Market Roundup
• Trump says U.S. to impose hefty tariffs on steel, aluminium imports.
• U.S. Jan Core Price Index YY, +1.5%, +1.5% forecast, +1.5% previous.
• U.S. Jan Core PCE Price Index MM, +0.3%, 0.3% forecast, +0.2% previous.
• U.S. Jan PCE Price Index YY, +1.7%, +1.7% previous.
• U.S. Jan PCE Price Index MM, +0.4%, 0.1% previous.
• U.S. Initial Jobless Claims w/e, 210k, 226k forecast, 222k previous, 220k revised.
• U.S. Jobless Claims 4-wk Avg w/e, 220.50k, 226k previous.
• U.S. Continued Jobless Claims w/e, 1.931 mln, 1.930 mln forecast, 1.875 mln previous, 1.874 mln revised.
• U.S. Feb Markit Mfg PMI Final, 55.3, 55.9 previous.
• U.S. Feb ISM Manufacturing PMI, 60.8, 58.7 forecast, 59.1 previous.
• U.S. Jan Personal Consumption Real MM -0.1%, +0.3% previous, +0.2% revised.
• U.S. Jan Consumption, Adjusted MM, +0.2%, +0.2% forecast, +0.4% previous.
• U.S. Jan Construction Spending MM, 0.0%, +0.3% forecast, +0.7% previous, 0.8% revised.
• Fed chief Powell says no evidence U.S. economy overheating.
• Four Fed rate hikes this year would be 'gradual' –Dudley.
• IMF chief sees growth, overheating, debt risks from U.S. tax cuts.
• U.S. considering broad oil sanctions on Venezuela – source.
• CA Feb Markit Mfg PMI SA, 55.6, 55.9 previous.
• CA Q4 Current Account C$, -16.35 bln, -17.80 bln forecast, -19.35 bln previous, -18.59 bln revised.
• EU's negotiator says Britain can only get a free-trade deal now.
• ECB to chart steady course in March meeting: sources.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Jan Building Consents, -9.6% previous
• 23:30 Japan Feb CPI Core Tokyo YY, 0.8% forecast, 0.7% previous
• 23:30 Japan Feb CPI, Overall Tokyo, 1.3% previous
• 23:30 Japan Jan Jobs/Applicants Ratio, 1.60 forecast, 1.59 previous
• 23:30 Japan Jan Unemployment Rate, 2.7% forecast, 2.8% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A BoE's Mark Carney speaks at a conference for Scottish economics students - Edinburgh
• 08:10 ECB's Yves Mersch speaks at KPMG Finance Forum 2018 - Prague
Currency Summaries
EUR/USD is likely to find support at 1.2086 levels and currently trading at 1.2264 levels. The pair has made session high at 1.2222 and hit lows at 1.2152 levels. The euro strengthened against US dollar on Thursday as dollar reversed earlier gains as President Donald Trump's plan for stiff tariffs on steel and aluminium stoked fears of retaliation from U.S. trading partners and rising costs for consumers. The 25-percent tariffs on imported steel and 10-percent levies on aluminium in a bid to protect U.S. producers overshadowed testimony from Federal Reserve Chairman Jerome Powell, who told U.S. lawmakers that, while the economy was doing well, there was scant evidence it was overheating or propelling wages decisively stronger. Trump's tariff announcement came after Powell's testimony to the Senate Banking Committee where he said "there is no evidence the economy is overheating. Powell's comments, the second part of his inaugural testimony before Congress as Fed chief, were seen as less upbeat than his remarks on the U.S. economy before the House Financial Services Committee two days earlier. Bets had grown that the Fed may raise short-term rates four times in 2018, one more than policymakers projected in December. On the data front, The Labor Department said first-time filings for unemployment benefits fell to a 48-year low last week, while the Institute for Supply Management said its barometer of national factory activity reached its strongest since May 2004.
GBP/USD is supported in the range of 1.3618 levels and currently trading at 1.3779 levels. It reached session high at 1.3780 and dropped to session low at 1.3710 levels. Britain's pound declined against the dollar on Thursday as investors sold the pound on worries a Brexit transition deal might not be reached this month. British Prime Minister Theresa May will lay out her views on how to keep trade open between all of the United Kingdom and the European Union in a key speech on Friday, just two days after the EU's chief negotiator Michel Barnier struck a downbeat tone on the progress of Brexit talks so far, weakening sterling. Sterling has struggled to build on a rally earlier this year amid resurgence in political risk centred on Brexit, and a broad rebound in the dollar. It suffered its worst month since October 2016 in February, as the greenback strengthened across the board. Warnings by Barnier that a transition deal - designed to give Britain and the EU more time to agree the terms of their future relations - was not guaranteed have rattled investors. The pound slipped 0.4 percent to as low as $1.3712, its weakest since Jan. 12. A closely watched gauge of British factory activity slipped to its lowest in eight months in February as output expanded more slowly, despite a marked upturn in orders, according to figures released on Thursday. The IHS Markit/CIPS manufacturing purchasing managers' index (PMI) inched down to 55.2 in February from 55.3 in January, its second-lowest reading since June 2016's Brexit vote.
