Market Roundup
• Fed's Bullard: December a reasonable time to implement a rate increase.
• Investors exuberant as Trump signals shift from austerity era.
• Trump team contacted JPMorgan's Dimon for Treasury role.
• Trump adviser Malpass: people should move on from Fed, talk more about other policies-CNBC.
• Malpass: Trump giving more influence to Pence on cabinet picks CNBC.
• Canada's Trudeau: important Canada is open to talking about NAFTA, other trade deals.
• Brazil real drops by the most in 5 years on Trump concerns.
• Mexican peso's record slump deepens after Trump win.
• Mexico cuts peso bond issues due to volatility from US election.
• Fed's Bullard: level of market volatility around election so far is not troubling.
• U.S. jobless claims 254k,below forecast for 260k and 265 previous week.
• Loomis Sayles' Fuss sees higher U.S. bond yields after Trump win.
• Low euro zone core inflation a concern: ECB's Constancio.
• Brazil's Meirelles: Trump may hurt EM growth, raise funding costs-blog.
• Brazil cenbank will not put more pressure on FX market-Goldfajn.
Looking Ahead - Economic Data (GMT)
• 21:30 New Zealand Manufacturing PMI* Oct 57.7-previous
• 21:45 New Zealand Food Price Index* Oct -0.90%- previous
• 23:00 Japan Reuters Tankan DI Nov 10- previous
• 23:50 Japan Corp Goods Price MM* Oct f/c -0.1%, 0.00%- previous
• 23:50 Japan Corp Goods Price YY* Oct forecast -2.7%, -3.20%-previous
Looking Ahead - Events, Other Releases (GMT)
• 01:00 Australia RBA Deputy Governor Guy Debelle to feature at the FINSIA's Regulators panel.
Currency Summaries
EUR/USD is supported at 1.0860 levels and currently trading at 1.0886 levels. The pair has made session high at 1.0906 and hit lows at 1.0865 levels. The dollar gained against euro on Thursday after investors reassessed positions, while U.S. bond yields continued to climb on the likelihood of inflation under President-elect Donald Trump's proposed fiscal policy. Investors after the election quickly shifted to focus on Trump's priorities, including tax cuts, an increase in defense and infrastructure spending, and bank deregulation. His victory has also called into question the expected U.S. interest rate increase in December. But the Republican president-elect has also vowed to boost growth in the U.S. economy which could boost the dollar and in turn hurt gold, which is priced in the U.S. currency. The expansionary policy is expected to lead to inflation. The dollar has continued to strengthen and was last up 0.36 percent at 98.856 against a basket of major currencies. The greenback was on track for its fourth straight session of gains. The euro fell to $1.0865, its lowest against the greenback since Oct. 25.
GBP/USD is supported in the range of 1.2500 levels and currently trading at 1.2539 levels. It reached session high at 1.2585 and dropped to session low at 1.2527 levels. Sterling rose against the dollar on Thursday, as investors unwound short positions against the pound amid uncertainty about the fallout from the U.S. election and focused on upcoming European political risks. The pound's almost 20 percent since Britain voted to leave the European Union in June has been the main currency story on developed markets in the months that have followed, and investors have built up record short positions against it on the view that it has further to fall. But the fog of uncertainty created by Donald Trump's victory in the U.S. presidential vote, after a campaign that included a range of potentially disruptive policy pledges, from building a wall between the United States and Mexico to declaring China a currency manipulator, could provide a different set of impulses over the next few months. Having fallen against the dollar on Wednesday, sterling gained more than 1 percent on Thursday to reach as high as $1.2587.
USD/CAD is likely to find support at 1.3400 levels and is trading at 1.3475 levels. It has made intraday high at 1.3500 and lows at 1.3428 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as Canadian dollar was pressured by lower oil prices and broader gains for the greenback as investors weighed how the policies of U.S. president-elect Donald Trump could affect economic growth. Trump has promised to cut taxes and spend on infrastructure, but analysts said fears about the impact of some of his campaign promises on Canadian trade have raised the risk of an interest rate cut by the Bank of Canada. The central bank cut rates twice last year as a plunge in oil prices hit the economy. The bank has kept rates at 0.50 percent since July 2015, but acknowledged after its policy meeting last month that it had considered cutting again. Trump has pledged to renegotiate the North American Free Trade Agreement. The Canadian dollar was trading at C$1.3491 to the greenback, or 74.12 U.S. cents, weaker than Wednesday's close of C$1.3378, or 74.75 U.S. cents.
USD/JPY is supported around 105.64 levels and currently trading at 106.82 levels. It peaked to hit session high at 106.97 and made session lows at 106.24 levels. Japanese yen declined against US dollar on Thursday as markets weighed the election of businessman Donald Trump for U.S. president and how his policies could affect economic growth. The greenback rose by more than 1 percent on the day to 106.94 yen for the first time since .The dollar also rose substantially against a basket of major world currencies, touching its highest level in more than two weeks and hovering just below levels last seen in early February. A rally in major world stock markets lost some steam while U.S. bond yields continued to climb on fears of a revival in inflation under Trump's fiscal policy. Trump has pledged to tear up or renegotiate international trade deals, which could unleash a wave of protectionism.
Equities Recap
European shares ended slightly lower on Thursday as expectations of fiscal stimulus from U.S. President-elect Donald Trump boosted government bond yields, prompting losses among utilities which more than outweighed stronger financial stocks.
UK's benchmark FTSE 100 closed up by 1.1 percent, the pan-European STOXX 600 index ended down 0.1 percent, France’s CAC finished the day up by 0.1 percent, German’s Dax down by 0.1.
Bank stocks and industrials surged on Thursday while Apple and other technology shares sank as Wall Street rearranged its bets to benefit from Donald Trump's presidency.
Dow Jones closed down by 1.18 percent, S&P 500 ended down by 0.20 percent, Nasdaq finished the day down by 0.24percent.
Treasuries Recap
The yield on U.S. 30-year Treasury bonds rose 38 basis points on the week for its biggest weekly increase since January 2009 as investors dumped longer-dated bonds on the view U.S. President-elect Donald Trump's economic policies would push up inflation
The bond market selloff since late on Tuesday in response to Trump's surprise victory propelled 30-year yield to 2.957 percent on Thursday, which was its highest level since January
Commodities Recap
Oil prices settled more than 1 percent lower on Thursday as markets recovered from shock over U.S. President-elect Donald Trump's victory and focused on oversupply concerns, as well as whether OPEC will decide later this month to cut production.
Brent crude settled down 54 cents, or 1.1 percent, at $45.84 a barrel. U.S. West Texas Intermediate crude ended 61 cents, or 1.4 percent, lower at $44.66.
Gold fell more than 1 percent on Thursday after the dollar rose to a 3-1/2 month high against the yen, as markets weighed the election of Donald Trump as U.S. president and how his policies could affect economic growth.
Spot gold was down 1.5 percent at $1,258.90 an ounce by 3:00 p.m. EST (2000 GMT), after touching $1,258.06, its lowest since Oct 18. U.S. gold futures settled down 0.6 percent at $1,266.40.
