Market Roundup
• US Mar International Trade $, -49 bln, -50 bln forecast, -57.6 bln previous.
• US Mar Goods Trade Balance (R), -68.29 bln, -68.04 bln.
• US w/e Initial Jobless Claims, 211k, 225k forecast, 209k previous.
• US w/e Jobless Claims 4-wk Avg, 221.50k, 229.25k previous.
• US w/e Continued Jobless Claims, 1.756 mln, 1.838 mln forecast, 1.837 mln previous.
• US Apr Markit Comp Final PMI, 54.9, 54.8 previous.
• US Apr Markit Svcs PMI Final, 54.6, 54.4 previous.
• US Mar Factory Orders MM, 1.6%, 1.4% forecast, 1.2% previous.
• US Apr ISM N-Mfg PMI, 56.8, 58.1 forecast, 58.8 previous.
• US Apr ISM N-Mfg Employment Index, 53.6, 56.6 previous.
• US Apr ISM N-Mfg New Orders Idx, 60, 59.5 previous.
• US Apr Challenger Layoffs, 36.081k, 60.357k previous.
• US Q1 Labor Costs Prelim, 2.7%, 2.9% forecast, 2.5% previous.
• US Q1 Productivity Prelim, 0.7%, 0.9% forecast, 0.0% previous.
• CA Mar Trade Balance C$, -4.14 bln, -2.24 bln forecast, -2.69 bln previous.
• CA Mar Exports C$, 47.58 bln, 45.94 bln previous.
• CA Mar Imports C$, 51.72 bln, 48.63 bln previous.
• Trump praises China's Xi as trade talks begin in Beijing.
• Trump says campaign funds were not used to pay adult-film star.
• Iran says will not renegotiate nuclear deal, warns against changes.
• Americans' release in N. Korea seen imminent; Kim meets Chinese.
• Argentina peso crashes 7.8 pct despite second shock rate hike.
Looking Ahead - Economic Data (GMT)
• No major economic events scheduled
Looking Ahead - Events, Other Releases (GMT)
• 07:00 Norway Central Bank chief Oystein Olsen and Director Yngve Slyngstad participate in the Parliamentary Hearing in Oslo
• 07:45 Keynote speech by ECB Vice President Vitor Constancio in Valletta, Malta
• 08:30 Riksbank will hold a press conference in Stockholm
• 00:00 Fed Atlanta President Raphael Bostic, Fed Kansas City President Esther George and Fed Bank of Dallas President Robert Kaplan participate in a conference in California, USA
• 19:00 Federal Reserve Bank of San Francisco President John Williams speaks in California, USA
• 21:30 Federal Reserve Vice Chair for Supervision Randal Quarles makes presentation in California, USA
Currency Summaries
EUR/USD is likely to find support at 1.1935 levels and currently trading at 1.1987 levels. The pair has made session high at 1.2003 and hit lows at 1.1945 levels. The euro edged higher against dollar on Thursday as dollar eased as investors took profits from recent dollar rally that sent the greenback to its highest levels of the year and awaited Friday’s payrolls data for April. The dollar has erased all its 2018 losses in the past two weeks on expectations the Federal Reserve will continue to raise interest rates while other central banks, including the European Central Bank, take longer to reduce stimulus. Further dollar gains will likely depend on data showing additional improvement in growth and inflation, which could compel the U.S. central bank to raise rates this year an additional three times. On the data front, new orders for U.S.-made goods rose more than expected in March, boosted by strong demand for transportation equipment and a range of other products, but there are signs that business spending on equipment is slowing, data showed on Thursday. The U.S. trade deficit, meanwhile, narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans, bolstering the economy's outlook heading into the second quarter. Friday’s employment report for April will be evaluated for further indications of the strength of the U.S. labor market and inflation pressures.
GBP/USD is supported in the range of 1.3507 levels and currently trading at 1.3574 levels. It reached session high at 1.3607 and dropped to session low at 1.3535 levels. Sterling pared gains against the dollar on Thursday after a survey showed Britain's services sector struggled to recover in April from a slowdown in March, further dimming expectations of an interest rate hike next week. Sterling reversed gains and turned 0.2 percent lower on the day at $1.3547 compared to $1.3630 earlier and moved further away from a post-Brexit referendum high of $1.4377 hit last month. It is now nearly 6 percent down from those levels. Britain's services sector struggled to recover in April from a sharp slowdown in March, according to a major survey which is likely to deal a final blow to any remaining expectations of a Bank of England interest rate rise next week. The IHS Markit/CIPS services purchasing managers' index (PMI) rose to 52.8 in April from March's 20-month low of 51.7, a smaller increase than economists had forecast in a poll and its second-lowest level since September 2016. Expectations of a rate hike from the Bank of England next week have dwindled to less than 10 percent from more than 90 percent a month ago, crushing hedge fund positions on sterling. Long sterling positions posted their second biggest weekly drop in eight months last week. But despite the fall in net long bets, overall positions remained within striking distance of a four-year high hit last week. Against the euro, sterling weakened 0.3 percent to 88.25 pence.
