Market Roundup
• US Sept durable goods orders fall 0.1% v 0.1% forecast, 0.3% previous.
• U.S. business spending tepid, Core durable goods orders -1.2% v 0.3% forecast in Sept.
• U.S. jobless claims 258k v 255k forecast, 261k previous week; 4-wk avg 253k v 252k previous.
• U.S. September pending home sales rise 1.5% v 1.2% forecast, -2.5% previous.
• Atlanta Fed’s GDPNow forecast Q3 GDP 2.1% up from 2.0% Oct 19.
• ECB's Nowotny: Dec meet to decide on QE, what to buy if prolonged, ECB monetary policy has limits.
• Oil rises on OPEC cut comments, draw of U.S. crude at Cushing U.S. crude inventories - 553k bbls.
• ECB’s Mersch: ultra-loose policy may lose effectiveness over time, keeping close eye on effects of low/negative rates.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan All House hold Spending YY* Sep forecast -3%, -4.6%-previous
• 23:30 Japan All house Spending MM* Sep forecast 0.6%, -3.7%- previous
• 23:30 Japan CPI, Core Nationwide YY Sep forecast -0.5%, -0.5%- previous
• 23:30 Japan CPI, Overall Nationwide* Sep -0.5%- previous
• 23:30 Japan CPI Core Tokyo YY* Oct forecast -0.5%, -0.5%- previous
• 23:30 Japan CPI, Overall Tokyo* Oct -0.5%- previous
• 23:30 Japan Jobs/Applicants Ratio Sep forecast 1.37, 1.37- previous
• 23:30 Japan Unemployment Rate Sep forecast 3.1%, 3.1%- previous
• 00:00 Australia HIA New Home Sales m/m Oct 6.1%- previous
• 00:30 Australia PPI QQ* Q3 0.1%- previous
• 00:30 Australia PPI YY* Q3 1%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0851 levels and currently trading at 1.0902 levels. The pair has made session high at 1.0942 and hit lows at 1.0883 levels. The euro declined against US dollar on Thursday as upbeat jobless claims data raised expectations that Federal Reserve will hike rates this December. Data showed initial claims for state unemployment benefits decreasing 3,000 to a seasonally adjusted 258,000 for the week ended Oct. 22.That marked 86 straight weeks that claims have been below the 300,000 threshold, which is normally associated with a strong job market. Bets that the Fed will raise rates have driven the dollar to nine-month highs against a basket of currencies this week and limited gains in gold. The dollar index was about 0.3 percent higher on Thursday. The euro was down 0.06 percent against the dollar at $1.0900, surrendering a 0.3 percent gain that took the currency to a session high of $1.0942 in morning U.S. trading. The euro has fallen about 3 percent this month against the greenback, putting it on track for its worst month in nearly a year.
GBP/USD is supported in the range of 1.2119 and currently trading at 1.2175 levels. It reached session high at 1.2224 and hit low at 1.2148 levels. The Sterling initially rose against the greenback on upbeat UK GDP data, but reversed course losing all the early gains as the pair found short selling interest around 1.2250 levels. British gross domestic product expanded by 0.5 percent in the July-September period, less rapid than the unusually strong growth of 0.7 percent seen in the second quarter but comfortably above a median forecast of 0.3 percent in a poll of economists. The latest data suggested that the economy was holding up pretty well despite the shock Brexit vote, which many had predicted would lead to a sharp downturn in economic activity. Nevertheless, the currency has shed nearly 18 percent against the dollar since the referendum, with losses accelerating in October after Prime Minister Theresa May raised the prospect of a "hard" Brexit.
USD/CAD is supported at 1.3341 levels and is trading at 1.3398 levels. It has made session high at 1.3399 and lows at 1.3351 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as the greenback firmed across the board after the release of US economic data and investors awaited for more clues from upcoming US economic data on whether the Federal Reserve will hike rates this year. The U.S. government will publish its first estimate of third-quarter gross domestic product on Friday, which could influence the Federal Reserve as it mulls whether to hike interest rates this year. Canadian dollar has eased from C$1.30 since Oct. 19, when the Bank of Canada surprised investors by saying it had actively discussed adding more monetary stimulus to speed up the country's economic recovery. The Canadian dollar was last trading at C$1.3387 to the greenback, or 74.70 U.S. cents, slightly weaker than Wednesday's close of $1.3382, or 74.73 U.S. cents.
AUD/USD is supported around 0.7570 levels and currently trading at 0.7589 levels. It hit session high at 0.7626 and made session lows at 0.7581 levels. Australian dollar edged lower against US dollar on Thursday as constant strength in the U.S. dollar and increased expectations that Federal Reserve will raise interest rates in December weighted on Australian dollar. The Australian dollar slipped 0.24 percent to $0.7630. It briefly touched a high of $0.7709 on Wednesday after steady inflation figures only reinforced expectations the Reserve Bank of Australia (RBA) would skip a chance to cut rates at its policy meeting next Tuesday. However, the Aussie was quick to fall back, marking the fifth time since September that it has failed to hold a beachhead at 77 cents. Oil prices edged higher as commitments from Gulf OPEC members to cut production assuaged some lingering doubts in the market about cooperation from other producers.
Equities Recap
European shares steadied at the close on Thursday, with stronger pharmaceutical and banking stocks offsetting a slump in companies like Amec Foster and Berendsen.
UK's benchmark FTSE 100 closed up by 0.3 percent, the pan-European FTSEurofirst 300 ended the day up by 0.03 percent, Germany's Dax ended up by 0.1 percent, France’s CAC finished the day down by 0.1 percent.
U.S. stocks dipped in a choppy session after the latest round of earnings reports, as a decline in the consumer discretionary sector and interest-rate sensitive stocks outweighed gains in healthcare names.
Dow Jones closed down by 0.14 percent, S&P 500 down up by 0.28 percent, Nasdaq finished the day down by 0.62 percent.
Treasuries Recap
U.S. Treasury debt yields climbed to roughly five-month peaks on Thursday, driven by gains in German and British bonds as well as upbeat U.S. jobless claims data that point to another robust non-farm payrolls number next week.
In late morning trading, benchmark 10-year Treasury notes were down22/32 in price to yield 1.867 percent, up from 1.79 percent late on Wednesday. Earlier, 10-year yields hit a five-month high of 1.87 percent.
U.S. 30-year bonds were down more than a point in price to yield 2.628percent, up from Wednesday's 2.537 percent. Thirty-year yields earlier hit a five-month peak of 2.631 percent.
U.S. two-year note yields were at 0.896 percent, up from Wednesday's 0.872 percent. Earlier on Thursday, two-year yields touched five-month highs of 0.896 percent.
Commodities Recap
Gold was little changed on Thursday, pressured by a persistently strong dollar as the market awaits more signs about the timing of an expected U.S. interest rate rise from the Federal Reserve.
Spot gold was up 0.3 percent at $1,270 an ounce by 3:11 p.m. EDT (1911 GMT), while U.S. gold futures ended the session up 0.2 percent at $1,269.50 per ounce. Spot gold has traded in a $16 range over the last week.
Oil settled higher on Thursday, as commitments from Gulf OPEC members to cut production assuaged some lingering doubts in the market about cooperation from other producers.
The international benchmark Brent crude was up 49 cents, or 1 percent, at $50.47 a barrel. U.S. West Texas Intermediate crude gained 54 cents, or 1.1 percent, to $49.72.
