- UK January BOE bank rate stays flat at 0.5 % (forecast 0.50 %) vs previous 0.50 %.
- UK January BOE QE total GBP stays flat at 375.0 bln GBP vs previous 375 bln GBP.
- USD/CNH one way to 6.6190 vs 6.5601 Wednesday's close.
- USD/HKD 4-yearr high of 7.7810-HKMA sees no need to change ccy system.
- EUR/GBP at 12-month high 0.7596 Brexit continues its GBP negative influence.
- Germany Full-year GDP 1.7% vs 1.6% previous and 1.6% expected.
- Sweden December Core CPI +0.9% y/y vs 1.0% previous, 1.0% expected.
- BoJ Gov Kuroda - Markets somewhat volatile, monitoring moves closely.
- BoJ Koroda - will do whatever it takes to achieve 2% inflation target.
- China SAFE - Not limiting FX sales to individuals.
- China stock exchange to strictly monitor sales by major shareholders.
- Fitch - House price growth to slow significantly in Australia, NZ.
- (0830 ET/1330 GMT) New U.S. applications for jobless benefits likely dropped to 275,000 last week from 277,000 the prior week, suggesting the labor market retained its momentum early in the year.
- (0830 ET/1330 GMT) US import prices likely slipped 1.4 percent in December after dropping 0.4 percent in the prior month.
- (0830 ET/1330 GMT) New home prices in Canada are expected to have risen 0.2 percent in November in comparison to a 0.3 percent rise in the prior month, according to a suvey of economists.
- (0900 ET/1400 GMT) Mexico release October's gross fixed investment data, the measure of spending on machinery, equipment and new construction. The metric rose 1.4 percent in September, compared with August, after falling for the previous two months.
- (1030 ET/1530 GMT) EIA's Natural Gas Storage Change for the week ending Jan 8 is expected to be at -152B vs -113B.
- (1600 ET/2100 GMT) Chile's central bank meets to decide benchmark rate. Market expects a rate hold at 3.50 percent, after the bank hiked the rate by 25 basis points at its December monetary policy meeting.
Key Events Ahead
- (0730 ET/1230 GMT) European Central Bank publishes minutes of its December policy meeting.
- (0830 ET/1330 GMT) Federal Reserve Bank of St. Louis President James Bullard delivers a presentation on U.S. economic and monetary policy before the Economic Club of Memphis at the 2016 Regional Economic Briefing and Breakfast.
- (0840 ET/1340 GMT) Federal Reserve Bank of Atlanta President Dennis Lockhart gives welcome remarks before the 2016 Operation Hope Global Forum Annual Meeting in Atlanta.
- (1630 ET/2130 GMT) Treasury Secretary Jack Lew speaks.
FX Recap
USD: Undermined by lower U.S. yields, the dollar lost ground against the yen, though it had clawed most of it back and was last buying 117.90 yen.
EUR/USD: The euro rose half a percent to $1.0928 on a Reuters report that European Central Bank policy makers are sceptical about the need for further policy action in the near term. Pair jumped nearly 100 pips from daily lows to trade around $1.0930. Germany's economy continued to grow on an annual basis last year, as the price adjusted GDP increased by 1.7% according to a report released by Federal Statistics Office (Destatis) on Thursday. Industrial output in Italy trashed 0.5% on a monthly basis during the eleventh month of the year, the national statistics institute Istat said. It made intraday high at 1.0943 and low at 1.0854 levels. The minor resistance is around 1.0950 and any break above 1.09500 will take the pair to next level 1.1000. On the lower side major support is around 1.0800 and break below targets 1.0710/1.0670 level.
USD/JPY: Japanese machinery orders fell sharply in November after rising at a solid pace the month before, signalling firms pared back investment levels towards the end of the year. Machinery orders, excluding ships and utility items, plunged 14.4% month-on-month in November, according to Japan's Cabinet Office, after surging 10.7% in October. Pair made intraday high at 118.17 and low at 117.29 levels. Major resistance is seen at 120.67 and support is seen at 116.54 levels.
GBP/USD: The Bank of England left monetary policy unchanged, keeping the main rate at 0.5% and the QE amount at £375 billion annually. Only one Monetary Policy Member voted for a rate hike, as was broadly expected. Sterling did not move dramatically after the release and the pair remained oscillating around the $1.44 mark. Sterling rose to $1.4410 after BoE minutes, from around $1.4386 beforehand. It hit an 11-month low against the euro of 75.77 pence. Pair made intraday high at 1.4424 and low at 1.4360 levels. Initial support is seen at 1.4351 and resistance is seen around 1.4750 levels.
NZD/USD: The New Zealand dollar was down 0.5 percent at $0.6483 as markets remained risk-averse. It fell as far as $0.6468, it's weakest since November and a break under $0.6430 would take it to three-month lows. It made intraday high at 0.6515 and low at 0.6418 levels. Initial support is seen at 0.6383 and resistance at 0.6896 levels.
AUD/USD: The Australian dollar dropped to multi-month lows as a selloff in commodities and equities revived worries about global growth. It fell to $0.6920, its weakest since September and a break below $0.6892 will take it to lows not seen since early 2009. Australian labour statistics on Thursday showed the unemployment rate holding at 5.8% in December, the equal lowest in a year-and-a-half, with net job growth sliding by 1,000. Analysts expected net 10,000 jobs lost and the unemployment rate to notch back up to 5.9%. Pair made intraday high at 0.6973 levels and low around 0.6910 levels. Initial support is seen at 0.6907and resistance at 0.7320 levels.
Equities Recap
Stocks and commodity linked currencies dropped on Thursday as oil prices plunged this time to below $30 a barrel.
MSCI's 46-country All World stock index plunged for the 10th day in the last 11 as Europe's main markets fell 1.8-2.5 percent following heavy overnight selling in Asia.
Japan's Nikkei shed 2.7 percent, as downbeat domestic data added to the gloom. Shanghai Composite Index and the CSI300 index both closed up 2 percent.
Commodities Recap
Oil prices steadied but were near 12-year lows on the prospect of Iran unleashing its oil on an oversupplied market and few signs of improving demand in a fragile global economy. Brent crude dropped as far as $29.73 a barrel, the lowest since February 2004, before steadying at $30.51 a barrel by 1018 GMT. West Texas Intermediate rose 27 cents at $30.75 a barrel.
Gold steadied as buyers cashed in some of the previous session's gains, but the metal remained underpinned by positive pressure from a drop in stock markets and dollar weakness. Spot gold was $1,092.10 an ounce at 1020 GMT, little changed from $1,093.11 late on Wednesday, while U.S. gold futures for February delivery were up $4.80 an ounce at $1,091.90.
Treasuries Recap
The benchmark 10-year U.S. Treasury yield dropped to its lowest levels since late October as investors sought safety in government debt. It last stood at 2.0734 percent, while 10-year German Bund yields fell back below 0.5 percent.
The yield on the benchmark 10-year Japanese government bond hit a fresh record low of 0.190 percent.
UK 5-year government bond yields fell to 11-month low of 1.060.
Australian government bond futures hovered near multi-week peaks in a bullish flattening of the curve, with the 3-year bond contract up 4 ticks at 98.060. The 10-year contract rose 7.5 ticks to 97.3150, while the 20-year contract gained 6.5 ticks to 96.8200. New Zealand government bonds yields were lower around 5 basis points.
