Market Roundup
• Fed minutes: Further hike "warranted soon," debate opened on pause.
• Fed policymakers say statement in coming meetings might need changes, particularly in language regarding need for 'further gradual increases' in rates -minutes.
• Trump says 'there is a long way to go' on tariffs with China.
• May's Brexit deal is the only deal possible, says EU's Barnier.
• On eve of signing, North America trade pact still being finalized.
• EU takes new step in disciplinary procedure over Italy debt- source.
• US Oct Personal Consump Real MM, 0.4%, 0.3% previous, 0.1% revised.
• US Oct Personal Income MM, 0.5%, 0.4% forecast, 0.2% previous.
• US Oct Core PCE Price Index MM, 0.1%, 0.2% forecast, 0.2% previous.
• US Oct PCE Price Index MM, 0.2%, 0.1% previous.
• US Oct Dallas Fed PCE, 1.6%, 1.4% previous.
• US 24 Nov, w/e Initial Jobless Claims, 234k, 220k forecast, 224k previous.
• US 24 Nov, w/e Jobless Claims 4-Wk Avg, 223.25k, 218.50k previous.
• US 17 Nov, w/e Continued Jobless Claims, 1.710 mln, 1.664 mln forecast, 1.668 mln previous, 1.660 mln revised.
• US Oct Pending Homes Index, 102.1, 104.6 previous, 104.8 revised.
• CA Q3 Current Account C$, -10.34 bln, -11.50 bln forecast, -15.88 bln previous, -16.68 bln revised.
• CA Sep Average Weekly Earnings YY, 1.80%, 2.87% previous, 2.85% previous.
Looking Ahead - Economic Data (GMT)
• 29 Nov 21:45 New Zealand Oct Building Consents, -1.5% previous
• 29 Nov 23:30 Japan Nov CPI Tokyo Ex fresh food YY, 1.0% forecast, 1.0% previous
• 29 Nov 23:30 Japan Nov CPI, Overall Tokyo, 1.5% previous
• 29 Nov 23:30 Japan Nov Core CPI Tokyo YY, 0.5% previous
• 29 Nov 23:30 Japan Oct Jobs/Applicants Ratio, 1.65 forecast, 1.64 previous
• 29 Nov 23:30 Japan Oct Unemployment Rate, 2.3% forecast, 2.3% previous
• 29 Nov 23:50 Japan Oct Industrial Output Prelim MM SA, 1.2% forecast, -0.4% previous
• 30 Nov 00:30 Australia Oct Private Sector Credit, 0.4% previous
• 30 Nov 00:30 Australia Oct Housing Credit, 0.3% previous
• 30 Nov 01:00 China Nov NBS Non-Mfg PMI, 53.9 previous
• 30 Nov 01:00 China Nov NBS Manufacturing PMI, 50.2 forecast, 50.2 previous
• 30 Nov 01:00 China Nov Composite PMI, 53.1 previous
• 30 Nov 05:00 Japan Nov Consumer Confid. Index, 43.0 previous
• 30 Nov 05:00 Japan Oct Construction Orders YY, 1.0% previous
• 30 Nov 05:00 Japan Oct Housing Starts YY, 0.3% forecast, -1.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 30 Nov 05:00 Remarks by BoJ Executive Director Yuichi Ikeda at the 7th FinTech Forum in Tokyo
• 30 Nov 08:45 Swedish central bank Deputy Governor Martin Floden takes part in an information meeting Stockholm
• 30 Nov 10:00 ECB board member Yves Mersch speaks at TIPS launch event in Rome
• 30 Nov 12:45 ECB board member Benoit Coeure to moderate a panel discussion in Frankfurt
• 30 Nov 14:00 Fed New York releases text of President John Williams's prepared remarks before a closed-door meeting of the Group of Thirty in New York
Currency Summaries
EUR/USD is likely to find support at 1.1318 levels and currently trading at 1.1388 levels. The pair has made session high at 1.1396 and hit lows at 1.1362 levels. The euro rose higher against dollar on Thursday as dovish comments from U.S. Federal Reserve Chairman Jerome Powell boosted demand for euro. Minutes from the Fed's Nov. 7-8 meeting showed that almost all Fed officials at their last meeting agreed another interest rate increase was likely to be warranted fairly soon, but also opened debate on when to pause further hikes and how to relay those plans to the public. The Fed has raised rates three times this year. Higher rates also increase the opportunity cost of holding gold, which does not pay interest. Many investors read the remarks as an indication that the Fed could tone down its aggressive monetary policy. Investors are now closely watching the upcoming meeting of Chinese and U.S. leaders at the G20 summit in Argentina. The dollar index, tracking it against a basket of six major currencies, rose 0.01 percent, with the euro up 0.17 percent to $1.1391.
