Market Roundup
• U.S. hits Russians with sanctions for election meddling, cyber-attacks.
• U.S. Initial Jobless Claims w/e, 226k, 226k forecast, 231k previous, 230k revised.
• U.S. Jobless Claims 4-Wk Avg w/e, 221.50k, 222.50k previous, 222.25k revised.
• U.S. Continued Jobless Claims w/e, 1.879 mln, 1.900 mln forecast, 1.870 mln previous, 1.875 mln revised.
• U.S. Feb Import Prices MM, 0.4%, 0.2% forecast, 1.0% previous, 0.8% revised.
• U.S. Feb Export Prices MM, 0.2%, 0.3% forecast, 0.8% previous.
• U.S. Mar NAHB Housing Market Indx, 70, 71 forecast, 72 previous, 71 revised.
• U.S. Mar NY Fed Manufacturing, 22.50, 15.00 forecast, 13.10 previous.
• U.S. Mar Philly Fed Business Index, 22.3, 23.0 forecast, 25.8 previous.
• U.S. Mar Philly Fed Employment, 25.60, 25.20 previous.
• Canada household debt-to-income near record high, home sales fall.
• Euro zone banks may get reprieve until 2021 from ECB bad-debt rules.
• French markets watchdog wants tougher rules for UK firms after Brexit.
• UK watchdog examines unregulated firm drawing Asian investors – source.
Looking Ahead - Economic Data (GMT)
• 00:00 China Mar TR IPSOS PCSI, 68.93 previous
• 00:00 Japan Mar TR IPSOS PCSI, 45.08 previous
• 00:00 Australia Mar TR IPSOS PCSI, 54.33 previous
• 00:00 New Zealand Feb RBNZ Offshore Holdings, 57.3% previous
• 02:30 Japan Jan Industrial Output Rev, -6.6% previous
• 02:30 Japan Jan Capacity Utility Index Change MM, 2.8% previous
Looking Ahead - Events, Other Releases (GMT)
• 07:30 Norges Bank's Jon Nicolaisen and Egil Matsen speak to Norges Bank's Regional Network Region North-West - Kristiansund, Norway
• 09:30 Bank of England Financial policy committee statement from its meeting on 12 March 2018 – London
Currency Summaries
EUR/USD is likely to find support at 1.2271 levels and currently trading at 1.2315 levels. The pair has made session high at 1.2366 and hit lows at 1.2108 levels. The euro declined on Thursday as dollar strengthened as traders braced for next week's Federal Open Market Committee meeting at which the Fed is expected to raise interest rates. The greenback also found some support from upbeat U.S. data on Thursday, which showed the number of Americans filing for unemployment benefits fell last week. The number of Americans filing for unemployment benefits fell last week, pointing to sustained labor strength even as economic growth appears to have slowed early in the first quarter. Other data on Thursday showed an increase in the prices of imported goods in February amid weakness in the U.S. dollar and rising commodity prices, bolstering expectations that inflation will pick up this year. Labor market strength and a steady increase in price pressures could pave the way for the Federal Reserve to raise interest rates at its March 20-21 policy meeting. The U.S. central bank has forecast three rate increases for this year, but some economists believe it will raise its projection to four hikes at the meeting. The dollar index rose 0.48 percent, with the euro down 0.52 percent to $1.2301.
GBP/USD is supported in the range of 1.3870 levels and currently trading at 1.3939 levels. It reached session high at 1.3988 and dropped to session low at 1.3917 levels. Britain's pound dipped on Thursday as the dollar gained ground ahead of next week's expected rise in U.S. interest rates, while scepticism about the prospect of a smooth Brexit transition deal also weighed on sentiment. The British currency slipped 0.2 percent to $1.3942 as broader currency markets stuck to established ranges before a G20 meeting next week amid rising trade tensions. There was no new economic data to drive the pound, but traders remained focused on a Bank of England policy meeting next week and a European Union leaders summit where Britain has said it will strike a transition deal to cover its relations with the bloc immediately after Brexit in March 2019. Worries have grown that Britain and EU officials would fall short of securing a transition arrangement at the March 22-23 summit as differences have grown in recent days. Such an outcome could question market expectations of a 25 basis point rate increase by the UK central bank in May. Sterling hit $1.4346 on Jan. 25, its highest level against the U.S. dollar since Britain voted to leave the European Union in June 2016.Though it has pulled back modestly from those highs, it remains near the top of its trading range of $1.20 to $1.43, buoyed by hopes a Brexit transition deal will be eventually be struck and a generally weaker U.S. currency.
