Market Roundup
- U.S. bonds rally on stock losses, economic worries, hold gains on as forecast US durables.
- U.S. Aug single-family home sales rise 5.7 pct; improve risk a bit.
- BRL moves off all-time high, Tombini hints at using reserves to stabilize BRL, Brazil Treasury announces daily sale, repurchase auctions of fixed rate NTN-F notes.
- Brazil's Tombini: Central bank to guarantee efficient FX market.
- ECB's Praet: need to study effects of QE.
- BOE's Broadbent not close to backing rate rise, economists see BoE on track for Feb hike.
- Norway central bank lowers rates to record low 0.75 pct from 1.00 pct, eyes more cuts.
Looking Ahead - Economic Data (GMT)
- 23:30 Japan CPI, Core Nationwide YY Aug forecast -0.1%, 0%-previous
- 23:30 Japan CPI, Overall Nationwide* Aug 0.2%-previous
- 23:30 Japan CPI Core Tokyo YY* Sep forecast -0.2%, -0.1%-previous
- 23:30 Japan CPI, Overall Tokyo* Sep 0.1%-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1150 levels and currently trading at 1.1224 levels. The pair has made session high at 1.1297 and hit lows at 1.1212 levels. The dollar slipped against the euro on Thursday after worries about global growth led traders to sell riskier assets and favor lower-yielding currencies. Concerns that China and other emerging markets could face more economic weakness led traders to sell the dollar and riskier assets such as U.S. stocks and buy back currencies such as the euro and yen, which are cheap to own since the European Central Bank and Bank of Japan are keeping rates low through stimulus measures. That dynamic weakened the dollar, since the U.S. Federal Reserve's intent to tighten monetary policy by raising rates has made it less favorable as a funding currency. The euro was last up 0.33 percent against the dollar at $1.12230. To the upside, immediate resistance can be seen at 1.1225. To the downside, immediate support level is located at 1.1150 levels.
GBP/USD is supported in the range of 1.5197 levels and currently trading at 1.5244 levels. It reached session high at 1.5287 and dropped to session low at 1.5198 levels. Sterling slipped to its weakest in 3-1/2 months against a trade-weighted basket of currencies on Thursday as investors bet the Bank of England would wait until the second half of next year to raise interest rates. The BoE is expected to come second only to the U.S. Federal Reserve among major central banks in raising rates from their current historic lows. But with UK inflation stuck at zero, and with the Fed keeping rates on hold last week and cutting its growth forecasts, the BoE is in no hurry to proceed. The pound retreated 0.1 percent against the dollar to $1.5222. The main focus in currency markets on Thursday was the Norwegian crown. It tumbled after Norway's central bank surprised markets by cutting interest rates for the second time in four months. Sterling gained 2 percent against the currency to a three-week high of 12.9154 crowns. To the upside, immediate resistance can be seen at 1.5260. To the downside, immediate support level is located at 1.5200 levels.
USD/JPY is supported around 119.60 levels and currently trading at 120.19 levels. It peaked to hit session high at 120.08 and made session lows at 119.21 levels. The dollar edged lower against Japanese yen on Thursday after traders worried about global growth which led them sell riskier assets and favor lower-yielding currencies. The dollar slipped to a nearly one-week low against the Japanese yen at 119.255 yen and fell against the Swiss franc. The dollar remained near a 13-year high against the Norwegian crown after the Norwegian central bank unexpectedly cut interest rates to record lows to boost growth in an economy struggling with the falling price of oil, its main export. On the data front, Durable goods overall fell 2.0 percent in August, in line with forecasts and held back by a sharp decline in orders for civilian aircraft. Excluding transportation, orders were flat. Report from the Labor Department showed initial claims for state unemployment benefits rose by 3,000 to a seasonally adjusted 267,000 for the week ended Sept. 19. Analysts had expected new claims to rise more. To the upside, immediate resistance can be seen at 120.40. To the downside, immediate support level is located at 120.10 levels.
USD/CAD is supported at 1.3280 levels and is trading at 1.3310 levels. It has made session high at 1.3414 and lows at 1.3295 levels. The Canadian dollar tumbled on Thursday to its weakest against the U.S. dollar since June 2004, as concerns about global growth dominated markets following rate cuts in Norway and loonie, which broke through C$1.3400 levels during the session, echoed losses among other commodities-linked currencies. Norway and Taiwan's central banks both cut their benchmark interest rate on Thursday. Taiwan's move, the first since 2009, comes as it faces a slowdown in China and weaker global demand prospects for its technology exports. That underscored concerns about global growth and concerns about oil prices and neither one of those is favorable for Canada. The Canadian dollar was trading at C$1.3373 to the greenback, or 74.78 U.S. cents. The currency, which broke through a key barrier level on Wednesday following slumping oil prices and disappointing domestic retail sales data, weakened to as low as C$1.3417. To the upside, immediate resistance can be seen at 1.3380. To the downside, immediate support level is located at 1.3314 levels.
Equities Recap
European shares closed lower on Thursday as investors fretted over the risks to the region's economic recovery from an auto-emissions scandal at Volkswagen.
UK's benchmark FTSE 100 closed down by 2.17 percent, the pan-European FTSEurofirst 300 ended the day down by 2.15 percent, Germany's Dax ended down by 2.1 percent, France's CAC finished the day down by 2.17 percent.
U.S. stock stocks fell on Thursday, weighed by tumbling healthcare stocks and shares of market heavyweight Caterpillar after a cut in its sales forecast added to worries over sluggish global growth.Dow Jones closed down by 0.45 percent, S&P 500 ended down by 0.33 percent, Nasdaq finished the day down 0.37 percent.
Treasuries Recap
U.S. Treasuries prices rose on Thursday, with benchmark yields hitting four-week lows as losses on Wall Street and anxiety over a weakening global economy fueled demand for lower-risk government debt.
The Benchmark 10-year Treasuries were 5/32 higher in price for a yield of 2.125 percent, down 2 basis points from late on Wednesday. The 10-year yield earlier touched 2.081 percent; it's lowest since Aug. 26.
The 30-year bond was up 19/32 to yield 2.910 percent, down 3 basis points on the day. At one point, the 30-year bond was up more than a point in price with its yield hitting 2.865 percent, the lowest in 2-1/2 weeks.
Commodities Recap
Oil prices rose as much as 1 percent on Thursday, boosted by inventory draws at the U.S. crude futures' delivery hub although gains were capped by tumbling equity prices on Wall Street.
U.S. crude settled up 43 cents, or almost 1 percent, at $44.91 a barrel. It rose 69 cents at the session peak and fell 77 cents at the low.
Brent settled up 42 cents, or 0.9 percent, at $48. is down more than 25 percent so far this quarter.
Spot gold rallied more than 2 percent on Thursday for the biggest one day gain in almost 8-months as weak US dollar sparked short covering while automotive demand woes lingered.
Spot gold prices were up by 2 percent at $ 1.153.4 per ounce, while US gold futures contract for December delivery settled up 2 percent at @1.153.8 an ounce.