GBP/USD is supported in the range of 1.2719 levels and currently trading at 1.2783 levels. It reached session high at 1.3311 and dropped to session low at 1.2752 levels. Britain's pound declined to hit two-week low against the dollar on Thursday as growing concerns about the UK parliament's vote on Brexit weighed on British currency. Barely four months before Britain is due to leave the EU, Prime Minister Theresa May is struggling to garner support from parliament for the agreement she sealed with EU leaders. Parliament is due to vote on the deal on Dec. 11. The possibility of a no-deal Brexit sent the pound to a two-week low earlier this week before it retraced some losses and currency analysts say a recovery is unlikely before the parliamentary vote, which will be a key risk event. Adding to the gloomy sentiment, the Bank of England warned on Wednesday that Britain risks a bigger hit to its economy than in the financial crisis if it crashes out of the EU without a deal. It said the pound could then lose a quarter of its value. The pound was trading down 0.5 percent against the dollar at $1.2760 per dollar. It was down half a percent against the euro at 89.14 pence.
USD/CAD is likely to find support at 1.3180 levels and is trading at 1.3282 levels. It has made intraday high at 1.3264 and lows at 1.3254 levels. The Canadian dollar edged higher against its U.S. counterpart on Thursday, building on gains from the day before as oil prices rallied and data showed that Canada ran a smaller-than-expected current account deficit in the third quarter. The country's current account deficit narrowed to C$10.34 billion in the third quarter from a revised C$16.68 billion deficit in the second quarter, Statistics Canada said. On Wednesday, the loonie hit a five-month low intraday at 1.3360 before rallying on comments from Federal Reserve Chairman Jerome Powell that were seen as dovish by some investors. Market players have also been weighing prospects for U.S.-China trade talks at the G20 Summit. U.S. Trade Representative Robert Lighthizer said on Wednesday that he was examining all available tools to raise U.S. tariffs on Chinese vehicles to the 40 percent duties that China is now charging on U.S.-produced vehicles. In addition to being a major commodities exporter, Canada runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows.
USD/JPY is supported around 113.00 levels and currently trading at 113.43 levels. It peaked to hit session high at 113.54 and made session lows at 113.24 levels. The U.S. dollar gained against the Japanese yen on Thursday as investors continued to digest comments from Federal Reserve Chairman Jerome Powell on Wednesday that took a more dovish turn than expected and sent the dollar tumbling. Powell injected investors with a strong dose of optimism on Wednesday, saying that the central bank's policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy U.S. economy, comments that many investors read as signaling the Fed's three-year tightening cycle is drawing to a close. The U.S. economy slowed in the third quarter as previously reported, but the pace was likely strong enough to keep growth on track to hit the Trump administration's 3 percent target this year, even as momentum appears to have moderated further early in the fourth quarter. The dollar, which has outperformed bonds and the benchmark S&P 500 stock index this year amid rising interest rates and safe-haven flows triggered by global trade tensions, was modestly higher. The dollar index, tracking it against a basket of six major currencies, rose 0.01 percent.
Equities Recap
European shares inched up on Thursday as dovish comments from Federal Reserve Chairman Jerome Powell helped offset uncertainty over a possible escalation in the U.S./China trade dispute.
UK's benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 0.31 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.6 percent.
Wall Street closed slightly lower on Thursday as tech and financial shares slumped, erasing earlier gains stemming from Federal Reserve minutes showing the central bank opened the debate on when to pause further interest rate hikes.
Dow Jones closed down by 0.11 percent, S&P 500 ended down by 0.21 percent, Nasdaq finished the day down by 0.29 percent.
Treasuries Recap
The benchmark 10-year Treasury yield fell as the two-year return rose on Thursday, flattening the yield curve, after minutes from the last Federal Reserve policy-making meeting showed October's market volatility would not deter the U.S. central bank from raising interest rates in December and beyond.
The reversal began overnight, with the 10-year yield falling briefly below the psychologically significant 3 percent level for the first time since Sept. 18. Thursday's minutes supported a further flattening and bolstered the view that the market's initial reaction to Powell's comments on Wednesday were overblown.
Commodities Recap
Gold held steady but pared some gains made early on Thursday as the dollar recovered and minutes from the U.S. Federal Reserve's recent meeting showed an interest rate hike was imminent in December.
Spot gold rose 0.2 percent to $1,223.75 per ounce at 15:12 p.m. EST (2012 GMT), having earlier hit its highest since Nov. 22 at $1,228.96.U.S. gold futures settled up barely changed at $1,224.10.
Oil reversed course and rose as much as 2 percent on Thursday, after industry sources said Russia had accepted the need to cut production, together with OPEC ahead of its meeting next week.
Brent crude futures rose 75 cents, or 1.3 percent, to settle at $59.51 a barrel, after touching an intraday high of $60.37 a barrel. U.S. crude futures rose $1.16, or 2.3 percent, to $51.45 a barrel, having hit a high of $52.20.
