Market Roundup
•Swiss May PPI (MoM) -0.3%, 0.5% forecast,0.6% previous
•Swiss May PPI (YoY) -1.8%,-1.8% previous
•EU Apr Industrial Production (MoM) -0.1%,0.1% forecast,0.6% previous
•EU Apr Industrial Production (YoY) -3.0%,-1.9% forecast,-1.0% forecast,
•US Jobless Claims 4-Week Avg. 227.00K,222.25K previous
•US Continuing Jobless Claims1,820K,1,800K forecast,1,792K previous
•US Initial Jobless Claims242K,225K forecast,229K previous
•US May Core PPI (YoY) 2.3%,2.4% forecast, 2.4% previous
•US Core PPI (MoM) 0.0%,0.3% forecast,0.5% previous
•US May PPI (YoY) 2.2%,2.5% forecast,2.2% previous
•US May PPI ex. Food/Energy/Transport (MoM) 0.0%,0.4% previous
•US May PPI (MoM) -0.2%,0.1% forecast,0.5% previous
Looking Ahead Economic Data (GMT)
•15:30 US 4-Week Bill Auction 5.270% previous
•15:30 US 8-Week Bill Auction 5.265% previous
Looking Ahead Events And Other Releases (GMT)
•16:00 US FOMC Member Williams Speaks
Currency Forecast
EUR/USD: The euro edged lower on Thursday after Eurozone industrial output fell unexpectedly In April. Eurozone industrial production dropped unexpectedly in April on falling intermediate goods output, official data showed Thursday.Industrial output logged a monthly fall of 0.1 percent, marking the first drop in three months, Eurostat said. Production was forecast to grow 0.2 percent after rising 0.5 percent in March. Within major industrial groupings, only intermediate goods output contracted in April, which was down 0.4 percent. Meanwhile, energy output was up 0.4 percent. The euro, which skimmed six-week lows earlier this week, was down 0.2% at $1.0788, having jumped 0.64% the day before. Immediate resistance can be seen at 1.0766(Daily high), an upside break can trigger rise towards 1.0809(38.2% fib).On the downside, immediate support is seen at 1.0741 (50% fib), a break below could take the pair towards 1.0671(61.8% fib).
GBP/USD: The pound edged higher on Thursday as concerns over stagflation in the British economy weighed on pound .Data this week has painted a fairly stagflationary picture for the British economy, with wage growth still running hot, while economic growth had completely stalled in April.Traders expect at least one rate cut from the Bank of England this year, but the jury is out on whether or not there will be a second.The BoE meets next week. Futures markets currently show traders are placing a 75% chance of a cut by September, with a cut fully priced in for November. Sterling eased 0.2% to $1.277, having gained 0.5% the day before. Immediate resistance can be seen at 1.2790(23.6%fib), an upside break can trigger rise towards 1.2823(Higher BB).On the downside, immediate support is seen at 1.2704(38.2%fib), a break below could take the pair towards 1.2629(50% fib).
USD/CHF: The dollar eased against the Swiss franc on Thursday after the U.S. Federal Reserve cut its interest rate cut projections to just one this year.The Fed held rates steady and projected only one rate cut in 2024 despite some progress in inflation, as growth and unemployment lodged at levels better than the U.S. central bank considers sustainable in the long run. U.S. Fed Chair Jerome Powell struck a familiar tone in his news conference and stressed policymakers would be sensitive to economic data. Although fewer rate cuts were projected for this year, policymakers had them pencilled for 2025 or 2026. Despite the Fed's projections, markets stuck with pricing in almost two 25-basis-point rate cuts this year. Immediate resistance can be seen at 0.8979 (38.2% fib), an upside break can trigger rise towards 0.9036(23.6% fib).On the downside, immediate support is seen at 0.8845 (50% fib), a break below could take the pair towards 0.8900 (61.8% fib).
USD/JPY: The U.S. dollar gained against yen on Thursday as investor’s awaited outcome of upcoming Bank of Japan policy meeting. The BOJ concludes a two-day policy meeting on Friday and markets are expecting some sort of announcement or signal that the bank will be pulling back on massive bond purchases to allow further rises in Japanese yields.That leaves the yen vulnerable to disappointment. It was last at 157.21 to the dollar and on the back foot on crosses where it hit a 17-year trough of 97.06 per kiwi overnight and a 16-year low of 200.91 on sterling . Strong resistance can be seen at 157.56(23.6%fib), an upside break can trigger rise towards 157.93(Higher BB).On the downside, immediate support is seen at 156.23(38.2% fib), a break below could take the pair towards 154.94 (50%fib).
Equities Recap
European equities lost ground on Thursday, weighed down by elevated government bond yields after the U.S. Federal Reserve cut its interest rate cut projections to just one this year.
UK's benchmark FTSE 100 was last down by 0.71 percent, Germany's Dax was last down by 1.77 percent, France’s CAC was last down by 1.85 percent.
Commodities Recap
Gold prices edged lower on Thursday after the U.S. Federal Reserve projected just one interest rate reduction this year, dashing investors' hopes of two cuts, while a cooler-than-expected inflation report limited the dip.
Spot gold was down 0.2% at $2,317.38 per ounce, as of 1053 GMT. U.S. gold futures fell 0.9% to $2,333.10.
Oil prices edged higher on Thursday after U.S. markets opened to economic data showing a softening of the country's labour market while fresh inflation numbers suggested that price pressures could be easing.
Brent crude futures rose 23 cents, or 0.3%, to $82.38 a barrel by 1339 GMT. West Texas Intermediate (WTI) U.S. crude futures rose 16 cents, or 0.2%, to $78.66. Both benchmarks had gained nearly 1% in the previous session.