USD/CAD is supported at 1.2800 levels and is trading at 1.2851 levels. It has made session high at 1.2907 and lows at 1.2813 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday, though paring some of its gains after domestic data showed the March trade deficit had widened to a record. Canada's trade deficit in March widened to a record C$4.14 billion ($3.21 billion) as imports increased faster than exports, Statistics Canada said on Thursday. Imports expanded in part due to motor vehicles and consumer goods, while the growth in exports was led by aircraft and other transportation equipment, food, and energy products. Economists said the data was not all bad news for the economy, as exports rose and a surge in imports pointed to strength in domestic demand. Chances of an interest rate hike by July were little changed after the data at about 75 percent, the overnight index swaps market indicated. The greenback was little changed, but seeped into negative territory in a choppy trading session as investors took profits. Oil prices rose , boosted by OPEC production cuts and the potential for new U.S. sanctions against Iran, but gains were limited by growing U.S. crude inventories. The Canadian dollar was last trading 0.2 percent higher at C$1.2851 to the greenback. The currency traded in a range of C$1.2818 to C$1.2886.
AUD/USD is supported around 0.7482 levels and currently trading at 0.7528 levels. It hit session high at 0.7540 and made session lows at 0.7496 levels. The Australian dollar recovered from one-year lows on Thursday helped by solid economic data and weaker dollar after three straight sessions of declines. The Australian dollar was last up 0.4 percent at $0.7530. It went as deep as $0.7473 earlier this week to hit the lowest since mid-2017.The Aussie is set for a third straight weekly decline after heavy losses earlier in the week. Data from the Australian Bureau of Statistics (ABS) showed a better-than-expected jump in the country's trade surplus for March while that of February was revised higher. Since the start of 2017, Australia has suffered a monthly trade deficit only twice. Separate data showed approvals to build homes jumped 2.6 percent in March compared with forecasts of a 1 percent increase. While the series is volatile month to month, approvals to build houses have surged more than 10 percent from a year ago. The Reserve Bank of Australia (RBA) held cash rates at a record low 1.50 percent for a 21st straight meeting and signalled the need for policy to remain stable for a while. But it hopes a stronger pick-up in economic activity could revive wages growth and inflation, which could put an end to the longest spell of inaction by the central bank.
Equities Recap
European bourses closed in negative territory on Thursday at the end of a session laden with corporate earnings and as worries over global trade tensions weighed on Wall Street.
UK's benchmark FTSE 100 closed down 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.73 percent, Germany's Dax ended down by 0.9 percent, France’s CAC finished the day down by 0.6 percent.
U.S. stocks ended lower on Thursday after a choppy session as strong economic data offset disappointing earnings reports from several companies.
Dow Jones closed up by 0.01 percent, S&P 500 ended down by 0.24 percent, Nasdaq finished the day down by 0.19 percent.
Treasuries Recap
U.S. Treasury yields slid on Thursday, pressured by falls in Europe after a surprising drop in euro zone inflation that could constrain the European Central Bank's efforts to unwind its monetary stimulus this year.
U.S. benchmark 10-year yields fell to 2.947 percent from 2.964 percent late on Wednesday. U.S. 30-year bonds slid to 3.122 percent, from Wednesday's 3.134 percent. U.S. two-year yields were also down at 2.484 percent, from 2.496 percent on Wednesday.
Gold prices gained on Thursday, one day after the U.S. central bank reassured investors that increases to interest rates would be gradual and as the U.S. dollar softened, with geopolitical uncertainties also providing support.
Spot gold rose 0.6 percent at $1,312.54 per ounce by 1:33 p.m. EDT (1733 GMT), while U.S. gold futures for June delivery settled up $7.10, or 0.5 percent, at $1,312.70 per ounce.
Oil prices rose on Thursday, boosted by OPEC production cuts and the potential for new U.S. sanctions against Iran, but gains were limited by growing U.S. crude inventories.
Brent crude futures rose 26 cents to settle at $73.62 a barrel, a 0.35 percent gain. U.S. West Texas Intermediate (WTI) crude rose 50 cents to settle at $68.43 a barrel, a 0.74 percent increase..
