Market Roundup
- Australia June Employment, 50.9k, 17k forecast; 12k previous.
- Australia June Unemployment Rate, 5.4%, 5.4% forecast; 5.4% last.
- White House struggles to contain political outcry over Trump-Putin summit.
- Fed walks careful line on trade, but downside risks emerging.
- Japan exports to U.S. fall, business mood sours amid fears of trade war.
- BOJ trims purchases of long-term JGBs at regular buying operation.
- "Brexit continues to mean Brexit": May presses on with her plan.
Economic Data Ahead
- (0430 ET/0830 GMT) UK June Retail Sales YY, 3.7% f'cast, 3.9% last.
- (0430 ET/0830 GMT) UK June Retail Sales Ex-Fuel MM, -0.3% forecast, 1.3% last.
Key Events Ahead
- (0430 ET/0830 GMT) Nausicaa Delfas, execcutive director of international at FCA speaks on Brexit in London.
- (0900 ET/1300 GMT) Federal Reserve Vice Chairman for Supervision Randal Quarles speaks in New York City.
FX Recap
USD: The dollar index versus a basket of six major currencies was little changed at 95.021 after hitting a three-week high of 95.407 overnight.
EUR/USD: The euro was a shade firmer at $1.1650 after dipping about 0.2 percent on Wednesday, during which it brushed a 16-day low of $1.1602. A consistent close below $1.1539 will drag the parity down towards key supports around $1.1390 and $1.1185 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1724, $1.1852, $1.1938 and $1.1996 marks respectively.
USD/JPY: The Japanese yen trades marginally higher in early Asia after Japan’s trade balance data. It made intraday high at 112.88 and low at 112.65 levels. A sustained close above 112.83 is required to take the parity higher towards key resistance around 114.72 marks. Alternatively, a daily close below 112.83 will drag the parity down towards key supports around 112.27, 109.24, 108.72, 107.90, 106.71 and 105.32 marks respectively.
GBP/USD: The sterling tumbled to 10-month lows against the dollar on Wednesday after data showed British inflation failed to rise as expected and Brexit-linked political turmoil pummelled the currency towards the $1.30 mark. Annual consumer price inflation held steady in June at 2.4 percent - the bottom end of forecasts in a poll of economists who had expected to see the first increase this year, to 2.6 percent. Market expectations for a 25 basis point August interest rate rise by the Bank of England fell back to 72 percent from close to 80 percent earlier this week. Against the euro the pound dropped 0.4 percent to 89.32 pence. A sustained close below $1.3068 requires for dragging the parity down towards key support around $1.2779 mark. On the other side, key resistances are seen at $1.3362 and $1.3490 levels respectively.
AUD/USD: The Australian dollar rose on Thursday after a solid labour market report but the uptick was contained as the sharp jump in jobs was still not enough to push the unemployment rate lower. The Australian dollar advanced more than 0.5 percent to as high as $0.7444 after official data showed 50,900 net new jobs were added in June, blowing past expectations of 17,000. It was the largest monthly gain since November. The Aussie has come back a bit to last trade around $0.7428.
NZD/USD: The kiwi hit a near two-year low of $0.6688 earlier this month amid worries about escalating global trade tensions. Pair made intraday high at $0.6805 and low at $0.6764 levels. A sustained close above $0.6837 is required to take the parity higher towards $0.7050 mark. Alternatively current downside movement will take the parity down towards key supports around $0.6687 levels.
Equities Recap
Japan’s Nikkei was trading 0.09 pct lower at 22,774.77 points.
Australia’s S&P/ASX 200 was trading 0.45 pct higher at 6,273.22 points.
Shanghai composite index to open up 0.1 pct at 2,791.02 points and China's CSI300 index to open up 0.4 pct at 3,444.80 points.
Hong Kong’s Hang seng was trading 0.22 pct lower at 28,036.55 points.
Taiwan’s TWII was trading 0.03 pct higher 10,845.22 points.
India’s NSE Nifty was trading around 0.07 percent lower at 10,974.80 points while BSE Sensex was trading 0.15 points higher at 36,428.88 points.
South Korea’s Kospi was trading 0.15 percent lower at 2,286.55 points.
Commodities Recap
Oil prices were mixed on Thursday as the market struggled to digest signs of strong gasoline demand in the United States, the world's biggest consumer of the fuel, with a statement from oil producers that they are putting more crude on the market. Brent crude futures fell 11 cents, or 0.2 percent, to $72.79 a barrel at 0401 GMT. West Texas Intermediate (WTI) crude futures climbed 6 cents, or 0.1 percent, to $68.82.
Gold prices eased on Thursday, nearing a one-year low hit in the previous session, as the U.S. dollar firmed on the potential for further U.S. interest rate hikes. Spot gold was down 0.1 percent at $1,224.76 an ounce at 0359 GMT. The yellow metal slipped to its lowest since mid-July 2017 on Wednesday at $1,220.81 an ounce. U.S. gold futures for August delivery were 0.3 percent lower at $1,224.70 an ounce.
Treasuries Recap
New Zealand government bonds gained, sending yields 0.5 basis point lower at the long end of the curve.
Australian government bond futures eased, with the three-year bond contract off 4 ticks at 97.86. The 10-year contract slipped 2.5 ticks to 97.3350.
The rise in U.S. Treasury yields, notably those in the short end, amid the possibility of further rate increases helped support the dollar. The two-year Treasury yield stood near 2.624 percent, its highest since August 2008 scaled on Wednesday.
