Market Roundup
• U.S. Initial Jobless Claims k w/e, 233.00, 235.00 forecast, 222.00 previous.
• U.S. Jobless Claims 4-Wk Avg k w/e, 239.50, 248.25 previous.
• U.S. Continued Jobless Claims w/e, 1.89M, 1.89M forecast, 1.89 previous.
• U.S. Pending Sales Change MM Sep, 0.00%, 0.20% forecast, -2.60% previous.
• U.S. Pending Homes Index Sep, 106.00, 106.30 previous.
• U.S. Wholesale Inventories Adv Sep, 0.30%, 0.90% previous.
• U.S. Retail Inventories Advance Sep, -0.10%, 0.40% previous.
• U.S. Adv Goods Trade Balance US Sep, -64.14B, -63.30B previous.
• U.S. Build Permits R Numb MM Sep, 1.23M, 1.22M previous.
• U.S. House passes budget plan, paving way for tax cut legislation.
• Baby step, no big bang: ECB warily starts pulling back from loose money.
• Fed chair choice down to Powell, Taylor, one source tells Politico.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan CPI, Core Nationwide YY Sep, 0.8% forecast, 0.7% previous.
• 23:30 Japan CPI, Overall Nationwide Sep, 0.7% previous.
• 23:30 Japan CPI, Core Tokyo YY Oct, 0.5% forecast, 0.5% previous.
• 23:30 Japan CPI, Overall Tokyo Oct, 0.5% previous.
• 23:30 Japan CPI Index Excluding Fresh Food Sep, 100.3 previous.
• 00:30 Australia PPI QQ Q3, 0.5% previous.
• 00:30 Australia PPI YY Q3, 1.7% previous.
Looking Ahead - Events, Other Releases (GMT)
• 07:15 ECB's Peter Praet speaks at the Frankfurt Conference
• 10:45 ECB's Ignazio Angeloni participates in a panel discussion, Frankfurt
Currency Summaries
EUR/USD is likely to find support at 1.1650 levels and currently trading at 1.1663 levels. The pair has made session high at 1.1784 and hit lows at 1.1655 levels. The euro dipped against dollar on Thursday as the European Central Bank's decision to extend its bond purchases into 2018 at a reduced rate spurred selling of the single currency. As expected, the ECB said it would cut asset purchases to 30 billion euros from 60 billion euros starting in January while also extending the scheme by nine months to September. Draghi, who expressed some optimism about euro zone growth at his press conference, remained cautious about the region's sluggish inflation which would need continued heavy stimulus in the form of quantitative easing (QE) from the ECB. The ECB's move on its bond purchases came five weeks after the Federal Reserve announced its plan to shrink its $4.5 trillion balance sheet that had ballooned from three rounds of QE this month. At (1930 GMT), the euro was last trading at $1.1650, down 1.35 percent. It was poised for its steepest one-day loss against the greenback since Sept. 25. The single currency was down 1.20 percent at 132.76 yen. It retreated from 134.48 yen reached earlier on Thursday which was its strongest against the Japanese currency since December 2015.
GBP/USD is supported in the range of 1.3130 levels and currently trading at 1.3164 levels. It reached session high at 1.3221 and dropped to session low at 1.3152 levels. Sterling declined against dollar on Thursday as sterling skidded against the dollar, reversing earlier gains as confidence inspired by stronger-than-expected growth results was replaced by caution over the likelihood of an interest rate hike next week. While the European Central Bank announced the extension of its asset purchase programme until well into next year, investors are still waiting to see whether the Bank of England will go ahead with a rise in rates after its next meeting on Nov. 2. Though the market is still largely priced for the hike - the Bank's first in over a decade - the confidence boost inspired by Wednesday's strong third-quarter GDP figures largely receded on Thursday. The pound pulled back from a nine-day high against the dollar dropping by 0.6 percent on the day. By 1550 GMT it had steadied a touch above the day's lows, trading at $1.3180. Worries about the progress of Brexit negotiations also weighed on the sterling, with confusion over the details of the government's strategy adding to a climate of uncertainty.
