Market Roundup
• U.S. touts EU trade deal, says others can also make progress.
• ECB's Draghi backs expectations for late 2019 rate hike.
• U.S. House passes defense bill targeting Chinese investments.
• U.S. and China clash at WTO over ideology, state's role.
• House Speaker rejects Rosenstein impeachment effort.
• US w/e Initial Jobless Claims, 217k, 215k forecast, 207k previous, 208k revised.
• US w/e Jobless Claims 4-Wk Avg, 218.0k, 220.50k previous, 220.75k revised.
• US w/e Continued Jobless Claims, 1.745 mln, 1.730 mln forecast, 1.751 mln previous, 1.753 mln revised.
• US Jun Durable Goods, 1.0%, 3.0% forecast, -0.4% previous, -0.3% revised.
• US Jun Non-defense Cap Ex-Air, 0.6%, 0.4% forecast, 0.3% previous, 0.7% revised.
• US Jun Wholesale Inventories Adv, 0.0%, 0.5% forecast, 0.6% previous.
• US Jun Retail Inventories Ex-Auto Adv, 0.3%, 0.1% previous.
• CA May Average Weekly Earning, 2.87%, 2.49% previous, 2.42% revised.
• EU rejects Britain's key elements of special customs plan after Brexit.
Looking Ahead - Economic Data (GMT)
• 26 Jul 23:30 Japan Jul CPI Core Tokyo YY, 0.7% forecast, 0.7% previous
• 26 Jul 23:30 revised Jul CPI, Overall Tokyo, 0.6% previous
• 27 Jul 01:30 Australia Q2 PPI YY, 1.7% previous
• 27 Jul 01:30 Australia Q2 PPI QQ, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
• No major event scheduled
Currency Summaries
EUR/USD is likely to find support at 1.1610 levels and currently trading at 1.1646 levels. The pair has made session high at 1.1699 and hit lows at 1.1638 levels. The euro fell on Thursday as the European Central Bank clung to its easy monetary policy and signaled no change in its timetable to move away from its ultra-low rate policy and to end its asset bond purchase program.ECB President Mario Draghi said at a press conference following the ECB's policy decision while confident about regional inflation achieving ECB's 2-percent goal, rising tariffs and other trade barriers would hurt the growth of the 19-member economic bloc. Draghi's reticence persisted in the aftermath of a meeting between U.S. President Donald Trump and European Commission chief Jean-Claude Juncker on Wednesday. On the data front, New orders for key U.S.-made capital goods increased more than expected in June and shipments surged, pointing to solid growth in business spending on equipment in the second quarter. The Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.6 percent last month after an upwardly revised 0.7 percent increase in May.The euro was down 0.7 percent at $1.1642 and 0.5 percent lower at 129.480 yen data showed. An index that tracks the dollar against six major currencies was up 0.4 percent at 94.765, rebounding from a two-week low reached earlier Thursday.
GBP/USD is supported in the range of 1.3066 levels and currently trading at 1.3109 levels. It reached session high at 1.3168 and dropped to session low at 1.3103 levels. Sterling dipped against the dollar on Thursday as a stronger dollar combined with mounting uncertainty over Brexit negotiations, offsetting the positive impact of bets on a Bank of England interest rate hike next week. With just over eight months left until Britain is due to leave the European Union, there is little clarity about how trade will flow as Prime Minister Theresa May tries to strike a deal with the bloc. May on Thursday sought to reassure the public about government plans to stockpile medicines and blood products ahead of a possible no-deal Brexit. The pound has been vulnerable to Brexit's to and fro in recent weeks, gaining on hopes May will secure a trade deal that keeps Britain close to Europe and falling on worries the talks will collapse and leave it isolated. Brexit has overshadowed the impact of monetary policy, the usual driver for currency performance, on the pound. The pound rose to intraday high of $1.3213 before tumbling as low as $1.3105 in US trading as the dollar rallied on the back of a falling euro. Sterling, which has been much less volatile against the euro, firmed 0.2 percent to 88.74 pence against the single currency. The euro was sent lower by the European Central Bank reaffirming that rates would remain as they are through the summer of 2019.
