Market Roundup
- U.S. jobless claims fall to near 42-year low at 263k v 274k-forecast.
- FOMC Minutes: Most participants at Sep meeting felt conditions for hiking had already been met or would be met by end of the year.
- FOMC Minutes: Many participants saw global conditions as increasing downside risk to US.
- FOMC Minutes: Some participants warned a premature rate hike could hurt the Fed's credibility if inflation stayed low.
- FOMC Minutes: Several participants worried inflation could be dragged even lower by oil prices and the strong USD, a couple expressed unease that inflation expectations may be dropping.
- BOE votes 8-1 (McCafferty) to keep rates steady (as f/c), sees soft outlook for inflation.
- BOE: past appreciation of GBP likely to weigh on CPI, domestic cost pressures need to be stronger.
- BOE's Carney: on 5 rate hike cycles since inflation targeting, BOE sometimes preceded Fed.
- ECB Minutes: GC discussed increased uncertainty in EM economies, particularly China.
- ECB's Praet: EZ econ environment characterized by "seeping pessimism" about LT growth.
- Bundesbank's Weidmann: more expansive policy does not spur growth (Die Welt).
- BOJ's Kuroda: it is true EM slowdown is affecting Japan's econ, Japan to continue moderate recovery.
- IMF's Lagarde: US recovery broadly on track; an increase in interest rates is approaching.
- IMF's Lagarde: Not expecting CCY wars; in not too distant future Latin America countries should see benefit from depreciation.
- Moody's: China's sovereign rating can withstand slower growth.
Looking Ahead - Economic Data (GMT)
- 21:45 New Zealand Election Card Retail Sales month Sep 0.5%-previous
- 21:45 New Zealand Election Card Retail Sales YY* Sep 4.2%-previous
- 00:30 Australia Housing Finance* Aug forecast- 5%, 0.3%-previous
- 0:030 Australia Invest Housing Finance*Aug 0.5%-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1234 levels and currently trading at 1.1273 levels. The pair has made session high at 1.1327 and hit lows at 1.1263 levels. The dollar touched lowest level against the euro in over two weeks but quickly pared its losses after minutes released on Thursday from the Federal Reserve's September meeting reinforced the view that the central bank would not hike US rates until next year. In mid-morning trading, the euro was up 0.4 percent at $1.1274 after hitting a one-week high of $1.1315. The data released on Thursday provided an upbeat check on the health of the labor market after last week's monthly employment report increased doubts the Federal Reserve would raise interest rates by the end of this year. The Labor Department said, Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 263,000 for the week ended Oct. 3.Looking ahead The U.S. Labor Department will issue import and export prices for September. Import prices are expected to have fallen by 0.5 percent and export prices by 0.2 percent last month. (0830/1230) Meanwhile, the Commerce Department will release data on wholesale inventories in August, which are expected to have been steady. To the upside, immediate resistance can be seen at 1.1288. To the downside, immediate support level is located at 1.1234 levels.
GBP/USD is supported in the range of 1.5280 levels and currently trading at 1.5349 levels. It reached session high at 1.5370 and dropped to session low at 1.5260 levels. Sterling retreated from a two-week high against the dollar after minutes on Thursday from a meeting of the Bank of England's rate-setting committee suggested policymakers were in no hurry to raise interest rates. The nine-member Monetary Policy Committee voted 8-1 to keep rates at a record-low 0.5 percent month, as expected, and most saw a relatively soft outlook for inflation. That dashed expectations amongst some investors who hoped the BoE would send a message it was not comfortable with their pricing on when rates would start to rise. Investors are currently factoring in the chance of the first rate hike in the last quarter of 2016. Sterling fell to $1.5270, down 0.3 percent on the day having traded at $1.5345 beforehand and down from a two-week high of $1.5373 hit earlier in the day. Sterling has been underpinned for most of this year by expectations the BoE was likely to follow the Federal Reserve in raising rates, but that view has been challenged given a global slowdown. To the downside, immediate support level is located at 1.5260 levels. To the upside, immediate resistance can be seen at 1.5370.
