- Firmer stock markets put yen/euro under early pressure.
- EUR/USD slipped to 1.1135, then recovered to 1.1178 levels.
- USD/JPY off from 120.28 to 119.99 in Europe.
- GBP bolstered by UK manufacturing survey, holds above 5 month low.
- European shares lifted by rise in auto and mining stocks.
- DAX off 9788 high but still up 0.3% on day.
- GBP/USD plays in between 1.5107/1.5155 levels. EUR/GBP trading in between 0.7356/0.7388 levels.
- Euro zone September Markit manufacturing final PMI 52.0 vs previous 52.0. 52.0 expected.
- UK September Markit/CIPS manufacturing PMI 51.5 vs previous 51.6 revised, 51.3 expected.
- Switzerland September Manufacturing PMI 49.5 vs previous 52.2. 51.8 expected.
- Switzerland August Retail sales -0.3% y/y vs previous 0.1% revised.
- Swedish September manufacturing PMI 53.3 vs 54.3 forecast.
- Norway C/B Gov- Depreciation of NOK contributing to underpinning inflation.
- Japan big manufacturers' mood worsens in Q3.
- Yamamoto- BOJ should ease policy in Oct, next week difficult.
- (0730 ET/1130 GMT) US September Challenger layoffs; last 41.19k.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 270k eyed; last 267k.
- (0930 ET/1330 GMT) Canada Manufacturing PMI.
- (0945 ET/1345 GMT) US September Markit manufacturing PMI - final; flash 53.0.
- (1000 ET/1400 GMT) US September ISM manufacturing PMI, 50.6 eyed; last 51.1.
- (1000 ET/1400 GMT) US August construction spending, +0.5% m/m eyed; last +0.7%.
- (1030 ET/1430 GMT) EIA releases Natural Gas storage.
- (1330 ET/1730 GMT) US September total motor vehicle sales, 17.6 mln AR eyed; last 17.81 mln.
- (1400 ET/1800 GMT) Brazil Trade Balance.
Key Events Ahead
- (0930 ET/1330 GMT) ECB President Draghi speech at Atlantic Council event in Washington, DC.
- (1430 ET/1830 GMT) SF Fed Williams speech in Salt Lake City, Utah.
FX Recap
EUR/USD: As global stock markets inched higher after their worst quarterly performance in four years, the euro came under pressure on Thursday, down 0.3 pct at $1.1145. After yesterday's weak inflation figures, a set of manufacturing PMIs failed to provide any support and held the euro down. Activity in Germany's manufacturing sector slowed to 52.3 points in September, missing the 52.5 expected by the market, from 53.3 booked a month before. For the euro zone as a whole, Markit reported 52 points, in line with estimates, following 52.3 recorded for August. It made intraday high at 1.1178 and low at 1.1133 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels. Option expiries are at 1.1100 (709M), 1.1160 (751M), 1.1265-70 (1.5BLN).
USD/JPY: The safe haven yen also was under pressure from the firmer stock markets, the dollar was buying 120.15 yen, up about 0.3 pct from late U.S. trading. The Japanese yen was the biggest loser today amid persisting improved risk-sentiment while dismal Japanese manufacturing index also weighed. The Tankan quarterly business survey showed that the large manufacturers' index fell from 15 to 12 in the September quarter, opposed to expectations of 13. The yen further lost pace versus the greenback after ex-BOJ deputy Governor Iwata, noting that further scope for easing is on the cards. Pair is supported above 120.00 levels. Pair made intraday high at 120.27 and low at 119.76 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 119.70 (626M), 119.85-95 (540M), 120.00 (1.6BLN).
