Market Roundup
• US jobless claims rise 259k v forecast 247k, 237k previous, cont’d claims 2.1m v 2.059m previous.
• US Dec Adv goods trade balance unchanged at -65b, wholesale inventories steady at 1%.
• Atlanta Fed’s GDPNow: raises US fourth-quarter GDP estimate to 2.9% from 2.8% on Jan 18.
• ECB’s Villeroy: Fears about resurgence of EZ inflation exaggerated, pushes back against calls for QE exit.
• German consumer morale brightens, highest reading for five months.
• EU's Dijsselbloem: No clarifications needed on Italy's banking rescue.
• Mexico president cancels Trump summit as wall taunt deepens spat, USD/MXN rallies.
• Markit Svcs PMI flash 55.1 v 54.4 forecast, 53.9 previous., Comp PMI 55.4 v 54.1 previous.
• US new home sales -10.4% v -1% forecast, +4.7% previous.
• EZ yields hit 1-yr high on expectations of US growth policies, France's 10-yr yield at 1%, 1st time since Dec ’15.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan CPI, Core Nationwide YY Dec forecast -0.3%, -0.4%-previous
• 23:30 Japan CPI, Overall Nationwide* Dec 0.5%- previous
• 23:30 Japan CPI Core Tokyo YY* Jan forecas-0.4%, -0.6%- previous
• 23:30 Japan CPI, Overall Tokyo* Jan 0%- previous
• 23:30 Japan CPI Index* Dec 100.4- previous
• 00:30 Australia PPI QQ* Q4 0.3%- previous
• 00:30 Australia PPI YY* Q4 0.5%- previous
• 00:30 Australia Export Prices* Q4 forecas11%, 3.5%- previous
• 00:30 Australia Import Prices* Q4 forecas-0.5%, -1%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0623 levels and currently trading at 1.0666 levels. The pair has made session high at 1.0704 and hit lows at 1.0656 levels. Euro declined against the dollar on Thursday as dollar rebounded from a seven-week low as investor demand for greenback improved with higher global bond yields and stable stock markets. Equities and Treasury yields have continued to rise in the past week, fueled by U.S. President Donald Trump's signals of new public spending, the effect on the dollar over the last two weeks has been mixed. Investors were concerned about other parts of Trump's policy mix such as his leanings toward a protectionist trade policy. Still, investors believed the dollar could make up some lost ground the next few weeks, with the Federal Reserve holding its first policy meeting this year on Feb. 1. On the data front, New U.S. single-family home sales fell to a 10-month low in December after three straight months of solid gains, but the housing market recovery remains intact as a tightening labor market boosts wage growth. The euro fell 0.4 percent versus the greenback to $1.0681.
GBP/USD is supported in the range of 1.2553 levels and currently trading at 1.2580 levels. It reached session high at 1.2614 and dropped to session low at 1.2558 levels. Sterling dipped slightly against the dollar on Thursday as dollar rebounded after its worst run since August as investors refocused on the chances of higher U.S. inflation and growth. On the data front, Gross domestic product rose at a quarterly pace of 0.6 percent between October and December, keeping up the same above-average pace seen in the initial three months after the referendum decision to leave the European Union. Gross domestic product rose at a quarterly pace of 0.6 percent between October and December, keeping up the same above-average pace seen in the initial three months after the referendum decision to leave the European Union. Among G10 currencies, sterling has been the biggest gainer the past two weeks, up almost 6 percent from lows hit on Jan. 16. On Thursday though, sterling was down 0.3 percent at $1.2580, despite a solid reading of Britain's fourth-quarter growth.
USD/CAD is supported at 1.3049 levels and is trading at 1.3117 levels. It has made session high at 1.3126 and lows at 1.3078 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as the greenback recovered some lost ground against the basket of major currencies. The loonie had rallied this week as investor fears of a more unfavorable trade outlook for Canada abated and after U.S. President Donald Trump signed orders on Tuesday smoothing the path for the Keystone XL oil pipeline. If constructed, Keystone would provide oil producers in Canada with a quicker route to send crude to U.S. Gulf Coast refiners. Losses for the Canadian dollar came even as prices of oil, one of Canada's major exports, rose. U.S. crude prices were up 1.25 percent at $53.41 a barrel. The Canadian dollar was trading at C$1.3102 to the greenback, or 76.32 U.S. cents, weaker than Wednesday's close of C$1.3067, or 76.53 U.S.
USD/JPY is supported around 113.55 levels and currently trading at 114.61 levels. It peaked to hit session high at 114.93 and made session lows at 114.10 levels. The U.S. dollar strengthened against the yen on Wednesday as investors refocused on the chances of higher U.S. inflation and growth. On Tuesday and Wednesday, investors reduced their holdings of greenback in the wake of Trump's actions on domestic business investments, which they view as promoting heftier company profits, and his rhetoric on trade and immigration, which they calculate may push up inflation. Investors will receive fresh clues on the economy and whether it shows enough strength for the Fed to consider further rate increases. Fed policy-makers, who will meet next Tuesday and Wednesday, are expected to leave rates unchanged after raising them in December. Investors will focus on the government's first reading on gross domestic product in the final quarter of 2016. Economists polled forecast GDP likely slowed to 2.2 percent growth pace in the fourth quarter from 3.5 percent in third quarter. The dollar gained 0.9 percent against the yen to 114.35 yen, while the euro fell 0.4 percent versus the greenback to $1.0700.
Equities Recap
European shares held around one-year highs on Thursday, supported by mergers and acquisitions-related optimism, with Johnson & Johnson's $30 billion deal to buy Actelion ATLN.S lifting shares in the Swiss biotech firm.
UK's benchmark FTSE 100 closed down by 0.15 percent, the pan-European FTSEurofirst 300 ended the day up by 1.37 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 1.17 percent.
U.S. stocks were little changed on Thursday in the wake of a two-day rally that pushed the Dow Jones Industrial Average above the 20,000 mark, as investors grappled with the latest round of earnings.
Dow Jones closed up by 0. 6 percent, S&P 500 ended down 0.08 percent, Nasdaq finished the day up by 1.58 percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday with benchmark yields retreating from a four-week high, after strong investor demand at a $28 billion auction of seven-year notes, part of this week's $88 billion coupon-bearing government debt supply.
The yield on benchmark 10-year Treasury notes was down over 1 basis point at 2.508 percent after hitting 2.555 percent earlier, which was its highest since Dec. 28
Commodities Recap
Gold fell to a two-week low on Thursday as the dollar firmed and equity markets rallied, but expectations that the greenback's climb may be coming to an end helped limit losses.
Spot gold prices were down 1 percent at $1,187.93 an ounce by 3:02 p.m. EST (2002 GMT), after tapping $1,184.03, its lowest since Jan. 11. U.S. gold futures settled down 0.7 percent at $1,189.80.
Oil prices jumped 2 percent on Thursday, boosted by the ongoing rally in the U.S. stock market, although gains in crude futures were capped by heavy inventories in spite of efforts by producers to cut output.
U.S. light crude futures were up $1.03 to $53.78 a barrel, a gain of 2 percent, while Brent crude settled up $1.16, or 2.1 percent, to $56.24.
