Market Roundup
- Fed holds rates steady in nod to global economic weakness, USD falls, USTs rally.
- Fed's Yellen: recent global developments likely to put downward pressure on inflation.
- Fed's Yellen: no significant changes in committee's outlook for inflation.
- Fed's Yellen: net export drag reflects appreciation of USD, recent drop in oil rise of USD transitory.
- OIS rates see 67% chance of Fed hike in Dec, 80% chance of hike in Jan '16.
- US Initial Jobless Claims 264k, forecast- 275k, 275k-previous, fall to 8-week low.
- U.S. current account narrows sharply in second quarter, -109.7b v -111.3b forecast.
- Philly Fed factory activity contracts unexpectedly in September, -6 vs 6 forecast.
- SNB signals negative rates for foreseeable future, leaves 3-mos Libor target unchanged.
- Brazil president may roll back proposed spending cuts, taxes (Estado de S. Paulo).
- Copper drops from peak after Chile mines unscathed by quake.
Looking Ahead - Economic Data (GMT)
- 01:30 China China House Prices YY Aug -3.7%-previous
Looking Ahead - Events, Other Releases (GMT)
- 23:50 Japan BOJ Minutes for Aug. 6-7 Meeting
Currency Summaries
EUR/USD is likely to find support at 1.1142 levels and currently trading at 1.1425 levels. The pair has made session high at 1.1440and hit lows at 1.1414 levels. The dollar slumped against euro on Thursday after the U.S. Federal Reserve held interest rates steady amid a slew of global challenges, and lowered its long-term outlook for the American economy. The U.S. currency touched three-week lows versus the euro and two-week troughs against the Swiss franc, with the greenback's outlook darkening with revisions in the interest rate trajectory for the world's largest economy. Fresh economic projections showed 13 of 17 Fed policymakers foresee raising rates at least once in 2015, down from 15 at the last meeting in June. Four policymakers now believe rates should not be raised until at least 2016, compared with two who felt that way in June. In midafternoon trading, the euro rose to three-week highs of $1.1420 and was last at $1.1387, up 0.9 percent. To the upside, immediate resistance can be seen at 1.1441. To the downside, immediate support level is located at 1.1412 levels.
GBP/USD is supported in the range of 1.5570 levels and currently trading at 1.5578 levels. It reached session high at 1.5621 and dropped to session low at 1.5570 levels. Sterling rose to its highest in almost month against the dollar on Thursday after the Federal Reserve decided to hold U.S. interest rates near zero on concerns about global weakness but left the door open for a rate increase later this year. The U.S. central bank's decision was a nod to concerns about a weak world economy, saying that an array of global risks and other factors had convinced it to delay what would have been the first rate hike in nearly a decade. It left open the possibility of a modest policy tightening later this year. Earlier in the in European session retail sales data as released by Britain's Office for National Statistics which rose 0.2 percent on the month to grow 3.7 percent on the year, compared with forecasts of 3.8 percent. Sterling hit $1.5621 the highest since late August, before easing towards $1.5580, after the U.S. Federal Reserve announced interest rates. To the upside, immediate resistance can be seen at 1.5621. To the downside, immediate support level is located at 1.5570 levels.
USD/JPY is supported around 119.62 levels and currently trading at 120.13 levels. It peaked to hit session high at 120.33 and made session lows at 119.78 levels. The dollar slipped against Japanese yen on Thursday, after The U.S. Federal Reserve kept interest rates unchanged on Thursday U.S. central bank said global risks and other factors had convinced it to delay what would have been the first rate hike in nearly a decade but it left open the possibility of a modest policy tightening later this year. Investors' focus turned to the next Fed meeting on Oct. 27-28 and they were still left to figure out the timing for the Fed's first benchmark rate increase since 2006. The dollar fell against a basket of currencies after the release of the statement, trading about 1 percent lower against the euro. Stocks initially edged higher before turning lower in choppy trade, while prices for U.S. Treasuries rose. Against the yen, the dollar fell 0.5 percent to 119.92. To the upside, immediate resistance can be seen at 120.28. To the downside, immediate support level is located at 119.62 levels.
USD/CAD is supported at 1.3150 levels and is trading at 1.3174 levels. It has made session high at 1.3250 and lows at 1.3159 levels. The Canadian dollar surged to its strongest in four weeks before giving up the gains versus its US counterpart on Thursday after Federal Reserve held interest rates steady. In what amounted to a tactical retreat ,the us central bank said an array of global risks and other factors had convinced it to delay what would have been the first hike in nearly a decade one point Canadian dollar hit C$1.3073,its strongest since Aug 21,while its weakest level was C$1.3205. It ended the North American session trading hands at C$1. markets had been split on whether the fed had seen enough recovery to lift rates for the first time since 2006. To the upside, immediate resistance can be seen at 1.3187. To the downside, immediate support level is located at 1.3160 levels.
Equities Recap
European shares closed little changed on Thursday with many investors refraining from taking up big positions as they awaited a U.S. Federal Reserve decision on whether to lift interest rates for the first time since 2006.
UK's benchmark FTSE 100 closed down by 0.46 percent, the pan-European FTSEurofirst 300 ended the day down by 0.05 percent, Germany's Dax ended up by 0.19 percent, France's CAC finished the day up by 0.48 percent.
Wall Street gave up a more than 1 percent rally on Thursday as investors struggled to interpret the Federal Reserve's decision to hold off on raising interest rates. Dow Jones closed down by 0.38percent, S&P 500 ended down by 0.25 percent Nasdaq finished the day up 0.10 percent.
Treasuries Recap
U.S. Treasury yields dipped on Thursday, with two-year note yields hitting their lowest level in nearly two weeks, after the Federal Reserve kept rates unchanged after its two-day policy meeting.
U.S. 30-year Treasury bonds were last up 1-7/32 in price to yield 3.03 percent, from a yield of 3.09 percent late Wednesday.
Benchmark 10-year Treasury notes were last up 27/32 in price to yield 2.21 percent, from a yield of 2.30 percent late-year notes were last up 6/32 in price at 0.70 percent, from a yield of 0.81 percent late Wednesday.
Commodities Recap
Gold rose to a two-week high on Thursday after the Federal Reserve said it held U.S. interest rates steady following a two-day policy meeting, sending the dollar index to a three-week low.
Spot gold was up 0.8 percent at $1,127.80 an ounce, after rising to $1,130.35, the highest since Sept. 3. It rose 1.3 percent on Wednesday in its biggest daily jump since Aug. 20, helped by data showing U.S. consumer prices unexpectedly fell in August.
U.S. gold futures for December delivery settled down 0.2 percent at $1,117 an ounce, before the Fed statement.
Global oil futures fell Thursday, resuming their slide after a brief spike following the Federal Reserve's announcement that it would leave U.S. interest rates unchanged.
Brent crude for November delivery fell 67 cents to settle at $49.08 a barrel. U.S. October crude fell 25 cents to settle at $46.90 a barrel. Brent's premium to U.S crude CL slid, and settled at $1.88 a barrel.
