from earlier gains on Thursday as the U.S. dollar turned higher and global stocks gained on upbeat data, even as investors wagered that policy tightening in the United States would be glacial at best.
Spot gold was down 0.1 pct at $1,218.59 per ounce by 1:51 p.m. EDT (1751 GMT), off Monday's near four-month low of months at $1,204.45 this week.U.S. gold futures for August delivery 1 settled down $1.80, or 0.15 percent, at $1,217.30 per ounce.
Oil prices rose 1.3 percent on Thursday after much stronger demand in China overshadowed a downbeat report by the International Energy Agency (IEA) that showed higher production by key OPEC exporters.
Brent crude settled up 68 cents or 1.42 percent at $48.42 a barrel. U.S. light crude settled up 59 cents at $6.08 a barrel.
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