Market Roundup
• US Initial Jobless Claims w/e 240k, 242k forecast, 245k previous.
• US Jobless Claims 4-Wk Avg w/e 241.75k, 244.25k previous.
• US Continued Jobless Claims w/e 1.968m, 1.955m forecast, 1.965m previous.
• US ISM N-Mfg PMI Jul 53.9, 57.0 forecast, 57.4 previous.
• US Markit Comp Final PMI Jul 54.6, 54.2 previous.
• US Markit Svcs PMI Final Jul 54.7, 54.2 previous.
• US Durable Goods, R MM Jun 6.4%, 6.5% previous.
• US Factory Orders MM Jun 3.0%, 2.9% forecast, -0.3 previous.
• US ISM N-Mfg Employment Idx Jul 53.6, 56.5 forecast, 55.8 previous.
• US ISM N-Mfg New Orders Index Jul 55.1, 60.5 previous.
• US ISM N-Mfg Price Paid Index Jul 55.7, 52.1 previous.
• Atlanta Fed estimates US Q3 GDP growing at 4.0 percent.
• Fed weighs changes to reduce bank boards' regulatory role.
• Trump administration wants clean debt ceiling hike –CNBC.
• Chafing over thwarted rapprochement, Trump blames Congress for Russia chill.
• US may soon expand UN talks on N.Korea sanctions, signaling China deal –diplomats.
• Trump pressured Mexico president on border wall payment –report.
• Brexit-wary Bank of England leaves rates on hold, cuts growth forecast.
• Mexico consumer confidence hits one-year high in July.
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Retail Sales MM Jun 0.2% forecast, 0.6% previous.
• 01:30 Australia Retail Trade QQ Q2 1.2% forecast, 0.1% previous.
• 00:00 Japan Overtime Pay Jun 0.7% previous.
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1179 levels and currently trading at 1.1863 levels. The pair has made session high at 1.1892 and hit lows at 1.1838 levels. The euro inched higher against the dollar on Thursday as weaker-than-expected U.S. services sector data worried investors ahead of jobs data and stoked doubts that the Federal Reserve would raise interest rates again in 2017.A report from the Institute for Supply Management (ISM) showed its non-manufacturing index fell to 53.9 last month from 57.4 in June. While a reading above 50 in the ISM index indicates expansion in the sector, the figure came in below expectations of economists for a reading of 57.0. The non-manufacturing employment index fell to 53.6, below economists' expectations for a rise to 56.5. In an, another report U.S. labor market data showed the number of Americans filing for unemployment benefits fell last week. Friday's employment report for July is this week's main economic focus. Employers are expected to have added 183,000 jobs in the month, according to the median estimate of 92 economists. The U.S. dollar held near 15-month lows, giving up slight gains against a basket of major currencies on doubt about the likelihood of a Fed rate hike this year and the grand jury report.
GBP/USD is supported in the range of 1.3093 levels and currently trading at 1.3133 levels. It reached session high at 1.3154 and dropped to session low at 1.3111 levels. Sterling declined sharply against the dollar on Thursday after the Bank of England voted 6-2 in favour of keeping interest rates at their record lows and revised down its growth and inflation forecasts. BOE Governor Mark Carney and his top officials reiterated their message that they might raise borrowing costs by slightly more than investors expect over the next three years, possibly within a year. But markets focused on the Bank's downward revision of its 2017 growth forecasts, to 1.7 percent from 1.9 percent in May, as well as its unexpected lowering of its inflation projections, which it now saw at just under 2.6 percent in a year's time after peaking at around 3 percent in October. The Bank also kept its asset purchase programmes unchanged and said a bank lending scheme would end as previously scheduled in February 2018.A few weeks ago, investors had begun to price in the chance that the BoE might raise interest rates for the first time in a decade this month, after a series of hawkish remarks by policymakers including Carney and Haldane. Sterling fell around a cent against the dollar, plumbing a three-day low of $1.3140, having earlier reached an 11-month high of $1.3267 against the U.S. currency.
