Market Roundup
• US Q1 GDP Advance 0.5% vs. forecast 0.7% & prior 1.4%.
• US Q1 GDP Sales Advance 0.9% vs. forecast 0.8% & prior 1.6%.
• US Q1 GDP Deflator Advance 0.7% vs. forecast 0.6% & prior 0.9%.
• US Q1 Core PCE Prices Advance 2.1% vs. forecast 1.9% prior 1.3%.
• US Q1 PCE Prices Advance 0.3% vs. forecast 0.2% & prior 0.3%.
• US Initial Jobless Claims 257k vs. forecast 260k & prior 248k (rev from 247k).
• US Continued Claims 2.13m vs. forecast 2.137m & prior 2.135m (rev from 2.137m).
• BoE’s Carney: Wages growing slowly & over time should pick up- Stockport Express Newspaper.
• BoE’s Carney: In general the economy is performing pretty well.
• BoE’s Carney: Economy appears to be slowing in the very short term, probably due to EU referendum.
• EU Sources: EU would insist on full divorce from UK in case of vote to leave, before negotiating any future relationship.
• Eu’s Moscovici: Lenders have agreed 99% of original reform package with Greece, contingency steps still need work.
• Moscovici: Greek proposals on contingency reforms mechanism deserve to be looked at; EZ ministers might meet on Greece next week or the week after.
Looking Ahead - Economic Data (GMT)
• 23:05 British pound Apr Gfk Consumer Confidence no forecast, prior 0
• 23:45 New Zealand Mar Building Consents no f/c, prior 10.8%
02:00 New Zealand Apr NBNZ Business Outlook no forecast, prior 3.2%
• 02:00 New Zealand Apr NBNZ Own Activity no forecast,, prior 29.4%
• 02:30 Australia Q1 PPI q/q no forecast, prior 0.3%
• 02:30 Australia Q1 PPI y/y no forecast prior 1.9%
• 02:30 Australia Mar Private Sector Credit f/c 0.6%, prior 0.6%
• 02:30 Australia Mar Housing Credit no forecast, prior 0.5%
Looking Ahead - Events, Other Releases (GMT)
• JapanShowa Day holiday
• 03:45 RBA Asst. Gov. Debelle speech (Financial Markets)
Currency Summaries
EUR/USD is likely to find support at 1.1300 levels and currently trading at 1.1350 levels. The pair has made session high at 1.1363 and hit lows at 1.1308 levels. The dollar declined against the euro on Thursday after U.S. GDP came negative, indicating that US economic growth weakened at beginning of the first quarter. The dollar was also hit by the Federal Reserve's decision on Wednesday not to give a strong sign of another rise in rates in June. U.S. economic growth weakened in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports. Gross domestic product increased at a 0.5 percent annual rate, the weakest since the first quarter of 2014, the Labor Department said on Thursday.
GBP/USD is supported in the range of 1.4483 levels and currently trading at 1.4607 levels. It reached session high at 1.4624 and hit low at 1.4537 levels. The British pound rose against US dollar on Thursday to hit 12 week high as the poor U.S. data hammered the greenback lower. The sterling was also boosted by expectations that the Federal Reserve is unlikely to raise interest rates any time soon. Sterling rose 0.3 percent on the day to $1.4598 not far from a 12-week high of $1.4640 struck on Tuesday. The euro was slightly lower at 77.65 pence. The dollar was lower across the board after the Federal Open Market Committee hinted it was in no hurry to tighten monetary policy amid an apparent slowdown in the U.S. economy.
USD/JPY is supported around 107.65 levels and currently trading at 108.12 levels. It hit session high at 108.74 levels and made session lows at 107.84 levels. The dollar declined against Japanese Yen on Thursday to post biggest losses against the yen in more than five years as the Bank of Japan surprised the market by not to further easing its monetary policy. The BOJ decided to hold monetary policy steady on Thursday in the face of soft global demand and a sharp rise in the yen, defying expectations for increased stimulus measures to fight deflation. The dollar was last down more than 3 percent against the yen, at 108.06 yen, near a 10-day low of 107.93 yen touched earlier and ushering in the dollar's biggest daily decline against the yen since mid-March 2011.
USD/CAD is supported at 1.2500 levels and is trading at 1.2541 levels. It has made session high at 1.2593 and lows at 1.2511 levels. The Canadian dollar rallied against US dollar on Thursday as oil prices bounced 2 percent and the dollar was broadly sold across the board after weak US GDP data. Oil prices edged higher on Thursday, holding near their strongest levels for 2016. U.S. crude prices were up 0.22 percent at $45.43 a barrel. The U.S. dollar weakened against a basket of currencies after a lack of fresh stimulus from the Bank of Japan sent the yen soaring and world equity markets into the red. On Wednesday, the U.S. Federal Reserve signaled it, too, was hitting the policy pause button. The currency's weakest level was C$1.2596, while it touched its strongest since July 1 last year at C$1.2510.
Equities Recap
European shares were mixed on Thursday, with initial weakness after the Bank of Japan unexpectedly held off from expanding monetary stimulus later counteracted by strength on Wall Street.
UK's benchmark FTSE 100 closed down by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.58 percent, Germany's Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.5 percent.
U.S. stocks slid on Thursday afternoon as a midday recovery led by Facebook's earnings coupled with news of promising M&A deals faded and the Bank of Japan's surprising call to cap monetary stimulus continued to rattle investors.
Dow Jones closed down by 0.14 percent, S&P 500 ended down by 0.18 percent, Nasdaq finished the day down by 0.22 percent.
Treasuries Recap
Longer-dated U.S. Treasury prices fell on Thursday as inflation grew faster than expected in the first quarter to above the Federal Reserve's 2 percent goal, eroding the appeal of holding long-term assets.
The Benchmark 10-year Treasury notes were down 2/32 in price for a yield of 1.869 percent, up 1 basis point from Wednesday. The 10-year yield was still below a near five-week high of 1.941 percent set on Tuesday.
The 30-year yield rose 2.5 basis points to 2.725 percent, while the two-year yield fell 1.6 basis points to 0.825 percent.
Commodities Recap
Oil markets jumped 2 percent on Thursday, hitting 2016 highs for a third straight day as a weaker dollar had investors shrugging off record high U.S. crude inventories and relentless pumping by major producers.
Brent settled up 96 cents at $48.14 a barrel, after hitting a 2016 high of $48.19.
U.S. crude finished up 70 cents at $46.03, after a year-to-date peak at $46.14.
Gold rose more than 1 percent on Thursday as the Bank of Japan held off from expanding monetary stimulus, boosting the yen versus the U.S. dollar, and after the Federal Reserve signaled it was in no rush to tighten monetary policy.
Spot gold was up 1.6 percent at $1,266.50 an ounce at 2:43 p.m. EDT (1843 GMT), a one-week high, while U.S. gold futures for May delivery settled up 1.3 percent at $1,265.50 an ounce.
