Market Roundup
• US Apr CPI MM, SA 0.2%, 0.3% forecast, -0.1% previous.
• US Apr CPI YY, NSA, 2.5%, 2.5% forecast 2.4% previous.
• US Apr Core CPI MM, SA, 0.1%, 0.2% forecast, 0.2% previous.
• US Apr Core CPI YY, NSA, 2.1%, 2.2% forecast 2.1% previous.
• US Apr Core Index, NSA, 250.546, 250.684 forecast, 249.554 previous.
• US Apr Core CPI Index, SA, 256.45, 256.20 previous.
• US w/e Initial Jobless Claims, 211k, 218k forecast, 211k previous.
• US w/e Jobless Claims 4-wk Avg,216k, 221.50k previous.
• US w/e Continued Jobless Claims, 1.790 mln, 1.778 mln forecast, 1.756 mln previous.
• US Apr Real Weekly Earnings MM, -0.1%, -0.1% forecast, 0.4% previous.
• US Apr Federal Budget, $. 214 bln, 193.75 bln forecast, -209 bln previous.
• US Apr Cleaveland Fed CPI, 0.2%, 0.3% previous.
• CA Mar New Housing Price Index, 0.0%, 0.0% forecast, -0.2% previous.
• First U.S.-North Korea summit set for June 12 in Singapore.
• Bank of England to wait out soft data as it eyes next rate rise.
• Italy's League and 5-Star make "significant steps" towards government deal.
Looking Ahead - Economic Data (GMT)
• 10 May 22:30 New Zealand Apr Manufacturing PMI, 52.2 previous
• 10 May 22:45 New Zealand Apr Food Price Index, 1.0% previous
• 11 May 01:30 Australia Mar Housing Finance, -0.2% previous
• 11 May 01:30 Australia Mar Invest Housing Finance, 0.5%
Looking Ahead - Events, Other Releases (GMT)
• 13:15 ECB's Draghi speaks in Florence, Italy
• 13:30 Federal Reserve Bank of St. Louis President James Bullard speaks in Missouri, USA
Currency Summaries
EUR/USD is likely to find support at 1.1840 levels and currently trading at 1.1924 levels. The pair has made session high at 1.1948 and hit lows at 1.1870 levels. The euro strengthened against US dollar on Thursday as U.S. dollar fell after data showed a smaller-than-expected rise in consumer prices caused traders to pare positions betting that inflation is accelerating, which could push the Federal Reserve to hike interest rates faster. Also lower U.S. Treasury yields added pressure on the greenback which had rallied for over two weeks on traders exiting their bearish bets on signs of overseas growth, in particular in Europe, cooling more quickly than the United States. The U.S. Consumer Price Index, the government's broadest inflation gauge, increased 0.2 percent in April, while the CPI rate that excludes volatile food and energy prices edged up 0.1 percent. Economists polled had forecast the CPI likely grew by 0.3 percent last month, and the core CPI gained 0.2 percent. The euro benefited the most on the dollar's pullback, posting a 0.6 percent gain at $1.1920. The dollar index fell 0.4 percent against a basket of six major currencies at 92.680 after hitting a 4-1/2-month high of 93.42 on Wednesday.
GBP/USD is supported in the range of 1.3450 levels and currently trading at 1.3516 levels. It reached session high at 1.3527 and dropped to session low at 1.3461 levels. Britain's pound declined sharply to a fresh four-month low against the dollar on Thursday after the Bank of England held rates steady as expected but cut its growth and inflation projections for this year and next. Markets still think there is more chance than not of a 25 basis point interest rate rise in 2018 but that probability fell on Thursday. Sterling has tumbled in recent weeks from its post-Brexit vote highs of close to $1.44 to $1.35, erasing its gains against the dollar for the year as investors unwound bets on a rate increase and British economic data came in worse than expected. Data published earlier on Thursday appeared to confirm that, showing industrial output inched up by 0.1 percent month-on-month in March, slightly below analysts' forecasts for 0.2 percent growth. Before the BoE rate announcement, sterling was up as much as 0.4 percent at $1.3618. But afterwards it fell to trade 0.2 percent lower on the day at $1.3517, and then extended to those falls to a four-month low of $1.3474.It also weakened against the euro, with the single currency rising one percent to 88.35 pence.