USD/CAD is supported at 1.2779 levels and is trading at 1.2846 levels. It has made session high at 1.2855 and lows at 1.2788 levels. The Canadian dollar declined against its broadly firmer U.S. counterpart on Thursday, with the loonie trading near a 3-month low it hit the day before when the Bank of Canada cooled expectations for another interest rate hike this year. The Bank of Canada on Wednesday left its policy rate unchanged at 1 percent. Governor Stephen Poloz pointed to slack in the labor market as evidence that there could be more room for growth in the economy without spurring price rises. Average weekly earnings of non-farm payroll employees rose 0.9% in August from July, data from Statistics Canada showed on Thursday. Compared with August 2016, earnings climbed 1.7%.Perceived chances of another hike by the end of the year have fallen to 27 percent from 37 percent before the rate decision, the overnight index swaps market showed. The U.S. dollar climbed against a basket of major currencies after the European Central Bank extended its bond purchases, pressuring the euro. Prices of oil, one of Canada's major exports, steadied near multi-month highs after an unexpected increase in U.S. crude inventories.
USD/JPY is supported around 113.33 levels and currently trading at 113.96 levels. It peaked to hit session high at 114.00 and made session lows at 113.60 levels. The U.S. dollar strengthened against the Japanese yen on Thursday as the dollar gained after the European Central Bank said it would extend the lifespan of its bond-buying program. The bank also decided to cut back bond purchases, a widely expected move that was factored into gold prices and the dollar, and the extension of the bond-buying program took the wind out of the euro's rally against the dollar. Dollar was also boosted after fresh speculation that the next U.S. Federal Reserve chair could be a policy hawk following reports that current Chair Janet Yellen is out of the running. On Tuesday, U.S. President Donald Trump polled Republicans on whether they would prefer Stanford University economist John Taylor or Fed Governor Jerome Powell for the job. More senators preferred Taylor. The dollar has risen in recent days on optimism about forthcoming federal tax cuts and speculation U.S. President Donald Trump would select someone to head the Fed who may want to raise interest rates at a faster pace than current Fed Chair Janet Yellen. Trump is expected to announce his candidate before his Asian trip in early November. Dollar index that tracks the dollar against euro, yen and four other currencies hit a three-month high at 94.306. It was last trading at 94.64, up 1.07 percent on the day.
Equities Recap
European shares rose from four-week lows on Thursday, boosted by the European Central Bank's decision to keep stimulus taps open and hopes of a breakthrough in the Catalan crisis, while third-quarter earnings triggered sharp moves in individual stocks.
The UK's benchmark FTSE 100 closed up by 0.5 percent, FTSEurofirst 300 ended the day up by 1.07 percent, Germany's Dax ended up by 1. 5 percent, and France’s CAC finished the up by 1.6 percent.
U.S. stocks advanced on Thursday to recover some declines from the prior session, after a round of positive corporate earnings, although gains were curbed by a drop in the healthcare sector.
Dow Jones closed up by 0.31 percent, S&P 500 ended up 0.13 percent, Nasdaq finished the day down by 0.11 percent.
Treasuries Recap
U.S. Treasury yields inched higher on Thursday in choppy trading, undermined by a soft auction of U.S. 7-year notes which saw demand at its weakest since August last year.
In late trading, 10-year U.S. Treasury note yields were at 2.453 percent, up from Wednesday's 2.444 percent. Ten-year yields hit a seven-month peak on Wednesday.
U.S. 30-year bond yields were up at 2.959 percent, from 2.955 percent the previous session. Thirty-year yields had risen to a five-month high on Wednesday.
Commodities Recap
Gold fell to a nearly three-week low on Thursday as the dollar gained against the euro after the European Central Bank said it would extend the lifespan of its bond-buying program.
Spot gold was down 0.7 percent at $1,267.61 an ounce by 2:10 p.m. EDT (1810 GMT) after touching $1,266.27, its lowest since Oct. 6. U.S. gold futures for December delivery settled down $9.40, or 0.7 percent, at $1,269.60 per ounce.
Brent crude closed at a 27-month high on Thursday as the market focused more on comments from Saudi Arabia about ending a global supply glut instead of an unexpected increase in U.S. crude inventories and high U.S. production and exports.
Brent futures gained 86 cents, or 1.5 percent, to settle at $59.30 a barrel, its highest close since July 3, 2015.
U.S. West Texas Intermediate crude, meanwhile, rose 46 cents, or 0.9 percent, to settle at a six-month high of $52.64, its highest close since April 17.