USD/CAD is supported at 1.3000 levels and is trading at 1.3070 levels. It has made session high at 1.3091 and lows at 1.3027 levels. The Canadian dollar edged lower against the greenback on Thursday, consolidating its gains driven by trade optimism from the day before, as data pointing to solid U.S. business spending boosted the greenback. The U.S. dollar rebounded from a two-week low intraday against a basket of major currencies after data showed new orders for key U.S.made capital goods increased more than expected in June and shipments surged. On Wednesday, the currency touched its strongest in nearly six weeks at C$1.3025 after Canadian and Mexican policymakers said they were optimistic about prospects for the North American Free Trade Agreement and a breakthrough in U.S.-EU trade talks. Canada runs a current account deficit, so its economy could be hurt if the flow of trade or capital slows. The loonie touched the C$1.3025 level again on Thursday, while its weakest was C$1.3061. U.S. crude oil futures dipped 0.1 percent to $69.25 a barrel even as Saudi Arabia suspended its oil shipments through a Red Sea strait in response to an attack on two of the country's tankers. The Canadian dollar was last trading 0.1 percent lower at C$1.3072 to the greenback.
USD/JPY is supported around 110.56 levels and currently trading at 111.19 levels. It peaked to hit session high at 111.23 and made session lows at 110.91 levels. The dollar strengthened against the Japanese on Thursday as greenback was boosted after an agreement between the United States and European Union on Wednesday eased some trade tensions. U.S. President Donald Trump agreed on Wednesday to refrain from imposing car tariffs on the European Union while the two sides negotiate to cut other trade barriers, easing the threat of a transatlantic trade war. After a meeting at the White House, Trump and European Commission President Jean-Claude Juncker said the talks would also seek to "resolve" U.S. tariffs on steel and aluminum and Europe's retaliatory duties marking a step back from Trump's signature import protections for American metals producers. Meanwhile, the European Central Bank reaffirmed that it will end its stimulus program this year, saying the risks from an unpredictable global trade conflict did not warrant any deviation from its plan. On the data front, domestic core capital goods orders rose 0.6 percent in June, beating a forecast of a 0.4 percent increase among analysts polled. Investors are next focused on the Bank of Japan’s meeting next week for signs of how or when it may alter its massive stimulus. Investors are also watching out for second-quarter U.S. economic growth data, which is expected on Friday.
Equities Recap
European shares rose to a six-week high on Thursday as hopes of a breakthrough in U.S.-EU trade talks boosted carmakers, while the market also digested a flurry of company earnings reports.
UK's benchmark FTSE 100 closed up 0.15 percent, the pan-European FTSEurofirst 300 ended the day up by 0.88 percent, Germany's Dax ended up by 1.91 percent, France’s CAC finished the day up by 0.90 percent.
A plunge in Facebook Inc's shares pushed the Nasdaq down more than 1 percent on Thursday, the index's biggest one-day drop in a month, but industrial stocks rose after the United States and the European Union said they would negotiate on trade.
Dow Jones closed up by 0.45 percent, S&P 500 ended down by 0.30 percent, Nasdaq finished the day down by 1.02 percent.
Treasuries Recap
U.S. benchmark Treasury yields traded at six-week highs on Thursday as investors waited for what many analysts expect to be a strong reading of gross domestic product data for the second quarter on Friday.
Benchmark 10-year notes fell 10/32 in price on the day to yield 2.971 percent, after earlier rising to 2.976 percent, its highest since June 14.
Benchmark yields have struggled to break above the 2.97 percent level that has been tested multiple times this week.
Commodities Recap
Gold edged lower on Thursday under pressure from a stronger dollar and in response to easing trade tensions after the United States agreed to refrain from imposing tariffs on cars from the European Union.
Spot gold dropped 0.4 percent to $1,225.89 an ounce by 1:34 p.m. EDT (1734 GMT), after it rose 0.6 percent on Wednesday. Earlier in the session, the metal hit $1,235.16, its highest in more than a week.
U.S. gold futures for August delivery settled down $6.10, or 0.5 percent, at $1,225.70 per ounce.
Oil prices rose for the third consecutive day on Thursday after Saudi Arabia suspended oil shipments through a strait in the Red Sea following an attack on two oil tankers and as trade tensions between the United States and the European Union eased.
Brent futures rose 61 cents to settle at $74.54 a barrel, a 0.8 percent gain. The contract earlier touched $74.83 a barrel, highest since July 16. U.S. West Texas Intermediate (WTI) crude futures were up 31 cents, settling at $69.61, a 0.5 percent gain.
