Market Roundup
• ECB cuts deposit rate to record low
• U.S. to delay tariff increase on Chinese imports
• U.S. core CPI rises, but Fed still expected to ease
• Mnuchin: govt seriously considering 50-year bond issue next year
• US Continuing Jobless Claims 1,670K, 1,690K forecast, 1,674K previous
• US Jobless Claims 4-Week Avg 212.50K , 216.75K previous
• US Initial Jobless Claims 204K, 215K forecast, 219K previous
• US Aug Core CPI (YoY) 2.4%, 2.3% forecast, 2.2% previous
• US Aug CPI (MoM) 0.1%,0.1% forecast ,0.3% previous
• Canada Jul New Housing Price Index (MoM) -0.1%,-0.1% previous
• Russia Central Bank reserves (USD) 532.7B, 530.5B previous
• US Aug Federal Budget Balance -200.0B, -195.0B forecast, -120.0B previous
Looking Ahead - Economic Data (GMT)
• New Zealand Aug Business NZ PMI 48.2 previous
• Japan Jul Capacity Utilization (MoM) -2.6% previous
• Japan Jul Industrial Production (MoM ) 1.3% forecast,-3.3% previous
Looking Ahead - Events, Other Releases (GMT)
No significant events
Currency Summaries
EUR/USD: The euro gained against the dollar on Thursday, erasing earlier losses, after the European Central Bank launched new stimulus but failed to live up to some dovish market expectations. The ECB cut its deposit rate to a record low -0.5% from-0.4% and will restart bond purchases of 20 billion euros month from November. It also said it expects bond purchases to run for as long as necessary and end shortly before it starts raising the key ECB interest rates. The euro was up 0.01 percent at $1.1064. An index that tracks the dollar versus a basket of six major currencies was down 0.27 at 98.36. Immediate resistance can be seen at 1.1064 (Daily high), an upside break can trigger rise towards 1.1129 (50 DMA).On the downside, immediate support is seen at 1.1023 (11 DMA), a break below could take the pair towards 1.0926 (Daily low).
GBP/USD: Sterling strengthened against dollar on Thursday, as pound firmed against the dollar, as the euro enjoyed a broad rebound in the wake of the European Central Bank’s new stimulus announcement. The ECB cut its deposit rate by 10 basis points and announced a bond purchase programme of 20 billion euros a month, starting from November, but the move failed to live up to some dovish market expectations, leading to some volatile euro moves. The single currency had initially fallen after the ECB statement but but rebounded across the board as ECB President Mario Draghi hinted at the limits of monetary policy and called on governments to expand budget spending.r the ECB statement. The pound trimmed initial losses to stand up 0.1% on the day at $1.2336. Immediate resistance can be seen at 1.2411 (Higher BB), an upside break can trigger rise towards 1.2432 (Ichimoku Cloud Top).On the downside, immediate support is seen at 1.2272 (5 DMA), a break below could take the pair towards 1.2231 (21 DMA).
USD/CAD: The Canadian dollar weakened to a six-day low against its U.S. counterpart on Thursday, as oil prices fell and investors grew skeptical about a potential thawing of trade tensions between the United States and China. Oil prices fell after a media report cast doubt on the possibility of an interim U.S.-China trade deal and as a meeting of the OPEC+ alliance yielded no decision on deepening crude supply cuts. U.S. crude oil futures settled 1.2% lower at $55.09 a barrel, extending this week's decline. Meanwhile, data from Statistics Canada on Thursday showed that new home prices fell 0.1% in July. Prices have been flat or falling since August 2018. The Canadian dollar was trading 0.2% lower at 1.3215 to the greenback.Immediate resistance can be seen at 1.3220 (9 DMA), an upside break can trigger rise towards 1.3258 (21 DMA).On the downside, immediate support is seen at 1.3118 (Lower BB), a break below could take the pair towards 1.3100 (Psychological level).
USD/JPY: The U.S. dollar strengthened against the yen on Thursday, as rising bond yields and stronger dollar dented deman for safe-haven assets. U.S. Treasury yields climbed to a multi-week peak, tracking German bonds, as hopes of easing U.S.-China trade tensions and expectations of fiscal stimulus measures by global central banks buoyed risk sentiment. The earlier ECB action overshadowed a stronger-than-expected U.S. core inflation number, which posted the largest annual gain in a year. The consumer price index excluding the volatile food and energy components gained 0.3% for a third straight month. Strong resistance can be seen at 108.20 (Daily High), an upside break can trigger rise towards 109.00 (Psychological level).On the downside, immediate support is seen at 107.74 (5 DMA), a break below could take the pair towards 107 .02 (11 DMA).
Equities Recap
A gauge of global stock markets rose for a seventh straight day in choppy trading on Thursday after hints of progress in the U.S.-China trade dispute, pushing bond yields off lows hit earlier on the heels of new stimulus measures put forth by the European Central Bank.
The UK's benchmark FTSE 100 closed up by 0.09 percent, Germany's Dax ended up by 0.41 percent, and France’s CAC finished the the day up by 0.44 percent.
Wall Street advanced on Thursday, and the S&P 500 hovered a hair’s breadth below its all-time high, buoyed by positive developments on the U.S.-China trade front and a promise of continued stimulus from the European Central Bank.
Dow Jones closed up by 0.17 percent, S&P 500 ended up 0.29 percent, Nasdaq finished the day up by 0.30 percent.
Treasuries Recap
U.S. Treasury prices fell on Thursday with 10-year yields hitting five-week highs, following a report that suggests advisers to President Donald Trump were mulling an interim trade deal with China and soft demand at a 30-year bond auction.
In mid-afternoon U.S. trading, U.S. benchmark 10-year note yields were up 5.10 basis points at 1.7837% after hitting rose 1.801%, their highest level since Aug. 5.Thirty-year bond yields were 5.80 basis points higher at 2.2658%. They reached 2.28%, the highest since Aug.12.
Commodities Recap
Gold prices fell to their lowest level in nearly a month on Tuesday, as rising bond yields and the dollar dented the allure of safe-haven assets.
Spot gold was down 0.4% at $1,492.20 per ounce as of 1:44 p.m. EDT (1744 GMT), having earlier hit its lowest level since Aug. 13, at $1,486. U.S. gold futures settled 0.8% lower at $1,499.20 per ounce.
Oil prices fell about 1% on Thursday after a media report cast doubt on the possibility of an interim U.S.-China trade deal and as a meeting of the OPEC+ alliance yielded no decision on deepening crude supply cuts.
Brent crude futures settled at $60.38 a barrel, shedding 43 cents, or 0.71%. WTI crude futures settled at $55.09 a barrel, losing 66 cents, or 1.18%.