GBP/USD: Sterling inched higher from 5-month lows against the dollar, boosted by a slightly better-than-expected UK manufacturing data last month. It was up 0.15 pct at $1.5150, having fallen to $1.5107 earlier in the day. The euro was 0.4 pct lower at 73.65 pence. Today UK PMI data released with flat numbers at 51.5. Labour market productivity in the UK picked up sharply during the second quarter. The headline figure as measured by output per hour grew 0.9% from the first to the second quarter - the highest level since early 2010, but still some 15% below the pre-downturn trend, the Office for National Statistics informed on Thursday. Pair made intraday high at 1.5157 and low at 1.5106 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: The kiwi increased against the greenback on Thursday, extending its two-day leap as investors digested less business pessimism in New Zealand, while the buck had to handle the unexpectedly weaker Chicago PMI update. Market participants will remain vigilant on the US releases ahead in the day, with the ISM Manufacturing and Initial Claims taking centre stage, followed by the speech by FOMC's Williams. Pair now trades 0.34% higher at 0.6440 levels. It made intraday high at 0.6449 and low at 0.6385 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels. Option expiry is at 0.6450 (302M).
AUD/USD: The Australian dollar extended its gains on Thursday following the better-than-expected results from the Chinese manufacturing sector. China's manufacturing Purchasing Managers' Index (PMI) rose from 49.7 in August to 49.8 last month, coming in higher than the market forecast of 49.7. Aussie traded 0.71% higher at $0.7064 against the US dollar, up from $0.7053 on Thursday afternoon in Sydney. It hovered around the freshly hit daily high of $0.7084. Pair made intraday low at 0.6998 levels. Initial support is seen at 0.6908 and resistance at 0.7245 levels. Option expiries are at 0.6990 (317M), 0.7000 (569M).
Equities Recap
World stocks and commodities brought a solid start to Q4 2015 on Thursday after losing Q3, as surveys of Chinese factory activity proved upbeat than many global investors had feared.
Europe's FTSEuroFirst 300 was up 1 pct, Britain's FTSE100 rose 1.2 pct, France's CAC40 jumped 1.4 pct, Germany's DAX rose 0.9 pct and Spain's IBEX was 1.2 pct up.
Tokyo's Nikkei jumped nearly 2 pct up and set the pace as the whole of Asia made gains, China's CSI sparked 0.5-0.7 pct gains ahead of a week-long holiday.
MSCI's benchmark global EM index rose 0.8 pct as the hard hit Brazilian real, Malaysian ringgit Turkish lira and Chilean peso also all held their ground.
Commodities Recap
Crude oil prices rose up on Thursday as demand was estimated to have risen in H1, but a steeper rise was prevented by renewed signs of Asia's economic slowdow. U.S. crude climbed up 1.5 pct at $45.70 a barrel. Brent crude was up 0.9 pct to $48.83 a barrel.
Gold fell to 2-week lows on Thursday following its biggest quarterly loss in a year, after upbeat U.S. jobs data boosted speculation on US Fed's interest rate hike this year. Spot gold dropped down 0.1 pct at $1,113.36 an ounce by noon, after earlier dropping to $1,110.75, its lowest since Sept. 16. U.S. gold futures for December delivery fell down $2.10 an ounce at $1,113.10.
Treasuries Recap
Europe's benchmark bond markets were largely unchanged as most investors waited for closely watched U.S. jobs data on Friday likely to influence bets on Fed rate hikes.
Japanese government bonds were up across the curve on Thursday, after decent results at an auction of 10-year notes.The benchmark 10-year JGB yield dropped 1.5 bps to 0.330 pct, after earlier rising as high as 0.340 pct. 20-year yield dropped 2 basis points to 1.105 pct, while the 30-year yield slipped 1.5 bps to 1.380 pct, after rising as high as 1.120 pct and 1.390 pct earlier. The 10-year JGB futures price closed up 0.17 point at 148.33.
UK Gilts opened 6 ticks lower than the settlement of 119.06, as expected, as Asian equities enjoyed a decent start to the month on a better than expected Tankan report. Dec Gilts were around 4 ticks lower after the release at 118.95. Britain sold 4 billion pounds of conventional gilts due 2021 on Thursday.
New Zealand government bonds eased, pushing yields 2bps higher on the longer end of the curve. Australian government bond futures were steady, with the 3-year bond contract rising one tick at 98.210. The 10-year contract was half a touch lower at 97.3700.
