Market Roundup
• US weekly jobless claims rise less than expected (247k v255k).
• US import prices rise 0.4% v -0.2% previous.
• US Senate approves measure launching Obamacare repeal process.
• Fed’s Bullard: no reason to dramatically move rates now, sees slower growth in ‘17/’18.
• Fed’s Harker: 3 modest int rate hikes appropriate in’17 if economy stays on track.
• Fed’s Harker: Fed can consider trimming bond holding when key rate hits 1 pct.
• Fed’s Evans: US growth of perhaps 1.75% a bad sign for US households & global economy.
• Fed’s Lockhart: if inflation overshoots there may be demands to raise rates in preemptive way.
• Fed’s Kaplan sees 3 rate hikes in 2017, US near full employment, inflation heading to 2%.
• ECB minutes: a few members did not support bond extension welcomed scaling down.
• ECB Minutes: changing issue or issuer limit unsuitable due to legal, communication & reputational risks.
• ECB’s Villeroy: concerns about a return of inflation are very exaggerated.
• Germany’s Schaeuble: Prefers interest rates to not be so low (The European- magazine).
• Templeton’s Hasenstab: Fed behind curve given growth/inflation outlook, EUR below parity in ’17.
• USD tumbles to 5-wk lows as Trump trade loses steam; MXN rebounds from record low vs USD.
• Saudis cut oil output to lowest in 2-yrs (below 10mn bpd), pledge further reductions in February.
Looking Ahead - Economic Data (GMT)
• --:-- ChinaExports YY* Dec forecast -3.5%, 0.10%-previous
• --:-- China Imports YY* Dec forecast 2.7%, 6.70%- previous
• --:-- China Trade Balance USD* Dec forecast 46.50b, 44.61b- previous
• 23:50 Japan Foreign Bond Investment w/e -501.4b- previous
• 23:50 JapanForeign Invest JP Stock w/e 58.5b- previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0406 levels and currently trading at 1.0414 levels. The pair has made session high at 1.0470 and hit lows at 1.0424 levels. The euro declined slightly against the U.S. dollar on Thursday as dollar recovered from yesterday’s losses as investors awaited fourth-quarter earnings and details of President-elect Donald Trump's economic policy. Trump on Wednesday gave no details on tax cuts or infrastructure spending in his first news conference since the election. Speculators had driven the dollar index, which measures the greenback against a basket of six major currencies, to a one-week high Wednesday in anticipation that Trump's first news conference since his Nov. 8 victory would give more detail on new fiscal spending and tax measures to repatriate U.S. corporate capital held overseas. Instead, the event was dominated by debate over Russian hacking and unsubstantiated claims that he had been caught in a compromising position in Moscow. The dollar index tumbled to 100.720 Thursday after touching, its weakest since Dec. 8 after touching 102.950 before the news conference Wednesday. The euro was last trading against the dollar at $1.0620.
GBP/USD is supported in the range of 1.2221 levels and currently trading at 1.2273 levels. It reached session high at 1.2775 and dropped to session low at 1.2221 levels. Sterling slipped against US dollar on Thursday after a spokeswoman said British Prime Minister Theresa May will give a speech next week on her plans for leaving the European Union, which sparked fears that she would suggest Britain will undergo a "hard Brexit". Sterling skidded to its lowest levels for almost 32 years -excluding a "flash crash" in October - this week, after May said over the weekend that Britain would not keep "bits" of EU membership when it leaves the bloc. The pound had rebounded to as high as $1.2317 earlier on Thursday against a dollar weakened by a lack of detail on President-elect Donald Trump's spending plans in his first news conference since his election on Wednesday. But after the news of May's speech, it slid backwards to trade at $1.2155, lower on the day though well clear of Wednesday's low of $1.2038.
USD/CAD is supported at 1.3470 levels and is trading at 1.3538 levels. It has made session high at 1.3557 and lows at 1.3514 levels. The Canadian dollar lost ground against its U.S. counterpart on Thursday as the dollar recovered some ground from losses suffered from U.S. President-elect Donald Trump's news conference a day earlier. The price of oil, one of Canada's major exports, rose on reports key OPEC members were cutting production as promised and on forecasts of strong demand growth in China.On the data front, Canadian new housing prices rose 0.2 percent in November from October amid price increases across much of Ontario, Statistics Canada said. Meanwhile, the Teranet-National Bank Composite House Price Index showed home prices rose 0.3 percent in December from a month earlier as prices continued to soar in Toronto, the biggest market, and Victoria, while Vancouver prices fell again. The Canadian dollar was last trading at C$1.3136 to the greenback.
AUD/USD is supported around 0.7159 levels and currently trading at 0.7168 levels. It hit session high at 0.7178 and made session lows at 0.7159 levels. The Australian dollar stayed near four-weeks high against dollar on Thursday as Australian dollar was supported by higher oil prices. Trump's first news conference since the Nov. 8 election contained no details on tax cuts and infrastructure spending, two factors that had fuelled the five-week rally in stocks and a selloff in global bond markets. He instead took aim at targets that included pharmaceutical companies and U.S. intelligence agencies. Trump accused the intelligence agencies of practices reminiscent of Nazi Germany after leaks led to some U.S. media outlets to report unsubstantiated claims that Russia possessed compromising information about him. The Australian dollar was last trading at $0.7488, having rallied almost 1 percent overnight to as far as $0.7519. That was the largest single day rise since Sept.6 and its highest reading since Dec. 14.
Equities Recap
European shares fell on Thursday weighed down by Fiat Chrysler, which wiped out one sixth of its value in a late session slide after the U.S. accused the car maker of excess diesel emissions, raising worries of heavy fines.
The UK's benchmark FTSE 100 closed up by 0.1 percent, FTSEurofirst 300 ended the day down by 0.67 percent, Germany's Dax ended down by 1 percent, and France’s CAC finished the day down by 0.4 percent.
The three major U.S. stock indexes declined on Thursday as investors awaited fourth-quarter earnings and details of President-elect Donald Trump's economic policy, bringing a pause to a rally driven by his campaign promises of lower taxes and fiscal stimulus.
Dow Jones closed down by 0.33 percent, S&P 500 ended down 0.22 percent, Nasdaq finished the day down by 0.29 percent.
Treasuries Recap
U.S. Treasury debt yields declined on Thursday, with the 30-year yield hitting a two-month low in advance of $12 billion of 30-year bond supply, the final leg of this week's $56 billion in longer-dated government debt supply.
The yield on benchmark 10-year Treasury notes was 2.332 percent, down 4 basis points from late Wednesday. Earlier it fell below its 50-day moving average, a bullish technical signal, for the first time since late September.
The 30-year bond yield was down nearly 4 basis points at 2.921 percent after touching 2.902 percent, the lowest in two months.
Commodities Recap
Oil prices rose more than 1 percent on Thursday on news that key crude exporters, including Saudi Arabia and Russia, were cutting production to reduce a global crude glut, and on forecasts of record demand in China.
U.S. crude futures settled up 76 cents to $53.01 a barrel, a gain of 1.5 percent. Brent crude oil settled up 91 cents, or 1.7 percent, at $56.01, off the session high of $56.43 a barrel.
Gold surged above $1,200 an ounce to its highest in seven weeks on Thursday as the dollar fell after U.S. President-elect Donald Trump's long-awaited news conference gave few details on economic policy.
Spot gold was up 0.5 percent at $1,197.64 an ounce by 2:35 p.m. EST (1935 GMT), after touching $1,206.98, its loftiest since Nov. 23. U.S. gold futures settled up 0.3 percent at $1,199.80 per ounce.
