Market Roundup
• US Initial Jobless Claims w/e, 236k, 237k forecast, 234k previous.
• US Continued Jobless Claims w/e, 1.942M, 1.950M forecast, 1.954M previous.
• US Core PCE Price Index MM Jul, 0.1%, 0.1% forecast, 0.1% previous.
• US Core PCE Price Index YY Jul, 1.4%, 1.5% previous.
• US Consumption Adjusted MM Jul, 0.3%, 0.4% forecast, 0.1% previous.
• US Pending Home Sales Change MM Jul, -0.8%, 0.5% forecast, 1.5% previous.
• US Personal Consumption Real MM Jul, 0.2%, 0.0% previous.
• US Personal Income MM Jul, 0.4%, 0.3 forecast, 0.0% previous.
• US Chicago PMI Aug, 58.9, 58.5 forecast, 58.9 previous.
• CA GDP QQ Annualized Q2, 4.5%, 3.7% forecast, 3.7% previous.
• CA GDP MM Jun, 0.3%, 0.1% forecast, 0.6% previous.
• Hurricane Harvey could push forward U.S. debt ceiling deadline -Mnuchin .
• The US retaliates against Russia, orders closure of consulate, annexes.
• EU keeps up Brexit talks pressure, Davis signals cash offer.
• US bombers drill over Korean peninsula after latest N.Korea launch.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Terms of Trade QQ Q2, 3.5% forecast, 5.1% previous
• 22:45 New Zealand Terms of Trade Imports Q2, 0.2% forecast, 2.7% previous
• 22:45 New Zealand Terms of Trade Exports Q2, 3.0% forecast, 8.0% previous
• 23:50 Japan Business Capex (MOF) YY Q2, 4.5% previous
• 00.30 Japan Nikkei Mfg PMI Aug, 52.8 previous
• 01:45 China Caixin Mfg PMI Final Aug, 50.9 Rtrs f/c, 51.1 previous
• 05:00 Japan Consumer Confid. Index Aug, 43.8 previous
Looking Ahead - Events, Other Releases (GMT)
• 14:00 Board of Governors of the Federal Reserve conducts open meeting
• 09:15 ECB’s Constancio speaks in Cernobbio, Italy
Currency Summaries
EUR/USD is likely to find support at 1.1820 levels and currently trading at 1.1897 levels. The pair has made session high at 1.1909 and hit lows at 1.1834 levels. The euro dipped against the dollar on Thursday as growing speculation suggested that a number of European Central Bank policymakers were concerned by the strength of the euro and may go slower tightening monetary policy as a result. The euro has been falling steadily since hitting a more than 2-1/2 year high against the dollar on Tuesday of $1.2069, driven by strong U.S. economic data and concerns that the ECB will have to alter course in response to the euro's 13 percent rise this year. Three sources familiar with discussions told Reuters that formal talks over the future of the bank's stimulus scheme were only beginning, meaning the ECB is highly unlikely to take any decision to start reining it in at a meeting next Thursday. The euro was last down just 0.1 percent at $1.1866, but was still set to gain 0.3 percent in August and notch its sixth straight monthly rise. The dollar index, which measures the greenback against a basket of six major rivals, was last up just 0.1 percent at 92.951. Traders awaited Friday's U.S. August non-farm payrolls report, which economists polled expect will show U.S. employers added 180,000 jobs.
GBP/USD is supported in the range of 1.2851 levels and currently trading at 1.2927 levels. It reached session high at 1.2934 and dropped to session low at 1.2861 levels. Sterling declined against the dollar on Thursday as investors cautious as uncertainty over Britain’s exit from the European Union and weak economic data weighed. Investors appeared to ignore comments that could be considered supportive for the currency from Bank of England policymaker Michael Saunders, who said interest rates needed to rise soon. Saunders, one of two BoE rate-setters who have voted recently for a rise in the bank rate, said the central bank risked being rushed into sharper rate hikes in future, potentially hurting growth, if it did not start to ease the economy off its near-zero rates now. But investors broadly think rates will stay close to zero until there is more clarity on a Brexit deal. Some reckon that the BoE will try to talk up the currency in order to keep a lid on inflation, which has shot up this year as a result of the sharp falls in the pound since last year’s EU referendum. Sterling was down 0.3 percent at $1.2890 by 1630 GMT on Thursday and slipped the same amount against the euro, at 92.17 pence. For the month, the pound fell 3 percent on a trade-weighted basis, its sharpest falls since October.
