Market Round
• U.S. jobless claims fall 4k to 259k, as labor market remains strong; 4-wk MA -1.75k, continuing claims -7k.
• ECB keeps rate steady, No change to asset-buying programme.
• ECB’s Draghi: Didn’t discuss extension of APP, inflation likely to remain low over next few months.
• ECB’s Draghi: Baseline scenario subject to downside risk, will preserve substantial amount of monetary support.
• ECB’s Draghi: Econ recovery to continue at moderate but steady pace, recovery dampened by subdued foreign demand.
• Markets drop after Draghi fails to impress; EUR to 2-wk high, DAX -1.53%, S&P off slightly near NY EOD.
• Biggest weekly U.S. crude oil inventory drop since 1999, imports to gulf coast hit record low owing to weather
• Latin American stocks, currencies slip on lack of ECB stimulus hints.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Electronic Card Retail Sales month Aug 0.3%-previous
• 22:45 New Zealand Election Card Retail Sales YY Aug 5.8%- previous
• 01:30 China PPI YY Aug forecast -0.9%, -1.7%- previous
• 01:30 China CPI YY Aug forecast 1.7%, 1.8%- previous
• 01:30 China CPI MM Aug forecast 0.3%, 0.2%- previous
• 01:30 Australia Housing Finance Jul forecast -1.5%, 1.2%- previous
• 01:30 Australia Invest Housing Finance Jul 3.2%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1203 levels and currently trading at 1.1257 levels. The pair has made session high at 1.1325 and hit lows at 1.1239 levels. Euro inched higher against US dollar as Euro continued its yesterday’s bullish momentum on Thursday after the European Central Bank left interest rates unchanged and stopped short of a formal commitment to further expand its asset-purchase program. However, the dollar turned positive as the greenback was spurred by a jump in oil prices. The euro rose to a session high of $1.1326 against the dollar during Draghi's speech, its strongest since Aug. 26. It pared gains following the oil inventory data and was last up 0.2 percent at $1.1260.The advance by the euro was due largely to dashed expectations of an extension of the ECB's stimulus program. The dollar index, which tracks the greenback against six major world currencies, erased earlier losses to turn positive and was last up 0.1 percent. During Draghi's remarks, it fell to its lowest since Aug. 26.
GBP/USD is supported in the range of 1.3250 currently trading at 1.3297 levels. It reached session high at 1.3341and hit low at 1.3282 levels. British pound fell to a one-week low on Thursday after the European Central Bank stuck to its timetable for its stimulus programme and President Mario Draghi said an extension of its asset purchase plan had not been discussed. On Wednesday, weak British manufacturing output data for July painted a less rosy picture of the aftermath of Britons' vote in June to leave the European Union, serving a reminder to investors about the risks lurking. The data were the first official figures to cover output solely for the period after the vote. Britain was plunged into political chaos in the weeks after the vote and before the formation of a new government under Prime Minister Theresa May. Sterling fell 0.4 percent against the dollar to $1.3290, having fallen for the first time in six days on Wednesday, and retreating from a seven-week high of $1.3445 struck on Tuesday.
USD/CAD is supported at 1.2820 levels and is trading at 1.2925 levels. It has made session high at 1.2934 and lows at 1.2869 levels. The Canadian dollar declined against its U.S. counterpart on Thursday, as the loonie was pressured by the Bank of Canada's more dovish stance, although losses for the commodity-linked currency were restrained as oil rallied. Losses for the loonie follow the currency's retreat from a nearly three-week high on Wednesday as the Bank of Canada warned that the economy could be weaker than it anticipated just two months ago as exports disappointed. Canada's economy is still running on two speeds, with household spending growth holding up even as sectors linked to low commodity prices struggle, Bank of Canada Deputy Governor Timothy Lane said on Thursday. The Canadian dollar was last trading at C$1.2928 to the greenback, or 77.35 U.S. cents, weaker than Wednesday's close of C$1.2900.
AUD/USD is supported around 0.7600 levels and currently trading at 0.7640 levels. It hit session high at 0.7716 and made session lows at 0.7637 levels. The Australian dollar edged higher against US dollar on Thursday as Aussie was boosted on upbeat Chinese imports data which unexpectedly jumped for the first time in 22 months in a sign that demand in the world's second-largest economy was picking up. The Australian dollar rose as high as $0.7687, not too far from a three-week top of $0.7698 touched on Wednesday, after the positive news from Australia's No.1 trading partner. The Aussie has been flirting with 77 cents, a key resistance level on the charts, but has failed to trade above it. On the data front, Australia's July trade deficit was slightly better than expected at A$2.41 billion ($1.85 billion). The Aussie has been among the best performing G10 currencies this year, rising 5.4 percent thanks in large part to offshore interest in carry trades - where investors borrow at low rates in yen or euros to buy higher-yielding assets.
Equities Recap
European stock markets fell on Thursday, turning lower after the European Central Bank stuck to its timetable for its stimulus programme and President Mario Draghi said an extension had not been discussed.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.38 percent, Germany's Dax ended down by 0.8 percent, France’s CAC finished the day down by 0.3 percent.
U.S. stocks slipped on Thursday, weighed by Apple after its latest iPhone failed to impress investors, but gains in energy shares limited the decline.
Dow Jones closed down by 0.26 percent, S&P 500 ended down by 0.23 percent, Nasdaq finished the day down by 0.47 percent.
Treasuries Recap
U.S. Treasury yields rose across the board on Thursday, in line with European bonds, after European Central Bank President Mario Draghi left the door open for additional monetary policy easing but gave no indication that more stimulus was actually coming.
The 30-year Treasury bond fell more than a point in price to yield 2.314 percent, from 2.236 percent on Wednesday.
Long-dated Treasury debt yields also edged higher on data showing U.S. initial weekly jobless claims fell to a seasonally adjusted 259,000 for the week ended Sept. 3, the lowest level since mid-July.
Prices of two-year notes also rose, up 2/32 yielding 0.774 percent.
Commodities Recap
Gold fell on Thursday after the European Central Bank held interest rates at record lows but refrained from adding new stimulus as some investors had expected.
Spot gold fell 0.6 percent to $1,337.4 an ounce by 2:39 p.m. EDT (1839 GMT), with U.S. gold futures settling down 0.6 percent at $1,341.6.
Oil prices surged over 4 percent on Thursday, with Brent briefly touching $50 a barrel for the first time in two weeks, after a surprisingly huge drawdown in U.S. crude stocks as Gulf Coast imports slumped to a record low.
Brent rose $2.01, or 4.2 percent, to settle at $49.99 a barrel, its highest close in almost three weeks.
U.S. crude ended at $47.62 per barrel, up $2.12, or 4.7 percent, the biggest daily percentage gain for U.S. futures since April.
