Market Roundup
• US Initial Jobless Claims w/e 248k vs 239k forecast, 235k previous.
• US Jobless Claims 4-wk Avg 238k, 235.5k previous.
• US Continued Jobless Claims w/e 1.915m vs 1920m forecast, 1.924m previous.
• US ADP National Employment May 253.0k vs 185k forecast, +174k previous.
• US Markit Mfg PMI Final Jun 52.7, 52.5 previous.
• US ISM Mfg PMI May 54.9 vs 54.5 forecast, 54.8 previous.
• US Construction Spending MM Apr -1.4% vs 0.5% forecast, +1.1% previous.
• Atlanta Fed raises U.S. Q2 GDP growth view to 4.0% based on the latest economic data.
• Fed's Powell: expects a tax cut will affect US economy in 2018.
• Powell: expects three rate hikes this year, doesn't see balance sheet falling below $2.5 trillion.
• Trump will announce U.S. withdrawal from Paris climate accord –document.
• Ex-FBI Chief Comey to testify next week in Russia probe.
• U.S. sanctions more people, firms over North Korea arms –Treasury.
• PM May's lead falls to 3 pct points, YouGov poll shows a week before UK election.
• Mexico central bank members hiked rates to avoid price risks – minutes.
• Brazil's Q1 GDP grew 1.0%, matching economists' forecasts, biggest rise since Q2 2013
Looking Ahead - Economic Data (GMT)
• 01:00 Australia HIA New Home Sales MM Apr -1.1% previous
• 05:00 Japan Consumer Confidence Index May 43.2 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1170 levels and currently trading at 1.1215 levels. The pair has made session high at 1.1232 and hit lows at 1.1202 levels. The euro declined against the dollar on Thursday as the dollar rallied after a report showed that U.S. economy created more private sector jobs than expected in May, bolstering expectations for an interest rate hike this month. The U.S. dollar hit session highs against major currencies such as the yen, euro, and Swiss franc following the jobs report. The private sector employment report by payrolls processor ADP showed employers added 253,000 jobs last month. Economists had forecast the ADP report would show a gain of 185,000 jobs. Other U.S. economic reports on were mixed, with U.S. jobless claims rising to 248,000, construction spending falling 1.4 percent, and the Institute for Supply Management's manufacturing index gaining slightly to 54.9. Interest rate futures after all the data priced in a 91 percent chance the Federal Reserve would hike rates in June. That was down a little bit from the previous day. In late trading, the dollar rose 0.5 percent to 111.29 yen, while the euro fell 0.2 percent to $1.1214.
GBP/USD is supported in the range of 1.2825 levels and currently trading at 1.2883 levels. It reached session high at 1.2914 and dropped to session low at 1.2863 levels. British pound strengthened slightly against the dollar on Thursday as upbeat UK manufacturing data gave sterling a minimal boost as traders eyed radically conflicting polls on next week's British elections. A May survey of purchasing managers in the manufacturing sector beat forecasts of economists, but the pound's reaction was small, temporarily trimming some losses against the dollar. The Markit/CIPS manufacturing purchasing managers' index (PMI) slipped to 56.7 in May from a three-year high in April. Aside from the previous month's PMI, that was its strongest reading since June 2014. Britons vote in a week's time in an early national election called by Prime Minister Theresa May to bolster her standing before nearly two years of talks to leave the European Union. Investors had bet a landslide victory for May would translate into a stronger hand in Britain's exit negotiations with the European Union. But recent polls predicting outcomes ranging from a slim majority for the Conservatives to a hung parliament for the vote on June 8 have shaken some investors, causing the pound to see-saw over the past week. Sterling strengthened by US afternoon, hitting the day's high of $1.2916.It also rose 0.4 percent to 86.84 pence per euro.
USD/CAD is supported at 1.3463 levels and is trading at 1.3524 levels. It has made session high at 1.3525 and lows at 1.3469 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as prices of oil dipped and the dollar strengthened after encouraging U.S. economic data. Strong data on U.S. private jobs growth and manufacturing activity in May revived traders' appetite for the dollar and reduced the safe-haven appeal of gold and U.S. and German government bonds. The Institute for Supply Management said its barometer of U.S. factory activity edged up to 54.9 last month from 54.8 in April, while ADP reported private payrolls grew by 253,000 last month, beating analysts' median forecast of a 185,000 increase. In commodities, oil prices stabilized near three-week lows following a bigger-than-expected drop in U.S. crude inventories. Government data on Thursday showed U.S. crude inventories dropped by 6.4 million barrels, greater than a forecast 4.4 million-barrel decline. The stock draw offered some respite from worries over a global oversupply in oil. The Canadian dollar was trading at C$1.3515 to the greenback down at 0.11 percent. The currency traded in the range of C$1.3469 to C$1.3516.
AUD/USD is supported around 0.7368 levels and currently trading at 0.7374 levels. It hit session high at 0.7388 and made session lows at 0.7374 levels. The Australian dollar declined sharply against US dollar on Thursday as Australian dollar was dragged down following slump in China's manufacturing data and stronger dollar across the board. The Australian dollar fell to $0.7394, from $0.7431 earlier in the day. A break of $0.7370 would test a trough of $0.7329 touched last month. The Aussie dropped around half a U.S. cent after a disappointing economic report from China, Australia's top export market. A private survey of China's manufacturing activity contracted in May for the first time in nearly a year. That contrasted with an official survey released on Wednesday showing activity remained in expansionary territory. The dollar strengthened after better-than-expected private sector, raising expectations for an interest rate rise and lifting the dollar. U.S. private employers added 253,000 jobs in May, above economists' expectations, a report by a payrolls processor showed on Thursday.
Equities Recap
European shares inched up on Thursday, with blue chips in Milan taking the lead after better than expected Italian economic growth helped markets shrug off political worries.
UK's benchmark FTSE 100 closed up 0.4, the pan-European FTSEurofirst 300 ended the day up by 0.41 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.8 percent.
U.S. stocks were higher on Thursday, with the S&P 500 and Nasdaq touching record highs, after a round of economic data suggested the economy was picking up speed.
Dow Jones closed up by 0.63 percent, S&P 500 ended up 0.74 percent, Nasdaq finished the day up by 0.76 percent.
Treasuries Recap
U.S. short-dated Treasury yields briefly touched at least one-week highs on Thursday after strong U.S. private payroll data marginally boosted expectations for more Federal Reserve interest rate increases in 2017, while caution ahead of Friday's jobs report limited the move.
Benchmark 10-year Treasuries were last down 6/32 in price, with the yield rising to 2.218 percent from 2.198 percent late on Wednesday.
Commodities Recap
Gold prices eased on Thursday as the dollar rallied after a report showed that the U.S. economy created more private-sector jobs than expected in May, further strengthening expectations for an interest rate hike this month.
Spot gold was down 0.04 percent at $1,267.58 per ounce by 3:05 p.m. EDT (1905 GMT), having peaked the previous day at its strongest since April 25 at $1,273.74.U.S. gold futures fell 0.4 percent to settle at $1,270.1.
Oil prices stabilized near three-week lows following a bigger-than-expected drop in U.S. crude inventories.
Brent crude settled down $0.13, or 0.26 percent, at $50.63 a barrel. U.S. crude settled up $0.04, or 0.08 percent, at $48.36 per barrel.
