Market Roundup
• US weekly jobless claims 260k, +13k , 4-week average of claims rises 2.25k.
• Philly Fed Oct business conditions index +9.7 vs Sept +12.8, new orders 16.3 highest since Nov ’14.
• Philly Fed 6-month capital expenditures outlook Oct 21.2 vs Sep 8.6.
• US Sept existing homes sales rise 3.2%.
• ECB, keeps rates steady, stays quiet about future policy, QE extension priced in for Dec; Tapering not discussed – Draghi.
• DXY hits 7-mos high, EUR to 4-mos low after ECB meeting, pressuring oil and US stocks.
• GBP falls as Tusk says there will be no Brexit negotiation at EU summit.
• BIS to hear initial verdict on sterling crash in November.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• 06:35 Japan BoJ Gov Kuroda delivers brief remarks at annual meeting of Japan's trust associations.
• 08:00 Japan -Bank of Japan Governor Haruhiko Kuroda speaks at a seminar hosted by the Economist.
Currency Summaries
EUR/USD is likely to find support at 1.0900 levels and currently trading at 1.0928 levels. The pair has made session high at 1.0953 and hit lows at 1.0915 levels. The euro declined hit four-month low against the dollar on Thursday as the greenback rose after the European Central Bank President left the door open to more monetary stimulus. The ECB left its ultra-loose monetary policy unchanged but President Mario Draghi kept a wide range of options open for further stimulus in December, shooting down any talk of tapering its 1.7 trillion euros asset-buying program. The greenback also found support hawkish comments by New York Fed President William Dudley late on Wednesday. On the data front, U.S. data on Thursday showed that U.S. home resales surged in September after two straight months of declines as first-time buyers stepped into the market, pointing to underlying momentum in the economy. The euro dropped 0.45 percent against the U.S. dollar to $1.0925, after earlier falling as low as $1.0916, the lowest since June 24.
GBP/USD is supported in the range of 1.2200 and currently trading at 1.2251 levels. It reached session high at 1.2271 and hit low at 1.2208 levels. The British pound declined against the dollar on Thursday as the pair was weighted down after the president of the European Council said EU leaders would not engage in negotiations on Britain's exit from the bloc at Prime Minister Theresa May's first summit in Brussels. Donald Tusk said he expected May to brief the other 27 leaders later, but had ruled out negotiations until May formally launches the Brexit process. He rejected suggestions that the new premier would face a hostile reception and said talks would remain cordial. Sterling hit a two-day low of $1.2213 after the comments, down 0.6 percent on the day, before recovering to about $1.2240. That still left it down 0.4 percent on the day. Earlier, data showing British retail sales recorded their strongest quarter of growth since late 2014 in the three months to September, with consumer sentiment remaining firm since June's Brexit vote, had little impact on the currency.
USD/CAD is supported at 1.3156 levels and is trading at 1.3230 levels. It has made session high at 1.3233 and lows at 1.3191 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as recent dovish Bank of Canada's statement and falling U.S. crude oil prices weighted on the loonie. Losses for the loonie came one day after Bank of Canada policymakers said they had considered adding more monetary stimulus and that export weakness could be harder to turn around than they had thought. Crude oil prices fell just under 2.5 percent, also weighed by profit taking. A strong rally on Wednesday had taken prices to their highest in 15 months in the wake of unexpected inventory drawdowns. The Canadian dollar was last trading at C$1.3227 to the greenback, or 75.87 U.S. cents, weaker than Wednesday's close of C$1.3127, or 76.18 U.S. cents. Canada's inflation report for September is due on Friday. Annual inflation is expected to pick up to 1.5 percent after slipping towards the lower end of the Bank of Canada's targeted range a month earlier.
AUD/USD is supported around 0.7596 levels and currently trading at 0.7622 levels. It hit session high at 0.7637 and made session lows at 0.7620 levels. The Australian dollar slipped lower against US dollar on Thursday as the pair was weighted down after weak employment report showed a big slide in full-time jobs which added to the risk of a further cut in interest rates by Reserve Bank of Australia. Just this week Reserve Bank of Australia (RBA) Governor Philip Lowe emphasized that rising underemployment and weak hours worked meant there was a lot more slack in the labour market than the unemployment rate on its own might suggest. The Australian dollar snapped a six-day winning streak to trade at $0.7627. It slipped 0.5 percent after earlier rising to $0.7735, its highest level since Sept.8. The U.S. dollar gained further after publication of a stronger-than-expected U.S. existing home sales report. Traders are closely watching U.S. data for clues about when the U.S. Federal Reserve will raise interest rates, heavily tipped by a number of Fed policymakers for December. The market also eyed Wednesday night's final U.S. presidential debate, which was judged not to have improved Donald Trump's election hopes and which could potentially weigh on the Australian dollar.
Equities Recap
European shares rose on Thursday to their highest level in two weeks, helped by weakness in the euro and further boosted by a rally in bank sector stocks.
UK's benchmark FTSE 100 closed down by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.19 percent, Germany's Dax ended up by 0.5 percent, France’s CAC finished the day up by 0.4 percent.
U.S. stocks ended a choppy session on Thursday with a slight decline as investors digested the latest round of earnings, with a sharp drop in telecoms offset by gains in healthcare.
Dow Jones closed down by 0.22 percent, S&P 500 ended down by 0.15 percent, Nasdaq finished the day down by 0.09 percent.
Treasuries Recap
Longer-dated U.S. Treasury yields fell on Thursday after European Central Bank President Mario Draghi said there was no discussion at the ECB's latest policy meeting on possible changes to its 1 trillion-plus euro bond purchase program.
In light, choppy trading, benchmark 10-year Treasury notes were unchanged in price to yield 1.752 percent, while the 30-year bond was up 8/32 in price, yielding 2.501 percent, which was down more than 1 basis point from Wednesday.
Commodities Recap
Gold eased slightly on Thursday after three days of gains as the U.S. dollar rose and the European Central Bank left interest rates unchanged, maintaining the parameters of its 1.74 trillion euros ($1.95 trillion) asset buying scheme.
Spot gold was down 0.2 percent at $1,266.4 an ounce by 2:46 p.m. EDT (1846 GMT), after tapping a two-week high at $1,273.82. U.S. December gold futures settled down 0.2 percent at $1,267.50.
Oil prices settled down more than 2 percent on Thursday, as a resurgent dollar encouraged players to take profit on the previous day's rally that sent U.S. crude to 15-month highs.
Benchmark Brent crude for December delivery settled down $1.29, or 2.5 percent, at $51.38 per barrel. WTI's December contract , which will be front-month from Friday, slid $1.19 to settle at $50.63.
