Market Roundup
•US Real Consumer Spending (Q1) 2.7%,2.5% previous
•US GDP Sales (Q1) -0.6%,1.5% previous
•US Core PCE Prices (Q1) 5.2%, 5.40% forecast, 5.00% previous
•US GDP Price Index (QoQ) (Q1) 8%, 7.3% forecast, 7.1% previous
•US Initial Jobless Claims 180K ,180K forecast,184K previous
•US Jobless Claims 4-Week Avg 179.75K ,177.25K previous
•US Continuing Jobless Claims 1.408M,1,403K forecast, 1,417K previous
•US Apr KC Fed Composite Index 25, 37 previous
•US Apr KC Fed Manufacturing Index 28, 46 previous
Looking Ahead - Economic Data (GMT)
•01:00 Australia PPI (YoY) (Q1) 3.7% previous
•01:00 Australia Mar Private Sector Credit (MoM) 0.6% previous
•01:00 Australia PPI (QoQ) (Q1) 1.5% forecast, 1.3% previous
•01:30 China Apr Caixin Manufacturing PMI 50.0 forecast, 48.1 previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro edged higher from recent lows against U.S. dollar on Thursday after strong German inflation data fuelled expectations for a quicker pace of monetary tightening by the European Central Bank. German annual inflation rose 7.8%, slightly more than expected in April due to energy prices and delivery bottlenecks caused by supply chain interruptions. Money markets’ expectations for an ECB rate hike inched higher, now pricing in around 85 bps rate hikes by year-end, from 80 bps before the German data. The euro was last $1.0510, after earlier reaching$1.0470, the lowest since Jan. 2017. Immediate resistance can be seen at 1.0583(38.2%fib), an upside break can trigger rise towards 1.0629 (5DMA).On the downside, immediate support is seen at 1.0472(Daily low), a break below could take the pair towards 1.0400 (Psychological level).
GBP/USD: The British pound edged lower on Thursday and was still trading near a 21-month low against a buoyant U.S. dollar . Expectations of aggressive Fed tightening this year have pushed yields on U.S. 10-year notes around 45 basis points this month, in turn sending the dollar index to a five-year high.Meanwhile, the Bank of England’s Monetary Policy Committee is scheduled to meet next week and looks set to lift its policy interest rate by 25 basis points, marking the fourth consecutive meeting in which rates have been increased. Immediate resistance can be seen at 1.2569 (38.2%fib), an upside break can trigger rise towards 1.2641(50%fib).On the downside, immediate support is seen at 1.2441 (23.6%fib), a break below could take the pair towards 1.2400(Psychological level).
USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Thursday, recovering from its weakest level in more than seven weeks, as oil prices rose and equity markets clawed back some recent declines. U.S. crude oil futures settled 3.3% higher at $105.36 a barrel, while the U.S. dollar surged to its highest levels in two decades against a basket of major currencies, propelled by widespread weakness in its major rivals, such as the yen and the euro .The loonie was trading 0.1% higher at 1.2805 to the greenback, or 77.09 U.S. cents, after touching its weakest intraday level since March 9 at 1.2879. It was the only Group of 10 currency to gain ground against the greenback.. Immediate resistance can be seen at 1.2851(23.6fib), an upside break can trigger rise towards 1.2891 (March 9th high).On the downside, immediate support is seen at 1.2771 (38.2%fib), a break below could take the pair towards 1.2701 (38.2%fib).
USD/JPY: The dollar hit a 20-year high against rivals on Thursday as the Bank of Japan doubled down on its dovish policy, sending the yen to its weakest level since 2002, while the euro hit a five-year low on growth concerns for the region. The dollar shot past the key level of 130 yen after the BOJ strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target. The weak yen helped to catapult the dollar to its highest level since December 2002 against a basket of currencies. The yen was last at 130.90, after reaching 131.25, the weakest since April 2002.Strong resistance can be seen at 130.95(23.6%fib), an upside break can trigger rise towards 132.12(Higher BB).On the downside, immediate support is seen at 128.19(38.2%fib), a break below could take the pair towards 128.35(Daily low).
Equities Recap
European shares snapped a three-day gaining streak on Thursday as concerns over the scale of economic damage caused by the coronavirus outbreak overtook optimism over support from monetary stimulus.
UK's benchmark FTSE 100 closed up by 1.13 percent, Germany's Dax ended up by 1.35 percent, France’s CAC finished the day up by 0.98 percent.
U.S. stock indexes dropped more than 2% on Thursday as the swift spread of the coronavirus in the United States led California to declare an emergency, while airline stocks were hammered by crippled travel demand.
Dow Jones ended up by 1.86 percent, S&P 500 ended up by 2.47 percent, Nasdaq was ended down by 3.06 percent.
Treasuries Recap
Benchmark 10-year Treasury yields rose to near their highest levels of the year on Thursday after signs of strength in the U.S. job market outweighed an unexpected decline in economic growth in the first quarter.
The yield on 10-year Treasury notes was up 5.5 basis points to 2.873%.The yield on the 30-year Treasury bond was up 2.6 basis points to 2.935%.
Commodities Recap
Gold prices lingered close to a 10-week trough on Thursday, hurt by a robust dollar and expectations of faster U.S. rate hikes.
Spot gold was up 0.3% at $1,890.90 by 1822 GMT. It hit its lowest level since Feb. 17 at $1,871.81 earlier in the session. U.S. gold futures settled up 0.1% at $1,891.30.
Oil settled higher on Thursday on the increased likelihood that Germany will join other European Union member states in an embargo on Russian oil, which could further tighten supplies in the already stressed global crude market.
Brent crude futures rose $2.27 to settle at $107.59 a barrel while U.S. West Texas Intermediate crude rose $3.34, or 3.3% to $105.36.