USD/CAD is supported at 1.3237 levels and is trading at 1.2583 levels. It has made session high at 1.2604 and lows at 1.2550 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as commodity-linked currencies extended this week's losses after solid gains over recent months. Losses for the loonie came as data showed Toronto home sales plummeted in July from a year earlier and prices were down nearly 19 percent from April as government moves to cool a long housing boom in Canada's largest city spooked buyers. A slowdown in the country's housing market could weigh on Canada's economy and reduce the number of additional interest rate increases from the Bank of Canada that the market expects, after the central bank hiked last month for the first time in nearly seven years. Economist expects the Bank of Canada to raise rates a further three times by the end of 2018. The Canadian dollar was trading at C$1.2580 to the greenback, or 79.41 U.S. cents, down 0.2 percent. The currency's strongest level of the session was C$1.2566, while it touched its weakest since July 20 at C$1.2618.
USD/JPY is supported around 109.19 levels and currently trading at 110.07 levels. It peaked to hit session high at 110.50 and made session lows at 109.91 levels. The Japanese yen strengthened against the dollar on Thursday as appetite for the safe-haven currencies increased as caution prevailed ahead of a key U.S. jobs report that could influence the Federal Reserve's timing on interest rate hikes. U.S. private employers added 178,000 jobs in July, below economists' expectations, a report by payrolls processor showed on Wednesday, ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday. Thursday's data dampened expectations for a strong payrolls figure and December Fed rate increase. Economists expect U.S. employers to have added 183,000 jobs in July, down from 222,000 in June. Fed funds futures on Thursday implied traders saw a roughly 44 percent chance of a Fed rate hike in December, according to CME Group's FedWatch tool. The dollar's losses against the yen reached 0.7 percent on the day after the data, with the greenback touching a session low of 109.96 yen.
Equities Recap
European shares inched up on Thursday as solid company earnings more than offset a weak energy sector and a slump in German industrial giant Siemens on delays to a planned unit listing.
UK's benchmark FTSE 100 closed up by 0.89 percent, the pan-European FTSEurofirst 300 ended the day up by 0.15 percent, Germany's Dax ended down by 0.20 percent, France’s CAC finished the day up by 0.55 percent.
The S&P 500 and the Nasdaq fell on Thursday, weighed down by Amazon.com, Apple and other top-shelf technology stocks, while the Dow Jones Industrial edged up to a seventh straight record high.
Dow Jones closed up by 0.04 percent, S&P 500 ended down by 0.22 percent, Nasdaq finished the day down by 0.35 percent.
Treasuries Recap
U.S. Treasury yields fell to more than one-week lows on Thursday after the Bank of England kept interest rates at a record low and downgraded its economic and inflation forecasts, raising concerns about global economic growth.
U.S. benchmark 10-year Treasury notes gained 10/32 in price to yield 2.225 percent, down from 2.262 percent late on Wednesday. The yield on benchmark notes touched 2.218 percent, the lowest since June 29, after the grand jury report.
Commodities Recap
Oil prices fell on Thursday, as cautious buying dried up after U.S. crude rose to near $50 a barrel, with concern about high crude supplies from producer club OPEC offsetting the previous day's data showing record U.S. gasoline demand.
Benchmark Brent crude settled down 35 cents a barrel at $52.01 a barrel. U.S. light crude was 56 cents lower at $49.03. U.S. crude traded at a session high of $49.96 a barrel.
Gold steadied on Thursday, hovering below Tuesday's seven-week high, as investors awaited U.S. jobs data for further clues on the outlook for interest rates.
Spot gold was 0.15 percent higher at $1,268.15 an ounce by 2:02 p.m. EDT (1802 GMT), not far from Tuesday's seven-week high of $1,273.97. U.S. gold futures for December delivery settled down 0.3 percent at $1,274.40.
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