USD/JPY is supported around 119.60 levels and currently trading at 119.92 levels. It peaked to hit session high at 120.02 and made session lows at 119.67 levels. The dollar slipped to one-week lows against yen on Thursday after the release of minutes of last month's U.S. Federal Reserve meeting, which threw light on the central bank's somber outlook on growth and interest rates. The minutes from the U.S. Federal Reserve's Sept. 16-17 meeting, released on Thursday, showed the Fed's policymaking committee was unsettled by signs of turmoil abroad but did not think this had "materially altered" the outlook for the U.S. economy. Against the yen, the dollar was down 0.1 percent at 119.85 yen. it hit a one-week trough of 119.67 yen.The yen, traditionally a safe haven for investors in times of economic stress, has benefited from the volatile mood on stock markets since August amid broader concerns over the pace of global growth. Meanwhile, Bank of Japan Governor Haruhiko Kuroda said on Thursday the slowdown in emerging economies was already hurting Japan's exports, though he stressed that there was no change to his view the economy was set to continue a moderate recovery. To the upside, immediate resistance can be seen at 120.10. To the downside, immediate support level is located at 119.68 levels.
USD/CAD is supported at 1.2964 levels and is trading at 1.3012 levels. It has made session high at 1.3073 and lows at 1.2975 levels. The Canadian dollar squeezed out a tiny gain against its U.S. counterpart on Thursday after the release of The minutes from the Sept. 16-17 meeting released on Thursday showed the Fed's policymaking committee was unsettled by signs of turmoil abroad but didn't think this had materially altered the outlook for the economy. On the data front, Canadian housing starts surged unexpectedly in September while new home prices also beat forecasts in August, prolonging a housing boom in the country despite signs of weakness in other parts of the economy. Groundbreaking on new homes jumped to a seasonally adjusted annual rate of 230,701 in September from a downwardly revised 214,255 in August, a report by the Canada Mortgage and Housing Corp showed. The currency traded within a very narrow range, with the strongest level of the session touching C$1.3022 and the weakest at C$1.2975. Canadian employment data for September is due on Friday at 8:30 a.m. EDT. To the upside, immediate resistance can be seen at 1.3075. To the downside, immediate support level is located at 1.2992 levels.
Equities Recap
European shares closed higher on Thursday as auto stocks gained, but investors remained wary about the global economic outlook and the upcoming earnings season.
UK's benchmark FTSE 100 closed up by 0.67 percent, the pan-European FTSEurofirst 300 ended the day up by 0.28 percent, Germany's Dax ended up by 0.3 percent, France's CAC finished the day up by 0.29 percent.
U.S. stocks gained ground on Thursday after the Federal Reserve released minutes from its September meeting at which the U.S. central bank decided against raising interest rates for now.
Dow Jones closed up by 0.83 percent, S&P 500 ended up by 0.88percent, Nasdaq finished the day up 0.41 percent.
Treasuries Recap
U.S. Treasuries prices fell on Thursday as the minutes from the Federal Reserve's September policy meeting strengthened the view that the central bank would not raise interest rates this year, spurring investors to pile into stocks from bonds.
The benchmark 10-year Treasuries were down 12/32 in price to yield 2.100 percent, up 4 basis points from late on 30-year bond was down 1-1/2 points in price to yield 2.940 percent, up 5.5 basis points on the day.
Commodities Recap
Oil prices climbed to their highest in three months on Thursday after a closely watched oil forecaster predicted prices would climb to $75 over the next two years, adding to early gains notched after a rally in Chinese stocks worries about Syria.
Brent crude oil futures closed up $1.72 at $53.05 a barrel, while U.S. crude futures closed up $1.62 at $49.43 a barrel.
Gold turned lower on Thursday in a dramatic turnaround after Federal Reserve meeting minutes showed policymakers at the U.S. central bank were unsettled by signs of a global economic slowdown but that their outlook was not materially altered.
Spot gold eased 0.4 percent to $1,139.86 an ounce at 3:16 p.m. EDT (1916 GMT), having rallied 0.5 percent to $1,151.20 after the September minutes were released. U.S. gold futures for December delivery settled before the minutes were released, down 0.4 percent at $1,144.30 an ounce.
