Market Roundup
• US w/e Initial Jobless Claims, 209k, 220k forecast, 220k previous
• US w/e Jobless Claims 4-Wk Avg, 219.25k, 222.50k previous
• US w/e Continued Jobless Claims, 1.723 mln, 1.685 mln forecast, 1.696 mln previous
• US Jun CPI MM, 0.1%, 0.0% forecast, 0.1% previous
• US Jun CPI YY, 1.6%, 1.6% forecast, 1.8% previous
• US Jun Core CPI YY, NSA, 2.1%, 2.0% forecast, 2.0% previous
• US Jun Core CPI MM, SA, 0.3%, 0.2% forecast, 0.1% previous
• Canada May New Housing Price Index 0.1%, 0.2% forecast 0.2% previous
• Russia Central Bank Reserves 518.3 B, 517.1 B previous
• US June Federal Budget Balance -8.0B, forecast -6.4B, previous -208.0B
• Oil hits six-week highs a Gulf of Mexico faces storm
• Dollar and U.S. Treasury yields sag after Powell’s comments
• Fed chairman’s remarks revive some bets on aggressive rate cut
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand NZ Business PMI
•04:30 Japan May Capacity Utilization (MoM)
• 04:30 Japan Industrial Production (MoM)
Looking Ahead - Events, Other Releases (GMT)
• 14:00 Federal Reserve Bank of Chicago President and Federal Open Market Committee (FOMC) voting member Charles Evans is to speak. His comments may determine a short-term positive or negative trend.
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Thursday, as outlook remained grim for greenback after Federal Reserve Chair Jerome Powell’s bleak comments on the U.S. economy, which bolstered expectations of an interest rate cut later this month. The dollar, however, trimmed losses against euro earlier on Thursday after data showed U.S. underlying consumer prices rose 0.3% in June, the most in nearly 1-1/2 years, with solid gains in the costs of a range of goods and service. The euro was up 0.04 percent at $1.1254. An index that tracks the dollar versus a basket of six major currencies was down 0.02 at 97.07. Immediate resistance can be seen at 1.1285 (21 DMA), an upside break can trigger rise towards 1.1322 (July 2nd high).On the downside, immediate support is seen at 1.1240 (50 DMA), a break below could take the pair towards 1.1192 (July 9th low).
GBP/USD: The pound edged higher thanks to broad-based dollar weakness, snapping a recent losing streak, but a weakening economy and Brexit fears kept a firm lid on gains. The British currency had briefly plumbed a two-year low this week at $1.2439 excluding a “flash crash” episode on Jan. 3 when it dropped to as low as $1.2409. On Thursday, it gained 0.21% to $1.2525 after peaking at $1.2571. Though Powell’s dovish tone in congressional testimony on Wednesday helped the British currency recover somewhat, it has fallen 3.7% in the last three months, the losses accelerating as Bank of England Governor Mark Carney this month appeared to signal the possibility of a rate cut. Immediate resistance can be seen at 1.2570 (11 DMA), an upside break can trigger rise towards 1.2607 (21 DMA).On the downside, immediate support is seen at 1.2424 (Lower Bollinger Band), a break below could take the pair towards 1.2400 (Psychological level).
USD/CAD:The Canadian dollar strengthened against its U.S. counterpart on Thursday, approaching last week's eight-month high, as oil prices rose and as the greenback broadly declined following dovish comments by Federal Reserve Chair Jerome Powell. The U.S. dollar was stuck at a five-day low after Powell on Wednesday kept the door open for U.S. interest rate cuts. The price of oil, one of Canada's major exports, rose as oil rigs in the Gulf of Mexico were evacuated ahead of a storm, while an incident involving a British tanker in the Middle East highlighted tensions in the region. U.S. crude oil futures were up 0.2% at $60.52 a barrel. At (1253 GMT), the Canadian dollar was trading 0.2% higher at 1.3052 to the greenback. The currency, which last Thursday notched an eight-month high at 1.3038, traded in a range of 1.3042 to 1.3080.Immediate resistance can be seen at 1.3092 (5 DMA), an upside break can trigger rise towards 1.3175 (21 DMA).On the downside, immediate support is seen at 1.3044 (Daily Low), a break below could take the pair towards 1.3000 (Psychological level).
USD/JPY: The dollar weakened against the Japanese yen on Thursday, after Federal Reserve Chairman Jerome Powell bolstered expectations the Fed would cut U.S. interest rates soon. n his first day of testimony before Congress on Wednesday, Powell confirmed the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war, and said the Fed stood ready to “act as appropriate”. A strong June U.S. jobs report earlier this month heightened expectations the Fed was more likely to cut by 25 basis points than by 50. But Powell’s cautious stance helped fuel bets on heftier easing at its next policy meeting on July 30-31.The dollar was down 0.1% at 108.44 yen, forced off a six-week high of 108.990 the previous day..Strong resistance can be seen at 108.58 (5 DMA), an upside break can trigger rise towards 108.88 (50 DMA).On the downside, immediate support is seen at 108.06 (21 DMA), a break below could take the pair towards 107.51 (July 3rd low).
Equities Recap
Europe’s stocks rally faded and global bond yields rose after jitters over corporate earnings and trade doused an early rally fuelled by enthusiasm over Federal Reserve Chairman Jerome Powell cementing rate cut expectations.
UK's benchmark FTSE 100 closed down by 0.28 percent, Germany's Dax ended down by 0.33 percent, France’s CAC finished the day down by 0.28 percent.
U.S. stocks rose on Thursday on improved bets of an interest rate cut following Fed chief Jerome Powell’s dovish remarks, while healthcare stocks were mixed after the Trump administration withdrew a rule that would kill rebates.
Dow Jones closed up by 0.85 percent, S&P 500 ended up by 0.22 percent, Nasdaq finished the down up by 0.08 percent.
Treasuries Recap
U.S. Treasury yields rose, with the biggest gains in long-dated maturities, after Thursday's auction of $16 billion 30-year bonds met weak demand and U.S. underlying consumer prices recorded their biggest gain in 1-1/2 years.
Indirect bidders, including foreign central banks, took the smallest percentage of a 30-year offering since February 2015. The 30-year yield jumped to a session high following the sale and was last up 7.1 basis points to 2.642%.
Commodities Recap
Gold prices slumped 1% on Thursday, erasing gains posted earlier in the session after stronger-than-expected consumer inflation in the United States cast doubts whether the U.S. central bank will cut interest rates as aggressively as expected.
Spot gold shed 1% to $1,404.40 per ounce as of 1:30 p.m. EDT (1730 GMT), dropping nearly $15 after U.S. consumer prices demonstrated a pick-up in underlying inflation, increasing in June by the most in nearly 1-1/2 years.U.S. gold futures settled 0.4% lower to $1,406.70 per ounce.
Oil prices fell on Thursday as OPEC forecast slower demand for its crude next year, with crude futures easing from their highest in more than a month after U.S. producers cut about half of their output in the Gulf of Mexico ahead of what could be one of the first major storms of the Atlantic hurricane.
Brent crude futures fell 49 cents to settle at $66.52 a barrel. During the session, they hit their highest since May 30 at $67.65 a barrel.
U.S. West Texas Intermediate (WTI) crude futures fell 23 cents to settle at $60.20 a barrel, after hitting their highest since May 23 at $60.94.
