Market Roundup
•U.S. weekly jobless claims rise
• US Continuing Jobless Claims 1,379K,1,400K forecast, 1,403K previous
• US Jobless Claims 4-Week Avg. 216.75K, 224.00K previous
• US Initial Jobless Claims 213K, 218K forecast,213K previous
• Canada Aug New Housing Price Index (MoM) 0.1%, 0.1% previous
• US Current Account (Q2) -251.1B, -260.6B forecast, -291.4B previous
• US Aug Leading Index (MoM) -0.3%,-0.1% forecast, -0.4% previous
• US Natural Gas Storage 103B, 93B forecast,77B previous
• US KC Fed Manufacturing Index2, -9 previous
• US Sep KC Fed Composite Index 1, 3 previous
Looking Ahead - Economic Data (GMT)
• No economic Data ahead
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro recovered from 20 year low versus the dollar on Thursday as investors digested rate hike from the U.S. Federal Reserve, Swiss central bank, and Bank of England. U.S. Federal Reserve raised rates by 75 basis points and flagged a steeper than expected tightening path at its upcoming meetings. The Fed foresees its policy rate rising at a faster pace and to a higher level than previously expected, the economy slowing to a crawl, and unemployment rising to a degree historically associated with recessions. Other central banks are continuing to raise rates, with the Bank of England on Thursday increasing its key interest rate to 2.25% as expected. The European common currency rose around 0.05% to 0.9838, its highest since Sep 6th, and well up from a 20-year trough of $0.9862 hit last week. Immediate resistance can be seen at 0.9940(38.2%fib), an upside break can trigger rise towards 0.9970(9DMA).On the downside, immediate support is seen at 0.9812 (23.6%fib), a break below could take the pair towards 0.9800(Psychological level).
GBP/USD: Sterling dipped against dollar on Thursday after the Bank of England raised its key interest rate by less than the money market was predicting. The BoE raised its benchmark rate by 50 basis points (bps) to 2.25% as it targets consumer inflation near 40-year highs, and vowed to respond forcefully, as necessary to rising prices, despite the British economy entering recession.While economists polled were expecting a 50 bps rise, the money market saw a strong possibility of 75 bps.The pound eased back from earlier highs after the BoE's decision, trading down 0.4% against the dollar at $1.1255 Immediate resistance can be seen at 1.1377(5DMA), an upside break can trigger rise towards 1.1492(38.2%fib).On the downside, immediate support is seen at 1.1242(23.6%fib),a break below could take the pair towards 1.1221(Lower BB).
USD/CAD : The Canadian dollar weakened to its lowest level in more than two years against its U.S. counterpart on Thursday as a wave of central bank interest rate hikes added to concern about the global economic outlook. Central banks, including the Bank of England, continued raising interest rates in a fight against inflation that could trigger a recession. It follows the Federal Reserve's move on Wednesday to hike by three-quarters of a percentage point and signal further large increases to come. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to shifts in investor sentiment. The Canadian dollar was trading 0.2% lower at 1.3490 to the greenback, or 74.13 U.S. cents, after touching its weakest intraday level since July 2020 at 1.3544.Immediate resistance can be seen at 1.3517 (23.6%fib), an upside break can trigger rise towards 1.3541 (Higher BB).On the downside, immediate support is seen at 1.3415 (38.2%fib), a break below could take the pair towards 1.3328(50%fib).
USD/JPY: The dollar declined against yen on Thursday after Japanese authorities intervened in the foreign exchange market to shore up the battered currency for the first time since 1998, although trading was choppy. Confirmation of the intervention came hours after the BOJ decided to maintain low interest rates to support the country's fragile economic recovery.BOJ Governor Haruhiko Kuroda told reporters the central bank could hold off on hiking rates or changing its dovish policy guidance for years. The dollar was last down at 142.39 yen . It hit a low of 140.31 after the intervention, having earlier reached a fresh 24-year peak of 145.9 yen. Strong resistance can be seen at 143.21(23.6%fib), an upside break can trigger rise towards 145.81(Daily high).On the downside, immediate support is seen at 140.50(38.2%fib), a break below could take the pair towards 138.33(50%fib).
Equities Recap
European shares slumped 1.8% on Thursday, as recession worries heightened after the U.S. Federal Reserve delivered another jumbo-sized interest rate hike and signalled more in its fight against stubbornly high inflation.
UK's benchmark FTSE 100 closed down by 1.08 percent, Germany's Dax ended down by 1.84 percent, France’s CAC finished the day down by 1.87 percent.
Major Wall Street indexes ended lower on Thursday, falling for a third straight session as investors reacted to the Federal Reserve's latest aggressive move to rein in inflation by selling growth stocks, including technology companies.
Dow Jones closed down by 0.35% percent, S&P 500 closed down by 0.84% percent, Nasdaq settled down by 1.37 % percent.
Treasuries Recap
Benchmark U.S. Treasury yields hit an 11-year high on Thursday and a key part of the yield curve was the most inverted in at least two decades as investors positioned for the Federal Reserve to continue its hawkish stance toward hiking rates as it battles persistently high inflation
Two-year Treasury yields were last 4.105%, after earlier reaching 4.132%, the highest since October 2007. Benchmark 10-year U.S. Treasury yields reached 3.662%, the highest since February 2011.
Commodities Recap
Gold prices edged lower in choppy trading on Thursday, pressured by a stronger dollar and higher Treasury yields, while the U.S. Federal Reserve’s hawkish policy stance clouded the outlook for the non-yielding bullion.
Spot gold was down 0.2% at $1,671.20 per ounce by 1:46 p.m. EDT (1746 GMT), after shedding more than 1% earlier in the session.U.S. gold futures settled 0.3% higher at $1,681.10.
Oil settled nearly 1% higher on Thursday, paring earlier gains as the market focused on Russian oil supply concerns, rebounding Chinese demand, and as the Bank of England hiked interest rates less than some had expected.
Brent crude futures settled up 63 cents, or 0.7%, at $90.46 after rising by more than $2 earlier in the session.
U.S. West Texas Intermediate (WTI) crude settled up 55 cents, or 0.7%, at $83.49, after rising by more than $3 earlier in the session.
