Market Roundup
• US Initial jobless claims 245k v 240k forecast, 255k -previous.
• US Jobless claims 4-wk Avg 242k, 239.75k – previous.
• U.S. services data suggests upward revision to Q1 GDP – Commerce Dept
• ECB expects 2017 inflation at 1.5% vs 1.7% in March.
• Comey will not say if he believed Trump colluded with Russia in open hearing .
• Trump attorney Kasowitz: Trump "never, in form or substance, directed or
suggested that Mr. Comey stop investigating anyone".
• Comey: He took Trump's words as a direction, that he wanted him to drop Flynn probe.
• UK Voting ends at 2100 GMT. First rounds of results are expected by 2300 GMT.
• ECB'S Draghi: Very favorable financing conditions necessary to raise inflation to target.
• Draghi: Very substantial degree of monetary accommodation still needed.
• ECB ready to increase the programme in terms of size and/or duration
If the outlook becomes less favourable, or if financial conditions become inconsistent
Looking Ahead - Economic Data (GMT)
• 01:30 China PPI YY* 5.7% forecast, 6.4% – previous
• 01:30 China CPI YY* 1.5% forecast, 1.2% – previous
• 01:30 Australia Housing finance MM* -1.0% forecast , -0.5% - previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1169 levels and currently trading at 1.1210 levels. The pair has made session high at 1.1228 and hit lows at 1.1195 levels. Euro declined against the dollar on Thursday as the dollar strengthened across the board after European Central Bank kept interest rates on hold and said it would keep money taps fully open and repeated interest rates would stay at record lows. The ECB dropped a reference to further interest rate cuts, while repeating it expects rates to remain at record lows for an extended period and well beyond its asset purchase programme. The ECB decision was largely in line with expectations and many investors were holding fire ahead of UK election. The euro has risen 10 percent against the dollar in the past five months, partly due to the greenback's weakness, but also on the view that rising inflation would prompt the ECB to raise interest rates in early 2018.But reports on Wednesday that the ECB would cut its inflation forecasts have dampened expectations of the bank's language veering towards a pullback of its stimulus programme, also known as quantitative easing (QE), later this year. The euro, which weakened on Wednesday on reports that the ECB would cut its inflation forecasts, was down 0.38 percent to $1.1212, after dipping to $1.1196, its lowest level since May 31.
GBP/USD is supported in the range of 1.2891 levels and currently trading at 1.2941 levels. It reached session high at 1.2954 and dropped to session low at 1.2907 levels. Sterling declined against the U.S. dollar on Thursday as worries about outcome of UK election weighed on Sterling. Sterling, had hit a two-week high of $1.2978 in morning trade in London after polling organisations last surveys, but slipped back later in US session to trade down 0.2 percent at $1.2948 by 1930 GMT. The pound gained as much as 4 percent after Prime Minister Theresa May called a snap election seven weeks ago. Polls initially suggested a landslide win for May's Conservatives that was seen giving the prime minister a stronger hand in Britain's looming negotiations on leaving the European Union. But sterling has since fallen from its highs as the polls have narrowed. A final opinion poll published on Thursday showed Prime Minister Theresa May's Conservatives widening their lead to 8 percentage points from 5 points, suggesting her gamble to call the vote to strengthen her position in Brexit negotiations will pay off.
USD/CAD is supported at 1.3468 levels and is trading at 1.3495 levels. It has made session high at 1.3514 and lows at 1.3482 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday, shaking off lower oil prices, as investors assessed political uncertainty. The U.S. dollar rose against a basket of major currencies after the European Central Bank cut its forecasts for inflation. Oil prices edged lower, with benchmark Brent crude and U.S. crude prices hitting respective one-month lows of $47.56 and $45.20 after an unexpected surge in U.S. inventories and the return of more Nigerian crude aggravated concerns about a worldwide glut. On the data front, New housing prices in Canada jumped 0.8 percent in April from March, the biggest gain in almost a year, Statistics Canada said. The data will undoubtedly fuel worries about a potential housing bubble in Vancouver and Toronto, where prices rose the most in 28 years. In other domestic data, seasonally adjusted housing starts fell to 194,663 units in May from a revised 213,498 in April. The Canadian dollar was trading at C$1.3495 to the greenback or up 0.1 percent. The currency traded in a narrow range of C$1.3486 to C$1.3522.
AUD/USD is supported around 0.7498 levels and currently trading at 0.7545 levels. It hit session high at 0.7548 and made session lows at 0.7528 levels. The Australian dollar dipped slightly against US dollar on Thursday as downbeat Australian economic data and firmer greenback across the board weighed on the Australian dollar. The Australian dollar slipped as low as $0.7522 at one stage, off from a $0.7568 top touched on Wednesday, before steadying at $0.7547.The Aussie's recent uptrend remained intact, with gains of 1.4 percent this month. That compares with drops in March, April and May. The pullback came after data showed Australia's trade surplus shrank 82 percent to A$555 million in April. That was the lowest in six months and far below forecasts of A$1.9 billion. Investors were awaiting the outcome of the UK general election as Britons voted on Thursday in a snap vote predicted to give Prime Minister Theresa May a larger parliamentary majority. Investors view that a clear win would give May more bargaining power in Brexit negotiations, perhaps leading to a deal that's more favourable to British industries and markets.
Equities Recap
European shares wobbled on Thursday after the European Central Bank signalled an end to rate cuts and as Britons voted in a general election, though stronger banks and miners lent support.
UK's benchmark FTSE 100 closed down by 0.1 percent, the pan-European FTSEurofirst 300 provisionally closes down by 0.01 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day flat.
U.S stocks ended higher on Thursday after former FBI Director James Comey's testimony was seen by investors as having no smoking gun that could affect Donald Trump's presidency.
Dow Jones closed down by 0.05 percent, S&P 500 ended up by 0.03 percent, Nasdaq finished the day up by 0.38 percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday as investors looked past the testimony of former Federal Bureau of Investigation chief James Comey, who made no new revelation about the agency's Russian probe, to focus on the Federal Reserve's widely expected interest rate hike next week.
In late trading, U.S. 10-year notes were last down 4/32 in price, with yields at 2.193 percent, compared with 2.180 percent late on Wednesday.
U.S. 30-year bonds fell 10/32 in price, yielding 2.852 percent, compared with Wednesday's 2.837 percent.
Commodities Recap
Gold prices extended losses into a second session on Thursday as the dollar strengthened and as investors viewed the testimony from former U.S. FBI director James Comey as containing no significant surprises.
Spot gold was down 0.7 percent at $1,277.95 an ounce by 4:04 p.m. EDT (2004 GMT). U.S. gold futures for August delivery shed 1.1 percent to settle at $1,279.50.
Oil prices fell again on Thursday, with a sell-off continuing the day after data showed a surprise surge in U.S. crude inventories, and Brent settled at its lowest since Nov. 29, the eve of an OPEC production cut deal.
Brent crude fell 20 cents to settle at $47.87 a barrel, while U.S. crude futures settled down 8 cents to $45.64 a barrel.
