Market Roundup
•ECB hikes rates by 75 basis points
•Fed's Powell says Fed needs to keep it going to get job done
•US weekly jobless claims fall to 3-month low
• U.S. crude stocks jump by nearly 9 million barrels -EIA
• Dow up 0.61%, S&P 500 up 0.66%, Nasdaq up 0.60%
• US Jobless Claims 4-Week Avg 233.00K,241.50K previous
•US Initial Jobless Claims 222K, 240K forecast, 232K previous
• US Continuing Jobless Claims 1,473K, 1,435K forecast, 1,438K previous
• US Crude Oil Inventories 8.844M,-0.250M forecast, -3.326M previous
• US Crude Oil Imports 1.357M forecast, -0.005M previous
• US Jul Consumer Credit 23.81B, 33.00B forecast, 40.15B previous
• US 4-Week Bill Auction 2.470% previous
Looking Ahead – Economic data (GMT)
•01:30 China Aug CPI (YoY) 2.8% forecast, 2.7% previous
•01:30 China Aug PPI (YoY) 3.1% forecast, 4.2% previous
•01:30 China Aug CPI (MoM) 0.2% forecast, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro strengthened on Thursday after the European Central Bank delivered an unprecedented 75 basis points interest rate hike. The ECB said on Thursday it would start paying interest on government deposits in a bid to keep that cash from flooding an already replete market facing a squeeze in bonds.That followed a decision by the central bank to hike its deposit rate to 0.75% from zero. The ECB also signalled further hikes, prioritising the fight against inflation even as the bloc's economy is heading for a likely winter recession. The euro initally dipped after rate hike decision but recovered most the ground and was last trading up at 1.0047 .Immediate resistance can be seen at 1.0022(20DMA), an upside break can trigger rise towards 1.0064(23.6%fib).On the downside, immediate support is seen at 0.9990(38.2%fib), a break below could take the pair towards 0.9924(50%fib).
GBP/USD: Sterling recovered from initial fall against dollar on Thursday after new Prime Minister Liz Truss announced a plan to tackle high energy costs without imposing windfall tax on oil and gas profits. Britain's new government is freezing consumer energy bills for two years and providing support to businesses from crippling energy costs, Truss unveiled in a package that could cost about 150 billion pounds ($173 billion). With Britain facing a lengthy recession sparked by a near quadrupling of household energy bills, Truss set out what she described as bold and immediate action to protect consumers and businesses just three days after she took office. Immediate resistance can be seen at 1.1567(38.2%fib), an upside break can trigger rise towards 1.1667(23.6%fib).On the downside, immediate support is seen at 1.1477(50%fib),a break below could take the pair towards 1.1328(61.8%fib).
USD/CAD : The Canadian dollar strengthened to its highest level in nearly one week against its U.S. counterpart on Thursday as oil prices rose and a senior Bank of Canada official left the door open to another oversized interest rate increase. The BoC continues to see front-loading of rate hikes as the best way to battle the hottest inflation in nearly four decades, said Senior Deputy Governor Carolyn Rogers, one day after the central bank raised its benchmark interest rate to a 14-year high of 3.25%. The price of oil , one of Canada's major exports, settled nearly 2% higher at $83.54 a barrel, while the Canadian dollar was up 0.5% at 1.3185 to the greenback . Immediate resistance can be seen at 1.3121 (23.6%fib), an upside break can trigger rise towards 1.3147 (Daily high).On the downside, immediate support is seen at 1.3053(50%fib), a break below could take the pair towards 1.3027 (20DMA).
USD/JPY: The dollar steadied against the yen on Thursday after Federal Reserve Chair Jerome Powell reiterated that the U.S. central bank will continue to raise interest rates in order to tame surging inflation and warned against prematurely loosening monetary policy. For the last several months, dollar-yen has been the currency pair most sensitive to U.S. rate expectations. The yen has been a particular victim of recent dollar strength, as the Bank of Japan remains the lone dovish central bank. The dollar rose 0.1% to 143.96 yen . On Tuesday, it surged to a 24-year peak of 144.99 yen.The dollar index was flat at 109.63, after soaring to its strongest level since June 2002 the day before. Strong resistance can be seen at 144.18(23.6%fib), an upside break can trigger rise towards 144.81(Higher BB).On the downside, immediate support is seen at 143.21(38.2%fib), a break below could take the pair towards 142.24(5DMA).
Equities Recap
European stocks closed higher on Thursday, with investors digesting the European Central Bank's interest rate decision and hawkish remarks by the Federal Reserve Chair Jerome Powell.
UK's benchmark FTSE 100 closed up by 0.33 percent, Germany's Dax ended down by 0.09percent, France’s CAC finished the day up by 0.33 percent.
Wall Street's main indexes posted gains on Thursday mainly lifted by financial institutions and healthcare companies, as investors digested hawkish remarks from policymakers that cemented bets of a large interest rate hike later this month.
Dow Jones closed up by 0.61 percent, S&P 500 closed up by 0.66 percent, Nasdaq settled up by 0.60 percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday after Federal Reserve Chairman Jerome Powell reiterated that the U.S. central bank’s priority is to tackle inflation, before highly anticipated consumer price data is due next week.
Benchmark 10-year note yields rose three basis points to 3.292%.Two-year yields increased four basis points to 3.491%, below the 3.551% level hit last Thursday, which was the highest since November 2007.
Commodities Recap
Gold prices slipped on Thursday as the dollar and U.S. Treasury yields climbed after comments from Federal Reserve Chair Jerome Powell cemented expectation around a 75-basis-point rate hike at its upcoming policy meeting.
Spot gold was down 0.4% at $1,711.10 per ounce by 10:02 a.m. EST (1402 GMT), after hitting a more than one-week high earlier in the session.U.S. gold futures fell 0.4% to $1,721.40.
Crude prices edged up about 1% on Thursday after dropping to a seven-month low in the prior session as some technical traders bought the dip and Russia threatened to halt oil and gas exports to some buyers.
Brent futures rose $1.15, or 1.3%, to settle at $89.15 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.60, or 2.0%, to settle at $83.54.
