Market Roundup
•US Current Account (Q1) -291.4B, -273.5B forecast, -217.9B previous
•US Initial Jobless Claims 229K,227K forecast, 229K previous
•US Jobless Claims 4-Week Avg 223.50K,218.50K previous
•US Continuing Jobless Claims 1,315K, 1,315K forecast, 1,312K previous
•Canada Manufacturing Sales (MoM) -2.5%,1.7% previous
•Canada Wholesale Sales (MoM) 2.0%, -0.5% previous
• US Jun Services PMI 51.6, 53.5 forecast, 53.4 previous
• US Jun Markit Composite PMI 51.2, 53.6 previous
• US Jun Manufacturing PMI 52.4, 56.0 forecast, 57.0 previous
• US Natural Gas Storage 74B, 65B forecast, 92B previous
Looking Ahead - Economic Data (GMT)
•23:30 Japan Corporate Services Price Index (CSPI) (YoY) 1.7% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro weakened on Thursday as disappointing German and French PMI data confirmed the euro zone economy is struggling to gain traction, prompting traders to trim bets on big interest rate hikes from the European Central Bank.High prices in the euro zone meant demand for manufactured goods fell in June at the fastest rate since May 2020 when the coronavirus pandemic was taking hold, with S&P Global's headline factory Purchasing Managers' Index (PMI) falling to a near two- year low of 52.0 from 54.6. Against the U.S. dollar, the single currency declined 0.5% to $1.0525. Immediate resistance can be seen at 1.0585(38.2%fib),an upside break can trigger rise towards 1.0666(50%fib).On the downside, immediate support is seen at 1.0471(23.6%fib), a break below could take the pair towards 1.0376(Lower BB).
GBP/USD: Sterling trimmed some of its losses on Thursday after better-than-expected UK PMI numbers for June, but the pound remained vulnerable to political risks and recession fears.The PMI's preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a poll of economists, and unchanged from May. Investors were on watch for further signs of political instability as the ruling Conservative Party was contesting two by-elections on Thursday .The pound recovered against the U.S. dollar to $1.2265, having earlier fallen below $1.22. Immediate resistance can be seen at 1.2287(5DMA),an upside break can trigger rise towards 1.2406 (38.2%fib).On the downside, immediate support is seen at 1.2167(23.6%fib), a break below could take the pair towards 1.2032(Lower BB).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Thursday as investors weighed the risk of a global economic slowdown and preliminary domestic data showed factory sales falling in May. The loonie was trading 0.3% lower at 1.2985 to the greenback, or 77.01 U.S. cents, after touching its weakest since Monday at 1.3017. Purchasing managers' data showed a loss of economic momentum in some major European economies. Investors are concerned that interest rate increases to quell decades-high inflation will tip economies into recession. The price of oil , one of Canada's major exports, settled 1.8% lower at $104.27 a barrel as investors weighed the potential impact of slower economic growth on fuel demand. Immediate resistance can be seen at 1.3017 (38.2%fib), an upside break can trigger rise towards 1.3072(12th May high).On the downside, immediate support is seen at 1.2970(9DMA), a break below could take the pair towards 1.2902 (38.2%fib).
USD/JPY: The dollar dipped against Japanese yen on Thursday as investors weighed the risk of hefty interest rate rises tipping economies into recession. Markets have become increasingly concerned that the Fed’s commitment to quelling red-hot inflation will spur a recession. U.S. Treasury yields remained lower on Thursday after Federal Reserve Chair Jerome Powell, in testimony to the U.S. Senate Banking Committee on Wednesday, underlined the central bank's commitment to cutting inflation at all costs and acknowledged a recession was certainly a possibility. The dollar slid 0.17% to 134.87 yen, retreating from a 24-year high of 136.71 reached on Wednesday. Strong resistance can be seen at 136.68(23.6%fib), an upside break can trigger rise towards 138.03(Higher BB).On the downside, immediate support is seen at 134.53(5DMA), a break below could take the pair towards 133.67(38.2%fib).
Equities Recap
European stocks fell and ended notably lower on Thursday, weighed down by fears about the possibility of a recession.
UK's benchmark FTSE 100 closed down by 1.96 percent, Germany's Dax ended down by 1.76 percent, France’s CAC finished the day down by 0.56 percent.
Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession.
Dow Jones closed up by 0.64 percent, S&P 500 closed up by 0.94 percent, Nasdaq settled up by 1.62 % percent.
Treasuries Recap
U.S. Treasury yields fell to two-week lows on Thursday on concerns that the Federal Reserve will cause a recession by aggressively hiking interest rates, and on a growing belief that yields may have topped for the near term even if inflation stays high.
Two-year Treasury yields reached 2.876%, before rising back to 3.012%. They are down from 3.456% on June 14, which was the highest since November 2007.
Commodities Recap
Gold gave up initial gains and edged lower on Thursday as the dollar regained momentum after U.S. Federal Reserve Chairman Jerome Powell doubled down on the central bank’s policy tightening aimed at taming inflation.
Spot gold fell 0.8% to $1,822.64 per ounce by 2:28 p.m.m ET (1828 GMT). U.S. gold futures settled down 0.5% to $1,829.8.
Oil prices dropped by nearly $2 a barrel on Thursday after another round of remarks from Federal Reserve Chair Jerome Powell fanned worries U.S. interest rate hikes would slow economic growth.
Brent crude futures settled at $110.05 a barrel, falling$1.69, or 1.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $104.27 a barrel, down $1.92, or 1.8%.
