Market Roundup
- UK retail sales growth weakest since April 2018 before Black Friday
- Asian shares retreat from highs, markets take Trump impeachment in stride
- Dollar unhurt by Trump impeachment; Swedish crown gains
- Oil hovers near three-month highs on trade progress, lower inventories
- Gold inches up as Trump impeachment stokes political uncertainty
- China says in touch with U.S. on signing of Phase 1 trade deal
- BOJ's Kuroda warns of risks to Japan economy despite trade war truce
Economic Data Ahead
- (0700 ET/1200 GMT) BoE Interest Rate Decision (Forecast 0.75%, Prior 0.75%)
- (0830 ET/1330 GMT) U.S Continuing Jobless Claims (Dec 6) (Forecast 1.681M, Prior 1.667M)
- (0830 ET/1330 GMT) U.S Initial Jobless Claims (Dec 13) (Forecast 225K, Prior 252K)
- (0830 ET/1330 GMT) U.S. Philadelphia Fed Manufacturing Survey (Dec) (Forecast 8, Prior 10.4)
- (0830 ET/1330 GMT) Canada ADP Employment Change (Nov) (Forecast 66.6K, Prior -22.6K)
- (1000 ET/1500 GMT) U.S. Existing Home Sales (MoM) (Nov) (Forecast 5.44M, Prior 5.46M)
Key Events Ahead
- (1030 ET/1530 GMT) ECB's Lane speech
FX Beat
DXY: The US Dollar Index, which tracks the greenback's value against a basket of six major currencies pauses two-day winning streak. DXY was down 0.11 percent at around 11:30 GMT. Technical indicators suggest more weakness.
EUR/USD: EUR/USD maintained its bid tone through the European session on Thursday and was trading at 1.1129 at 11:30 GMT, up 0.14 percent at the time of writing. Upside was supported by a subdued US dollar demand after the US House of Representatives on Wednesday voted to impeach President Trump. 200-DMA offers stiff resistance at 1.1149. Decisive break above required for upside continuation.
USD/CAD: USDCAD hits 7-week low on increase in Canada core inflation and surging oil price. The pair has found support above the 1.31 handle and is currently consolidating recent losses to multi-week lows. Focus now on U.S. second-tier data for a fresh impetus. Break below 1.31 support will drag the pair down to 1.3040/1.3020. Major bearish continuation only beneath 1.3020. Minor resistance in the near-term lies around 1.31800. Any break above targets 1.3230/1.3270/1.3320. Trend reversal only above 1.3385.
GBP/USD: Cable erases early gains after UK Retail Sales unexpectedly drop 0.6 percent MoM in November. GBP/USD was trading at 1.3082 at 11:45 GMT, down from session highs at 1.3127. The major finds strong support at 20-DMA at 1.3063. Break below will see further weakness. Downside likely to be limited amid weak US Dollar. Break below 20-DMA could see test of 55-EMA support at 1.2896.
USD/JPY: The Greenback declines across the board as US House impeaches President Trump. USD/JPY was trading largely muted at 109.51 at 11:45 GMT. The pair is extending sideways grind from the past few sessions. Price action is above 200-DMA and major trend has shifted to bullish as evidenced by the GMMA indicator. 5-DMA is immediate support at 109.47. Resumption of upside could see fresh multi-week highs. Focus on U.S. second-tier data due later in the day for fresh impetus.
Equities Recap
European stocks muted on Thursday's trade. At around 11:30 GMT, The Stoxx Europe 600 was down 0.09% at 414.52. The German DAX declined 0.34% to 13,176.66.
The French CAC 40 slipped 0.03% to 5,957.88 and the U.K. FTSE 100 was up 0.24% at 7,558.95.
Commodities Recap
Gold confined to narrow trading band. Spot Gold was trading at 1474 at 11:50 GMT. Focus on U.S. second-tier data due later in the day for fresh impetus.
WTI grinds higher for the 6th straight session. WTI was up 0.09% on the day at 60.91 at 11:50 GMT, while Brent was up 0.17% at 66.24.
Treasuries Recap
U.S.: The U.S. Treasuries lost ground during Thursday’s afternoon session ahead of the country’s weekly initial jobless claims, scheduled to be released today by 13:30GMT, besides, a host of other 3-tier economic data, also due later in the day, for further direction into the bond market. The yield on the benchmark 10-year Treasury yield rose 1-1/2 basis points to 1.940 percent, the super-long 30-year bond yield jumped 2 basis points to 2.371 percent and the yield on the short-term 2-year edged tad 1 basis point higher to 1.645 percent.
UK: The United Kingdom’s gilts suffered during European trading hours Thursday even as investors faced disappointment in the country’s retail sales for the month of November, released today, while still eyeing the Bank of England’s (BoE) monetary policy meeting, scheduled to be held today by 12:00GMT for further direction in the debt market. The yield on the benchmark 10-year gilts, jumped 3 basis points to 0.806 percent, the 30-year yield also surged nearly 3 basis points to 1.304 percent and the yield on the short-term 2-year gained 1-1/2 basis points to 0.544 percent.
EUR: The German bunds remained mixed during European session Thursday amid a silent trading day that witnessed data of little economic significance ahead of the country’s GfK consumer climate index for the month of January, scheduled to be released on December 20 by 07:00GMT. The German 10-year bond yield, which move inversely to its price, jumped 3 basis points to 0.221 percent, the yield on 30-year note also surged nearly 3 basis points to 0.302 percent while the yield on short-term 2-year slipped 1 basis point to -0.633 percent.
AUS: The Australian bonds plunged during Asian session Thursday tracking a similar movement in the United States Treasuries as trade deal optimism flooded investor sentiments amid rather buoyant economic data that indicated some stabilization in the ongoing economic slowdown. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 7 basis points to 1.272 percent, the yield on the long-term 30-year bond also surged 7 basis points to 1.879 percent and the yield on short-term 2-year gained nearly 6 basis points to 0.841 percent.