USD/CAD is supported at 1.2439 levels and is trading at 1.2491 levels. It has made session high at 1.2574 and lows at 1.2483 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday after data showing Canada's economy expanded at the fastest pace in nearly 6 years boosted chances of another interest rate hike from the Bank of Canada. Gross domestic product grew at an annualized 4.5 percent pace, handily topping forecasts for 3.7 percent, as consumers continued to spend and energy exports rose, data from Statistics Canada showed. Separate data showed GDP grew 0.3 percent in June. Chances of a rate hike as soon as next week climbed to one-in-three from around 20 percent before the data, while investors see a greater-than 80 percent chance of a hike by October, data from the overnight index swaps market shows. The central bank's policy rate sits at 0.75 percent, after it was raised in July for the first time in nearly seven years. Adding to support for the loonie, U.S. crude oil prices rebounded after being pressured this week by storm Harvey, which knocked out almost a quarter of U.S. refineries. The Canadian dollar was trading at C$1.2484 to the greenback, up 1.09 percent. The currency's strongest level of the session was C$1.2478, while it touched its weakest since Aug. 18 at C$1.2663.
AUD/USD is supported around 0.7900 levels and currently trading at 0.7994 levels. It hit session high at 0.7948 and made session lows at 0.7887 levels. The Australian dollar rose against US dollar on Thursday as dollar dipped after unimpressive U.S. economic data failed to boost expectations for another Federal Reserve rate increase this year, while month-end investment flows and caution ahead of Friday's U.S. jobs report also weighed. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.3 percent last month after a 0.2 percent gain in June. Economists had forecast consumer spending rising 0.4 percent in July. In the 12 months through July, the personal consumption expenditures (PCE) price index excluding food and energy or "core PCE" price index increased 1.4 percent, the smallest gain since December 2015. The Australian dollar stood at $0.7949, down from Wednesday's high of $0.7996.It hit a two-year peak of $0.8066 in late July, but has since faltered at stiff chart resistance around 80 U.S. cents. The Aussie is poised to end August 1.2 percent down on a generally higher U.S. dollar and as investors remain cautious about geopolitical tensions involving North Korea.
Equities Recap
European shares rose for a second day on Thursday following heavy losses on jitters over North Korea but posted a third straight month of decline, while a profit warning from Carrefour sank the retail sector.
UK's benchmark FTSE 100 closed up by 0.99 percent, the pan-European FTSEurofirst 300 ended the day up by 0.79 percent, Germany's Dax ended up by 0.60 percent, France’s CAC finished the day up by 0.70 percent.
U.S. stocks closed higher on Thursday as investors reacted to economic data and took cautious hope from Washington's latest promises for long-awaited details of a tax reform plan.
Dow Jones closed up by 0.27 percent, S&P 500 ended up 0.57 percent, Nasdaq finished the day up by 0.94 percent.
Treasuries Recap
U.S. Treasury prices gained on Thursday after consumer spending data showed continuing low inflation, and as tensions with North Korea kept up demand for the safe haven bonds.
Benchmark 10-year notes gained 7/32 in price to yield 2.121 percent, down from 2.145 percent on Wednesday.
Commodities Recap
Gasoline futures surged more than 13 percent on Thursday, and crude oil settled nearly 3 percent higher, as almost a quarter of U.S. refining capacity remained offline and traders scrambled to reroute millions of barrels of fuel.
U.S. gasoline futures have rallied more than 28 percent from the previous week to a two-year high above $2 a gallon, buoyed by fears of a fuel shortage days ahead of the U.S. Labor Day weekend's traditional surge in driving. Gasoline settled up 25.52 cents, or 13.54 percent, at $2.1399.
U.S. West Texas Intermediate (WTI) crude futures settled $1.27 higher at $47.23 per barrel, up 2.76 percent. It remained on track to close August down almost 6 percent, the steepest monthly loss since March.
International benchmark Brent crude settled $1.52 higher, or 2.99 percent, at $52.38 a barrel. It had fallen by just over 2 percent in the previous session.
Gold prices rose on Thursday, nearing Tuesday's 9-1/2-month high as the dollar retreated after data showed the pace of U.S. annual inflation slowed, while rising security concerns triggered by tensions on the Korean peninsula provided safe-haven support.
Spot gold was up 0.8 percent at $1,319.31 an ounce by 2:05 p.m. EDT (1805 GMT), on track for a nearly 4 percent rise for August, which would be its strongest monthly performance since January. On Tuesday, it rose to a 9-1/2-month high at $1,325.94.U.S. gold futures settled up 0.6 percent at $1,322.20.
