Market Roundup
• US Initial Jobless Claims w/e, 243k, 251k forecast, 260k previous.
• US Continued Jobless Claims w/e, 1.889M, 1.935M forecast, 1.938M previous.
• US PPI Final Demand YY Sep, 2.6%, 2.5% forecast, 2.4% previous.
• US PPI Final Demand MM Sep, 0.4%, 0.4% forecast, 0.2% previous.
• CA New Housing Prices Index Aug, 0.1%, 0.3% forecast, 0.4% previous.
• Fed 'should defend' inflation target or risk losing credibility –Bullard.
• Fed's Brainard sees merits to allowing higher inflation after future recessions.
• ECB's Draghi pledges rock-bottom rates as Germany calls for change.
• Trump signs order to weaken Obamacare, boost bare-bones insurance.
Looking Ahead - Economic Data (GMT)
• 03:00 New Zealand Manufacturing PMI Sep, 57.9 previous
• 05:20 Japan Foreign Bond Investment w/e, -1,014
• 07:30 Japan TR IPSOS PCSI Oct, 43.24 previous
• 07:00 China PPI YY Sep, 6.3% forecast, 6.3% previous
• 07:00 China CPI YY Sep, 1.6% forecast, 1.8% previous
• 07:00 China CPI MM Sep, 0.4% forecast, 0.4% previous
• 07:30 China TR IPSOS PCSI Oct, 70.17 previous
Looking Ahead - Events, Other Releases (GMT)
• 14:15 ECB’s Vitor Constancio is attending a panel session, Washington
• 15:30 Fed’s Robert Kaplan participates in a Q&A session
• 12:30 Fed’s Eric Rosengren and Jerome Powell speaks at a conference
• 18:10 BoE’s Victoria Saporta is participating in a meeting, Washington
• N/A ECB’s Mario Draghi and Benoit Coeure attending meetings of the WB and the IMF
• N/A Treasury Secretary Steven Mnuchin speaks at a meeting, Washington
Currency Summaries
EUR/USD is likely to find support at 1.1800 levels and currently trading at 1.1839 levels. The pair has made session high at 1.1850 and hit lows at 1.1825 levels. The euro dipped against the dollar on Thursday as the greenback strengthened after a report showed a rise in U.S. producer prices in September helped shake off some weakness caused by Wednesday's release of U.S. Federal Reserve meeting minutes that highlighted policymakers' more cautious outlook toward inflation. The dollar, which tracks the greenback against six major currencies, was up 0.14 percent at 93.148. The index was on pace to snap a four-day losing streak, the longest such stretch in about three months. The minutes from the last Fed meeting showed many policymakers still felt that another rate increase this year "was likely to be warranted," but several said additional tightening depended on upcoming inflation data. On Thursday, the greenback found some support after the Labor Department said its producer price index for final demand increased 0.4 percent last month after rising 0.2 percent in August. Separately, data showed applications for unemployment benefits dropped to a more than one-month low last week as the boost to claims in Texas and Florida from Hurricanes Harvey and Irma continued to unwind. The euro was down 0.15 percent to $1.1839 snapping four straight days of gains after rising to its highest since Sept. 25 earlier in the session.
GBP/USD is supported in the range of 1.3119 levels and currently trading at 1.3275 levels. It reached session high at 1.3288 and dropped to session low at 1.3134 levels. Britain's pound rose to eight-day high against the dollar on Thursday after a report in Germany's Handelsblatt newspaper that the European Union could offer Britain a two-year transitional Brexit deal. The pound had earlier tumbled after the EU's chief Brexit negotiator Michel Barnier told reporters that talks around Britain's divorce payment had become deadlocked, hitting as low as $1.3122.But it jumped after the report to as high as $1.3292, up more than 0.4percent on the day. Handelsblatt said Barnier wanted to offer Britain the chance to stay in the EU's single market and customs union for a two-year transition if London agreed to settle its financial obligations with the EU and sign a divorce agreement. Handelsblatt, citing EU diplomats, said Britain would also have to meet all the obligations of EU membership during the transition and Barnier was expected to make the proposal during a meeting of EU ambassadors on Friday. Britain's government has said it will cease to be a member of the single market after its scheduled departure from the EU in March 2019 as it would not agree to continue to allow automatic free movement of EU workers into the country.
USD/CAD is supported at 1.2413 levels and is trading at 1.2455 levels. It has made session high at 1.2492 and lows at 1.2448 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil prices recovered from earlier losses and stronger-than-expected home prices data boosted Canadian dollar across the board. Oil prices rebounded from earlier losses, although they were still down on the session, after the U.S. Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production. In domestic data, new home prices rose less than expected in August as prices were unchanged in a number of markets, including the cities of Toronto and Vancouver, which have been the country's hottest regions, Statistics Canada said. Separate data showed that prices for repeat sales of single-family homes declined 0.8 percent in September from the month before. It was the first monthly decline since January 2016 and the biggest since September 2010. The Canadian dollar was trading at C$1.2477 to the greenback, or 80.15 U.S. cents, down 0.1 percent. The currency's weakest level of the session was C$1.2490, while it touched its strongest since Sept. 29 C$1.2434.
USD/JPY is supported around 112.00 levels and currently trading at 112.22 levels. It peaked to hit session high at 112.41 and made session lows at 112.11 levels. The U.S. dollar pared gains against the Japanese yen on Thursday as investors waited on U.S. inflation data for more clues. The worries about stubbornly weak consumer prices put a question mark over the pace of future rate increases in the world's biggest economy. Investors cheered an increase in the U.S. producer price index (PPI) for last month, but inflation concerns were still in focus ahead of consumer price index (CPI) data on Friday after Federal Reserve minutes showed a more guarded view. The Labor Department said on Thursday its producer price index for final demand increased 0.4 percent in September. In the 12 months through September, the PPI jumped 2.6 percent, the biggest gain since February 2012. Minutes from the Federal Reserve's September meeting released on Wednesday showed that Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not. After four straight days of declines, the dollar index, tracking the greenback against a basket of major currencies, rose 0.02 percent.
Equities Recap
Germany's stocks benchmark index DAX rose above 13,000 points for the first time in its 30-year history on Thursday, as relatively attractive valuations and optimism about global economic growth continued to lure investors.
The UK's benchmark FTSE 100 closed down by 1.25 percent, FTSEurofirst 300 ended the day up by 0.01 percent, Germany's Dax ended up by 0.13 percent, and France’s CAC finished the down by 0.07 percent.
U.S. stocks edged lower on Thursday, pausing after recent gains, after AT&T said it lost subscribers in the last quarter, while banks fell following results.
Dow Jones closed down by 0.14 percent, S&P 500 ended down 0.17 percent, Nasdaq finished the day up by 0.17 percent.
Treasuries Recap
U.S. Treasury prices gained on Thursday after the Treasury Department's $12 billion bond sale drew strong demand, and as investors repositioned ahead of inflation data due on Friday.
Benchmark 10-year notes gained 5/32 in price to yield 2.327 percent, down from 2.345 percent on Wednesday.
Commodities Recap
Oil prices rebounded from earlier losses, although they were still down on the session after the Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production on Thursday.
U.S. crude fell 1.29 percent to $50.64 per barrel and Brent was last at $56.30, down 1.12 percent.
Gold prices edged higher to a more than two-week high on Thursday as focus shifted to U.S inflation figures due on Friday which are expected to give more clues on monetary policy.
Spot gold steadied at $1,293.40 an ounce by 3:30 p.m. EDT (1930 GMT). Prices earlier hit $1,297.40, the highest since Sept. 26. U.S. gold futures settled higher at $1,296.50 per ounce.