USD/CAD is supported at 1.2774 levels and is trading at 1.2819 levels. It has made session high at 1.2895 and lows at 1.2811 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as the dollar lost ground on fears of an imminent trade war after President Donald Trump said the United States would impose tariffs on steel and aluminium. Trump announced on Thursday he would impose tariffs of 25 percent on imported steel and 10 percent on aluminium, in a move the administration said would protect U.S. industry. In reaction, Canadian Trade Minister Francois-Philippe Champagne said any U.S. tariff or quota imposed on Canada's steel industry would be "unacceptable" and would be felt in both Canada and the United States. The Canadian dollar hit session lows versus the U.S. currency following Trump's tariff announcement. The tariff news overshadowed the Senate testimony of Federal Reserve Chairman Jerome Powell and comments from New York Fed President William Dudley on interest rates. On the data front, Canada’s current account deficit narrowed in the fourth quarter as the country posted a smaller shortfall in the trade of goods after three consecutive quarters of increases, data from Statistics Canada showed. The Canadian dollar was trading 0.1 percent higher at C$1.2819 to the greenback. The currency's strongest level of the session was C$1.2808, while it touched its weakest since Dec. 20 at C$1.2895.
AUD/USD is supported around 0.7650 levels and currently trading at 0.7731 levels. It hit session high at 0.7820 and made session lows at 0.7709 levels. The Australian dollar edged higher against the dollar on Thursday as Australian dollar was supported by mixed domestic data and slightly weaker US dollar across the board. The greenback slid from six-week highs against a basket of six major currencies on fears of an imminent trade war after President Donald Trump said the United States would impose tariffs on steel and aluminium. President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminium to protect U.S. producers, risking retaliation from major trade partners like China and Europe and helping trigger a selloff on the greenback. Trump said the duties of 25 percent on steel and 10 percent on aluminium would be formally announced next week although White House officials later said some details still needed to be ironed out. News of the tariffs drove the stocks of U.S. domestic steel and aluminium makers sharply higher, but also hit sentiment on Wall Street due to the potential impact of higher costs on consumers. On the data front, Australian business investment showed a 0.2 percent dip for the December quarter, missing forecasts for a 0.9 percent increase. The detail of the report, however, was much firmer with the third quarter revised up sharply and strong spending on plant and machinery adding to economic growth. The Aussie was last trading at $0.7760, leaving its losses for the week at 1.5 percent.
Equities Recap
European shares slid on Thursday as a flurry of uninspiring earnings updates from retailer Carrefour and advertiser WPP kept the mood downbeat, while broader jitters over tightening monetary policy spilled over into a new month.
UK's benchmark FTSE 100 closed down by 0.99 percent, the pan-European FTSEurofirst 300 ended the day down by 1.36 percent, Germany's Dax ended down by 2.23 percent, France’s CAC finished the day down by 1.17 percent.
The S&P 500 registered a third straight day of more than 1 percent declines on Thursday after President Donald Trump said the United States would impose import tariffs on steel and aluminium, raising concern about higher prices and a trade war.
Dow Jones closed down by 1.69 percent, S&P 500 ended up 1.37 percent, Nasdaq finished the day up by 1.28 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday with the 10-year hitting near three-week lows as President Donald Trump's plan for stiff tariffs on steel and aluminium stoked fears of retaliation from U.S. trading partners and rising costs for consumers.
The benchmark 10-year U.S. Treasury note yield was at 2.802 percent, down over 6 basis points from late on Wednesday. It fell to a two-week low of 2.795 percent earlier on Thursday.
The two-year yield fell to 2.214 percent, the lowest in almost two weeks after hitting a more than nine-year high of 2.286 percent on Wednesday.
Commodities Recap
Gold prices fell about 1 percent on Thursday as investors braced for expected U.S. interest rate hikes after Federal Reserve Chairman Jerome Powell testified before Congress this week.
Spot gold fell 0.9 percent at $1,306.44 per ounce by 1:42 p.m. EST (18:2 GMT), while U.S. gold futures for April delivery settled down $12.70, or 1 percent, at $1,305.20. Spot prices earlier hit their weakest since Jan. 2 at $1,304.61.
Oil slumped more than 1 percent on Thursday, touching two-week lows under pressure from a retreating stock market and worries about surging U.S. crude output.
Brent, the global benchmark, settled at $63.83 a barrel, down 90 cents, or 1.4 percent. U.S. crude settled down 65 cents, or 1.1 percent, at $60.99 a barrel, after touching a low of $60.18. The session lows for both benchmarks were the lowest in two weeks.