USD/CAD is supported at 1.2725 levels and is trading at 1.2765 levels. It has made session high at 1.2813 and lows at 1.2740 levels. The Canadian dollar strengthened to a nearly three-week high against its U.S. counterpart on Thursday as oil prices climbed, while data showing U.S. consumer prices rebounded less than expected in April weighed on the greenback. The price of oil, one of Canada's major exports, headed for its largest weekly increase in a month, as the market prepared for potential disruption to crude flows from major exporter Iran in the face of U.S. sanctions. The loonie has rebounded as much as 2 percent since hitting on Tuesday a nearly seven week low at C$1.2998.Canadian new home prices were unchanged in March, as expected, as higher prices in Ottawa were offset by a weaker Toronto market, data from Statistics Canada showed. The Canadian dollar was last trading 0.7 percent higher at C$1.2760 to the greenback, or 78.33 U.S. cents. The currency touched its strongest level since April 20 at C$1.2743.The loonie has rebounded as much as 2 percent since hitting on Tuesday a nearly seven week low at C$1.2998.
USD/JPY is supported around 109.10 levels and currently trading at 109.40 levels. It peaked to hit session high at 109.65 and made session lows at 109.30 levels. The U.S. dollar dipped against the yen on Thursday after a modest rise in consumer prices in April caused concerns among investors whether the Federal Reserve might raise interest rates more than expected this year. The greenback extended its early losses after April U.S. data showed a smaller-than-expected rise in the annual inflation rate.The U.S. Labor Department said its Consumer Price Index rose 0.2 percent last month, less than forecasts for 0.3 percent, as a moderation in healthcare prices offset increases in the cost of gasoline and rental accommodations. Oil markets were choppy but settled higher as traders eyed further declines in Venezuelan crude production in tandem with bullish drawdowns in U.S. crude inventories. The dollar index fell 0.2 percent against a basket of six major currencies at 92.88 after hitting a 4-1/2-month high of 93.42 on Wednesday, while dollar was down 0.33 percent against the Japanese yen at 109.38 yen.
Equities Recap
European shares pulled lower on Thursday, weighed down by losses in BT following a disappointing update and weakness among utilities stocks, while political jitters hit Italian stocks.
UK's benchmark FTSE 100 closed down by 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 0.12 percent, Germany's Dax ended up by 0.6 percent, France’s CAC finished the day up by 0.2 percent.
Wall Street jumped on Thursday, and Apple Inc inched closer to a $1 trillion stock market value, as tepid inflation data eased worries of faster interest rate hikes this year.
Dow Jones closed up by 0.80 percent, S&P 500 ended up by 0.94 percent, Nasdaq finished the day up by 0.88 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday as a smaller-than-expected increase in the consumer price index in April reduced fears that domestic inflation is picking up steam as the labor market tightens.
The yield on benchmark 10-year Treasury notes was 2.964 percent, down 4 basis points from Wednesday's close. The 30-year yield was 3.129 percent, down 2.5 basis points from its last close. The two-year yield shaved off 1.2 basis points and was last at 2.518 percent.
Commodities Recap
Gold rose on Thursday as the U.S. dollar backed away from 2018 highs after weaker-than-forecast U.S. inflation data and as tensions between the United States and Iran also supported the precious metal.
Spot gold rose 0.6 percent at $1,320.53 per ounce by 1:34 p.m. EDT (1734 GMT). During the session it touched $1,322.76, a 10-day high. U.S. gold futures for June delivery settled up $9.30, or 0.7 percent, at $1,322.30 per ounce.
Crude prices slipped on Thursday, giving up early gains as investors took profit on a rally triggered by potential disruption to oil flows from major exporter Iran in the face of U.S. sanctions.
Brent crude futures fell 8 cents to $77.13 a barrel, having risen earlier in the day to $78, their highest since November 2014. U.S. West Texas Intermediate crude futures were down 1 cent at $71.13.
