Market Roundup
• U.S. jobless claims unchanged at 246k, hold at 43-year low, 4-wk average of claims falls 3.5k.
• US import prices +0.1% v 0.2% forecast, -0.2% previous; on gains in petroleum, food costs.
• US Export prices +0.3% v 0% forecast, -0.8% previous; on motor vehicle parts & consumer goods (ex-autos).
• Fed’s Harker (non-voter/moderate): supports one vote in ’16, 2 in ’17 (will vote in 2017).
• Central bank signals, possible extension of QE, knock German bond yields off one-month peak.
• Risk rallies in NY aft, oil +0.2% shrugs off first US crude build in 6 weeks.
• US equities off worst of day, hovers near flat into close.
• Disappointing China trade data spurs fears recovery may be faltering, adds to worries China to let CCY weaken further.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e -636.8b-previous
• 23:50 Japan Foreign Invest JP Stock w/e 251.7b- previous
• 23:50 Japan Corp Goods Price MM* Sep forecast -0.1%, -0.3%- previous
• 23:50 Japan Corp Goods Price YY* Sep forecast -3.2%, -3.6%- previous
• 01:30 China PPI YY* Sep forecast -0.3%, -0.8%- previous
• 01:30 China CPI YY* Sep forecast 1.6%, 1.3%- previous
• 01:30 China CPI MM* Sep forecast 0.3%, 0.1%- previous
Looking Ahead - Events, Other Releases (GMT)
• 00:30 Australia- Reserve Bank of Australia publishes Financial Stability report
Currency Summaries
EUR/USD is likely to find support at 1.0984 levels and currently trading at 1.1049 levels. The pair has made session high at 1.1055 and hit lows at 1.1020 levels. The euro rose against the dollar on Thursday as dollar halted its rally after soft Chinese trade data spooked a market that is expecting an interest rate increase from the Federal Reserve by the end of the year. Data showed China's exports fell 10 percent in September, far worse than markets had expected, while imports unexpectedly shrank, reviving concerns about the health of the world's second-largest economy. The dollar has gained more than two percent so far this month against a basket of currencies, boosted by U.S. rate hike expectations. Investors have priced in a roughly 70 percent chance the Fed would nudge rates higher at its December policy meeting, a prospect reinforced by Wednesday's release of the last Fed monetary policy meeting minutes. The dollar was last down 0.59 percent against the yen at 103.57 yen .The euro fell briefly below $1.10 for the first time since July, but quickly recovered to trade 0.39 percent higher on the day at $1.1049.
GBP/USD is supported in the range of 1.2180 and currently trading at 1.2248 levels. It reached session high at 1.2270 and hit low at 1.2180 levels. Sterling traded close to a record low in trade-weighted terms on Thursday, kept under heavy pressure by worries that Britain will undergo a "hard Brexit" that will sever ties with Europe's single market. Lawyers leading a bid to force the government to seek parliamentary approval before formally starting the process that will take Britain out of the European Union told the High Court on Thursday that the June 23 referendum had no constitutional foundation, and was merely "advisory. The case, which government ministers have called an attempt to subvert the democratic process, had little impact on the pound on Thursday. The pound has been sold off sharply in the last two weeks on concerns the government will negotiate for an exit that favours tighter immigration controls over free trade, thereby hurting the foreign investment needed to fund Britain's huge current account deficit. The pound traded up 0.1 percent on the day at $1.2254 and down 0.2 percent against the euro at 90.36 pence.
USD/CAD is supported at 1.3180 levels and is trading at 1.3196 levels. It has made session high at 1.3261 and lows at 1.3183 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as U.S. crude oil prices rose and dollar declined on soft Chinese trade data. A sharp decline in China's exports revived concerns about the health of the world's second-biggest economy. The U.S. dollar tumbled from a seven-month high as Chinese concerns spooked a market that is expecting an interest rate increase from the Federal Reserve by the end of the year. Oil prices rebounded after an initial bearish reading from a U.S. Energy Information Administration report soon focused on sharp inventory drawdowns in distillates, including diesel and heating oil, and a decline for gasoline. The Canadian dollar was last trading at C$1.3192 to the greenback, or 75.73 U.S. cents, stronger than Wednesday's close of C$1.3259, or 75.42 U.S. cents.
USD/JPY is supported around 103.20 levels and currently trading at 103.68 levels. It peaked to hit session high at 103.73 and made session lows at 103.41 levels. The U.S. dollar declined sharply against the yen on Thursday on as demand for the safe-haven currency increased after weak Chinese trade data depressed the appetite for the greenback. The unexpected trade figures pointed to weaker Chinese demand both at home and aboard while deepening concerns over the latest depreciation in China's yuan currency, which hit a fresh six-year low against a firming U.S. dollar. Minutes of the Fed's September meeting showed that the Federal Open Market Committee was deeply divided over the timing of the next interest rate hike, as several members agreed the Fed should raise rates in the near term if U.S. data continued to strengthen. The dollar was last down 0.5 percent against the yen at 103.61 yen, after hitting its strongest level since late July. The U.S. currency also fell from 2-1/2 month peaks versus the Swiss franc and last changed hands at 0.9863 franc, down 0.4 percent.
Equities Recap
European shares fell on Thursday as underwhelming Chinese trade data knocked down mining stocks while Standard Life and Aegon slid on broker downgrades.
UK's benchmark FTSE 100 closed down by 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 0.93 percent, Germany's Dax ended down by 1.1 percent, France’s CAC finished the day down by 1.1 percent.
U.S. stocks slipped on Thursday led by falls in financial shares and following weak Chinese economic data but a late-day rebound in oil prices limited the day's decline.
Dow Jones closed down by 0.23 percent, S&P 500 ended down by 0.30 percent, Nasdaq finished the day down by 0.47 percent.
Treasuries Recap
U.S. Treasury prices rose on Thursday as weak Chinese data pushed investors to buy safe-haven government debt after two straight days of selling.
The 10-year note rose 12/32 in price to yield 1.739 percent, down 4 basis points from late Wednesday to a nearly one-week low.
The 30-year bond rose 22/32 in price to yield 2.476 percent, its lowest since Oct. 7.
Commodities Recap
Gold prices edged higher on Thursday as the dollar declined and world shares slipped following renewed worries about China's economy.
Spot gold rose 0.3 percent at $1,258.55 an ounce by 3:17 p.m. EDT (1917 GMT), while U.S. gold futures settled up 0.3 percent at $1,257.60.
Oil prices steadied on Thursday, as a U.S. government report of larger-than-expected draws in diesel and gasoline helped prices rebound from losses incurred when data showed the first crude inventory build in six weeks was much larger than expected.
Brent crude settled up 22 cents, or 0.4 percent, at $52.03 per barrel. U.S. West Texas Intermediate (WTI) crude rose 26 cents, or 0.5 percent, to settle at $50.44.
