Market Roundup
• US jobless claims rise in latest week 268k v 253k forecast, 251k previous, 5-month high.
• US continuing claims 2.081m v 2.040m forecast, 2.043m -previous.
• US Markit Nov Mfg final PMI 54.1 v 53.9-previous.
• US ISM Mfg PMI 53.2 v forecast 52.2, 51.9 previous; price paid up a touch v previous, employment dips slightly.
• Atlanta Fed’s GDPNow Q$ GDP forecast raised to 2.9% from 2.4% on Nov 30.
• Fed's Kaplan sees rate hikes ahead and no recession; stronger USD must be taken into a/c in setting policy.
• UK Brexit minister: would consider paying into EU for market access, GBP boosted on soft-Brexit rhetoric.
• France’s Hollande: will not seek second mandate, will focus on leading France in coming months.
• Oil surge, upbeat data send EGB yields sharply higher, Bond yields up 2-6 bps, inflation f/c at 11-month high.
• Euro Zone factory growth strongest since Jan ‘14, EZ Nov final factory PMI 53.7; Prices rise at fastest since Aug ’11.
• Euro Zone jobless hits seven-year low, drops below 10 pct.
• DoubleLine’s Gundlach: USD going to go down, bond yields & stocks have peaked, gold to move up short-term.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia Retail Sales MM Oct forecast 0.3%, 0.6%-previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan BoJ Head of Economics Research Division Koji Nakamura to speaks on negative interest rates in Asian Development Bank Institute conference.
Currency Summaries
EUR/USD is likely to find support at 1.0580 levels and currently trading at 1.0647 levels. The pair has made session high at 1.0659 and hit lows at 1.0583 levels. Euro rose against dollar on Thursday as dollar declined as traders booked profits and avoided making big bets on dollar ahead of Friday's government payrolls report. The euro strengthened after a report surfaced that European Central Bank will extend its bond purchases beyond next March and consider sending a formal signal next week that the asset purchase program will eventually end. The dollar's index against a basket of six major currencies fell 0.3 percent to 101.22. It reached a 13-1/2-year peak of 102.05 last week and gained about 3 percent for a second month in November. The euro was up 0.6 percent at $1.0649 and up 0.2 percent against the yen, at 121.38 yen. Investors are now turning their attention to non-farm payrolls data to assess whether the Federal Reserve could raise interest rates at its meeting on Dec. 13-14.The central bank has been preparing the markets for a rate increase amid improving economic conditions. Some Fed officials have said President-elect Donald Trump's policies could boost inflation, pushing it closer to the central bank's 2 percent target.
GBP/USD is supported in the range of 1.2541 levels and currently trading at 1.2574 levels. It reached session high at 1.2692 and dropped to session low at 1.2555 levels. The British pound strengthened against the greenback on Thursday after Britain's Brexit minister said the government would consider paying into the EU budget for market access. The pound recovered from an initial dip after weaker-than-expected data to add over 1 percent in trade-weighted terms on the day. Britain is formulating its negotiating position ahead of formal divorce talks next year, and businesses want reassurance that it won't seek a "hard Brexit" that would prioritise curbing immigration over remaining in the EU single market. Sterling, coming off the back of its best month against the dollar since March, hit a two-month high against the greenback after Davis's comments and dollar dipped ahead of Friday's non-farm payrolls data. Sterling, which fell below $1.20 in a flash crash at the start of October, rose to a two-month high against the dollar at $1.2696 before retreating back to trade at 1.2590.
USD/CAD is supported at 1.3300 levels and is trading at 1.3318 levels. It has made session high at 1.3394 and lows at 1.3300 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil extended its rally after major petroleum producers agreed to cut output for the first time in eight years. The Organization of the Petroleum Exporting Countries reached the agreement on Wednesday after de-facto leader Saudi Arabia accepted "a big hit" and dropped a demand that archrival Iran also slash production. Gains for the loonie also came after data on Wednesday showed that the economy accelerated in the third quarter at its fastest pace in more than two years as it benefited from a rebound in oil exports, cementing expectations that the Bank of Canada will keep interest rates steady next week. The Canadian dollar was last trading at C$1.3311 to the greenback, or 74.82 U.S. cents, stronger than Wednesday's close of C$1.3429, or 74.47 U.S. cents. Canada's employment report is due on Friday. The economy is expected to have shed 20,000 jobs in November after two months of strong gains.
AUD/USD is supported around 0.7362 levels and currently trading at 0.7414 levels. It hit session high at 0.7418 and made session lows at 0.7368 levels. The Australian dollar strengthened on Thursday as dollar declined ahead of U.S. nonfarm payrolls data and soaring oil prices propelled Aussie bulls. Aussie held steady against its U.S. counterpart around $0.7415 after earlier dipping towards $0.7371. Oil prices jumped percent on Thursday, with Brent crude hitting its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut more quickly. Oil prices surged 4 percent on Thursday, with Brent crude at its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut more quickly. On the data front, U.S. factory activity accelerated to a five-month high in November, suggesting that the manufacturing sector was regaining its footing after a prolonged slump. Institute for Supply Management (ISM) said its index of national factory activity rose 1.3 percentage points to a reading of 53.2 last month, the best since June. A reading above 50 indicates an expansion in manufacturing, which accounts for about 12 percent of the U.S. economy.
Equities Recap
European shares edged lower on Thursday in a broad-based sell-off, halting a two-day rally and retreating from the previous session's three-week highs, led lower by drops in TalkTalk and Elekta.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.69 percent, Germany's Dax ended down by 1.2 percent, France’s CAC finished the day down by 0.5 percent.
A sharp decline in technology stocks pulled both the Nasdaq and the S&P 500 indexes into the red on Thursday, while the Dow managed to notch a record closing high with a lift from bank and energy shares.
Dow Jones closed up by 0.36 percent, S&P 500 ended down 0.35 percent, Nasdaq finished the day down by 1.36 percent.
Treasuries Recap
U.S. Treasury yields surged on Thursday with benchmark yields touching their highest levels in just under a year and a half on expectations that gains in oil prices and U.S. President-elect Donald Trump's policies would fuel higher inflation.
U.S. 10-year Treasuries were last down 22/32 in price to yield 2.4463 percent, up about eight basis points from its yield late on Wednesday of 2.367 percent.
U.S. 30-year Treasuries were last down 1-21/32 in price to yield 3.105 percent, up about nine basis points from late Wednesday's yield. Prices on 30-year Treasuries briefly fell below two full points.
Commodities Recap
Gold hit its lowest since February on Thursday, extending losses after its biggest monthly decline in more than three years, as a surge in oil prices boosted bond yields, denting interest in non-yielding gold as an alternative investment.
Spot gold was flat at $1,172.65 an ounce by 2:49 p.m. EST (1949 GMT), having reached a 10-month low of $1,160.38. U.S. gold futures for February delivery settled down 0.4 percent at $1,169.40 per ounce.
Oil prices surged 4 percent on Thursday, with Brent crude at its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut more quickly.
Benchmark Brent futures settled 4.1 percent or $2.10 higher at $53.94. Earlier in the session, prices jumped as much as 5.2 percent to $54.53 a barrel, the highest level since July 27, 2015.
U.S. crude ended the session at $51.06, up $1.62 or 3.3 percent on the day. Its session high was $51.80 a barrel, 13 cents below its 2016 high.