USD/CAD is supported at 1.2918 levels and is trading at 1.3053 levels. It has made session high at 1.3067 and lows at 1.2944 levels. The Canadian dollar weakened modestly against the greenback on Thursday, as stronger dollar across the board and geopolitical tensions weighed on Canadian dollar. Investors were cautious as political volatility in Washington. President Donald Trump's ouster of Secretary of State Rex Tillerson on Tuesday spooked markets briefly. But the results of a special congressional election in Pennsylvania on Tuesday night compounded the sense of instability, driving traders into U traditional safe-haven assets. Oil prices edged higher in choppy trade. U.S. crude CLcv1 rose 0.36 percent to $61.18 per barrel and Brent was last at $65.08, up 0.29 percent on the day. Oil rose in tandem with a pickup in U.S. stock markets. Crude futures have moved in sync with equities uninterruptedly for the past 99 trading days, the longest such stretch in two years. The S&P 500 stock index rose about 0.15 percent. Prices bounced around after the United States announced new sanctions against Russian individuals and groups, including Moscow's intelligence services and a Russian propaganda organization. The Canadian dollar was trading down 0.1 percent at C$1.3052 to the greenback. The currency's strongest level of the session was C$1.2946, while its weakest level was C$1.3067.
USD/JPY is supported around 105.75 levels and currently trading at 106.22 levels. It peaked to hit session high at 106.28 and made session lows at 105.85 levels. The U.S. dollar edged higher against the yen on Thursday as short-term concerns eased over a global trade war, but fears of longer-term instability kept demand high for safe-haven government bonds on both sides of the Atlantic. U.S dollar claimed against yen climbed after a White House trade adviser sought to downplay the chances of a trade war in the wake of recent protectionist policies from U.S. President Donald Trump's administration. Trump’s tough approach to global trade, including new tariffs on metals imports, will not necessarily provoke retaliation from trading partners, Peter Navarro, the top adviser on international economic exchanges, said on CNBC.The yen is expected to be the main beneficiary of any increase in trade protectionism, given Japan's strong current account surplus and the currency's reputation as a safe haven. The yen, which began the year trading around 113 yen per dollar, was last trading at 106.23. The dollar index, which measures the greenback against a basket of six other major currencies, was up 0.5 percent at 90.106. Since the beginning of the month, the index has lost about 0.7 percent.
Equities Recap
European shares rose on Thursday, buoyed by good results from companies including insurance heavyweights Munich Re and Generali, while Societe Generale fell after its deputy CEO unexpectedly resigned.
The UK's benchmark FTSE 100 closed up by 0.2 percent, FTSEurofirst 300 ended the day up by 0.62 percent, Germany's Dax ended up by 1 percent, and France’s CAC finished the up by 0.8 percent.
The S&P 500 turned lower on Thursday on a report that U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to U.S. President Donald Trump's businesses, reinforcing the picture of turmoil in the White House.
Dow Jones closed up by 0.47 percent, S&P 500 ended down 0.08 percent, Nasdaq finished the day down by 0.19 percent.
Treasuries Recap
The Treasury bond yield curve continued to flatten on Thursday morning as muted inflation expectations and a flight to safe-haven investments drove demand for longer-dated securities.
The yield on the benchmark government note was last at 2.810 percent, just below yesterday's close at 2.817 percent. The yield on the two-year note was last at 2.270 percent, above Wednesday's close at 2.262 percent. The yield on the 30-year bond was last at 3.049 percent, slightly below the close at 3.058 percent.
Commodities Recap
Gold prices dipped on Thursday, under pressure from a stronger U.S. dollar, although tensions between Britain and Russia limited the precious metal's decline a day after it hit a one-week high.
Spot gold was down 0.5 percent at $1,317.52 per ounce by 1:40 p.m. EST (1740 GMT), edging away from Wednesday's one-week high, while U.S. gold futures for April delivery settled down $7.80, or 0.6 percent, at $1,317.80 per ounce.
Oil prices edged higher in choppy trade on Thursday, supported by a pickup in equity markets but pressured by expectations that crude supply will exceed demand later this year.
West Texas Intermediate (WTI) crude futures rose 27 cents to $61.23 a barrel, a 0.4 percent gain, by 12:54 p.m. EST (1654 GMT). Brent crude futures rose 20 cents to $65.09 a barrel, a 0.3 percent gain.
