- United Kingdom September Bank Rate Stays Flat At 0.5 % (Forecast 0.50 %) Vs Previous 0.50 %.
- United Kingdom September QE Total GBP Stays Flat At 375.0 Bln GBP Vs Previous 375 Bln GBP.
- Sterling rises to day's high of $1.5448 after BOE minutes from around $1.5390.
- Big offers at 6.3900 drag market down from near 6.46 to below 6.40 on huge volumes.
- Yen dented by report of LDP lawmaker view on monetary policy.
- Yamamoto quoted saying Oct 30 'good opportunity' for BOJ easing.
- RBNZ cuts rates to 2.75%, sees some further easing as likely.
- NZD falls 2% after NZ cuts rates. NZD/USD down to 0.6256 from 0.6381 levels.
- UK house prices +0.9% y/y in 3 months to August.
- UK house prices +2.7% m/m in August.
- ECB Coeure- Data inefficiencies/inconsistencies caused by lack harmonization/standardization.
- Turkey Econ min- Foreign trade will continue to have positive impact on current account from August.
- (0800 ET/1200 GMT) New Zealand August PMI manufacturing; last 53.5.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 275k eyed; last 282k.
- (0830ET/1230 GMT) US August import/export prices, -1.6%, -0.2% m/m eyed; last -0.9%, -0.2%.
- (0830 ET/1230 GMT) Canada's industrial capacity, consensus 81.7%, previous 82.7%.
- (1000ET/1400 GMT) US July wholesale inv/sales, +0.3%, +0.1% m/m eyed; last +0.9%, +0.1%.
Key Events Ahead
- (0700 ET/1100 GMT) BoE MPC policy announcement/minutes, no change 0.5% bank rate, QE eyed.
- (0700 ET/1100 GMT) ECB Praet speech at Bussum, Netherlands conference.
- (0745 ET/1145 GMT) FedTrade operation 15-year Fannie Mae / Freddie Mac (max $600 mn).
FX Recap
The EUR/USD pair trades -0.18% lower at 1.1193, quickly retracing from fresh session lows reached at 1.1171 levels. The main currency pair failed to resist 1.12 barriers and extends its decline this session as risk-aversion fades on the back of recovery in the European stocks, which is seen restoring investors' confidence in riskier assets. Pair has made intraday high at 1.1244 and low at 1.1171 levels. The next risk event for the pair will be Friday's release of the final figures of German inflation during last month, with headline prices expected to have risen at an annual pace of 0.2%. There was nothing of relevance to be reported in the EUR calendar today, markets will closely tracking the sentiment around the European indices. Initial support is seen around at 1.1015 and resistance at 1.1363 levels. Option expiries are at 1.1100 (680M), 1.1150 (892M), 1.1200 (1.2BLN), 1.1240 (505M).
The USD/JPY rose sharply to its weekly high, as the yen suffered amid strongly improved market sentiment provoked by the Chinese reforms announcement. Meanwhile in the US, JOLTS spiked the most since December 2000. Today Japan released core machinery orders and PPI data with negative numbers. Core machinery orders released at -3.6% mm vs previous -7.9%, while PPI data released at -3.6% vs previous -3.1%. Pair is currently trading at 120.76 levels. It has made intraday high at 121.32 and low at 119.97 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 120.00 (1.7BLN), 120.60-70 (800M), 121.00 (1.3BLN), 121.10-20 (920M), 121.50 (1.1BLN).
The Bank of England kept policy unchanged at its September meeting, and again remained split 8-1 against the rate hike, as Ian McCafferty continued to vote for an immediate increase by 25 basis points, the Monetary Policy Committee (MPC) minutes showed on Thursday. Sterling rose to day's high of $1.5432 after BoE minutes from around $1.5390, against euro also it rose to day's high of 72.53 pence per euro from around 72.735 beforehand. September's MPC minutes continue to sound more dovish as downside risks to global activity and the inflation outlook increased since the August Inflation Report. Global markets' volatility, significant 'low inflationary' forces, and mixed macro data continue to ease the pressure on the Bank of England to slowly begin returning monetary policy toward more normal levels. Regarding the outlook for economic growth, the BoE lowered its estimate for the third-quarter growth to 0.6%, down from 0.7% it expected in August. It made an intraday high at 1.5448 and low at 1.5338 levels. Pair is currently trading at 1.5440 levels. Initial support is seen at 1.5185 and resistance is seen around 1.5436 levels. Option expiries are at 1.5400 (239M), 1.5520 (235M).
New Zealand's dollar fell over 2 pct after the RBNZ cut interest rates and said policy could be eased further if China's economy continues to slow down. After the policy statement, the Kiwi dollar plunged to as low as $0.6256, before recovering a little to around $0.6297 in European trading, still down 1.7 percent on the day. Thursday's cut marks the third consecutive 25-basis point rate cut since June. "At this stage, further easing seems likely," Wheeler said. The central bank predicts that the economy will expand some 2% this year, down from more than 3% last year. Pair made intraday low at 0.6255 and high at 0.6382 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels.
The Australian dollar was driven primarily by market sentiment which seems to be risk-off again, causing downside pressure on the Aussie. However, upbeat jobs data helped the currency to bounce back from intraday lows. The Australian jobs market saw 17,400 people added to the workforce in August, much more than the initially expected 5,000. The unemployment rate declined to 6.2% from last month's 6.3%, providing some relief for the Aussie. Pair is supported above 0.7000 levels and trading at 0.7077 levels. It has made intraday high at 0.7092 levels and low at 0.6946 levels. Initial support is seen at 0.6908 and resistance at 0.7122 levels. Option expiries are at 0.7000 (744M), 0.7100 (300M).
Markets Recap
World stocks moved back into reverse on Thursday after four straight days of gains following a heavy overnight oil dip and more uncertain news from China and Japan but also from Brazil and New Zealand.
Europe's FTSEurofirst 300 fell 1 pct to 1,421.63 points in early trades, Britain's FTSE 100 was down 0.9 pct, France's CAC 40 edged down 0.9 pct and Germany's DAX was trading lower 0.9 pct.
China's CSI300 and Shanghai Composite Index ended between 1.2 percent and 1.4 percent in the red. Hong Kong and Australian stocks both lost more than 2 percent. Tokyo's Nikkei Average closed down 2.51 pct at 18,299.62.
Commodities Recap
Oil prices edged higher on Thursday ahead of weekly U.S. stocks data, despite fresh signs of an economic slowdown in China and Japan that fuelled concerns growth could be grinding to a halt. Brent crude futures rose 21 cents to $47.79 per barrel by 0845 GMT. U.S. crude futures were up 35 cents at $44.50 a barrel. Brent crude oil halved in price in little over a year, was hovering at $47.24 per barrel and WTI U.S. crude was at $44.03 a barrel.
Gold edged off four-week lows on Thursday as European stocks snapped a three-day run of gains, but traders remained cautious as they awaited fresh clues on the timing of a U.S. rate rise. Spot gold was up 0.2 percent at $1,107.07 an ounce at 0932 GMT, while U.S. gold futures for December delivery were up $4.70 an ounce at $1,106.70.
Treasuries Recap
European bond investors saw the market jitters and signs that the European Central Bank will expand its stimulus programme as a reason to stock up on German Bunds. German bond yields fell 3 bps in early trade on Thursday to 0.68 percent and bund futures opened 37 ticks higher at 154.86.
Spanish, Italian, Portuguese 10-year government bond yields fell 4-8 bps, reversing earlier rise.
The U.K. gilts opened 46 ticks higher than the settlement of 117.91, as predicted, after below forecast China PPI drove more growth concerns.
Japanese government bonds climbed, taking their cue from a downturn in Tokyo equities and a solid outcome from a 5-year JGB auction, the yield on 5-year JGBs was down half a basis point at 0.060 percent. The benchmark 10-year JGB yield fell 1 bp to 0.350 percent, while the 10-year JGB futures price ended up 0.13 point at 148.07, moving back toward this week's high of 148.34, which was its highest level since late January.
Australian government bond futures were firm, with the 3-year bond contract up 1 tick at 98.145. The 10-year contract added 3.5 ticks to 97.2675. NZ government bonds rallied, with government bond yields sliding as much as 6 basis points at the front end of the curve.
