Market Roundup
- US Mfg weakening as job market firms, Durable goods orders tumble 5.1% in Dec, core capital goods orders fall 4.3%.
- US jobless claims fell in latest week, 278k vs 282k forecast, 4-wk avg 283k.
- US December pending home sales rise 0.1% vs -1.1% in Nov, misses forecast -0.8%.
- UST yields rise as oil gains seen increasing inflation.
- Weidmann warns ECB not to go too far with gov’t bond purchases, monetary policy should look through ST oil-induced CPI fluctuations.
- Dollar down as weak U.S. data suggests Fed won’t tighten aggressively, GBP, EUR and EM rally.
- Oil jumped as Russia says Saudis proposing global oil cut, Moscow says Saudis propose 5% cut.
- No Saudi proposal whatsoever to cut output by 5 percent – CNBC, citing DJ.
- Mexico’s FX commission extends dollar auctions to support peso.
- North Korea activity points to possible space launch -U.S. officials.
- South Africa central bank says outlook for inflation has deteriorated sharply.
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Building Consents* Dec 1.8%- previous
- 23:30 Japan All house hold Spending YY* Dec forecast -2.4%, -2.9%- previous
- 23:30 Japan All house hold Spending MM* Dec forecast 2%, -2.2%- previous
- 23:30 Japan BCPI, Core Nationwide YY* Dec forecast 0.1%, 0.1%- previous
- 23:30 Japan CPI, Overall Nationwide* Dec 0.3%- previous
- 23:30 Japan Jobs/Applicants Ratio*Dec forecast 1.26, 1.25- previous
- 23:30 Japan Unemployment Rate*Dec forecast 3.3%, 3.3%- previous
- 23:50 Japan Industrial output prelim MM* Dec forecast -0.3%, -0.9%- previous
- 00:30 Australia PPI QQ* Q4 0.9%-previous
- 00:30 Australia PPI YY*Q4 1.7%- previous
- 05:00 Japan Construction Orders YY*Dec 5.7%- previous
- 05:00 Japan Housing Starts YY*Dec forecast 0.5%, 1.7%- previous
Currency SummariesEUR/USD is likely to find support at 1.0930 levels and currently trading at 1.0945 levels. The pair has made session high at 1.0969 and hit lows at 1.0937 levels. The dollar declined against euro on Thursday as U.S. durable goods printed negative figures supporting the view of weakening U.S. growth due to softer global demand, which may force the Federal Reserve further postpone US rate hike plans. The negative reading in durable goods orders, which printed worst figures since August 2014, raised the prospects of a lower-than-expected U.S. gross domestic product number on Friday. A weaker U.S. GDP print, coupled with volatility in global stock markets that has troubled investors so far in 2016, would greatly reduce the likelihood that the Fed would raise interest rates four times as it had suggested back in December. The dollar index, which measures the dollar against a basket of currencies, fell to its lowest in two weeks. It was last down 0.35 percent to 98.547. The euro touched its highest against the dollar since Jan. 20, rising 0.5 percent to $1.0944.GBP/USD is supported in the range of 1.4320 levels and currently trading at 1.4335 levels. It reached session high at 1.4406 and dropped to session low at 1.4394 levels. Sterling gained sharply against the dollar and the euro on Thursday after data showed British GDP figures printed in line with expectations in the fourth quarter, providing some support to the battered pound. Fourth-quarter gross domestic product grew by 0.5 percent, up slightly from 0.4 percent in the three months to September, the Office for National Statistics said on Thursday. This was in line with economists’ forecasts. Meanwhile year on year was 1.9 percent higher than a year earlier also met expectations. Sterling rose 0.5 percent to the day’s high of $1.4298, up from around $1.4263 beforehand. Sterling had hit a seven-year low of $1.4080 last week.USD/CAD is supported at 1.4000 levels and is trading at 1.3930 levels. It has made session high at 1.4144 and lows at 1.3942 levels. The Canadian dollar inched higher against its U.S dollar on Thursday as crude oil prices rose sharply, while weaker-than-expected U.S. data didn’t support the view for interest rate hike by Federal Reserve. Oil rose above $34 per barrel, supported by the possibility that major oil producing countries may cooperate to cut production. Crude had jumped as much as 8 percent after Russian Energy Minister Alexander Novak said Saudi Arabia had proposed that oil-producing countries cut production by up to 5 percent, however, pared most gains amid growing doubts over the deal to cut production by after media reports said that delegates from the OPEC Countries had not yet heard of any plans for talks and that Saudi Arabia had not proposed cuts. The U.S. dollar fell against the Canadian dollar, dropping below C$1.40 for the first time in three weeks. It was last down 0.35 percent at C$1.4046.NZD/USD is supported around 0.6400 levels and currently trading at 0.6433 levels. It hit session high at 0.6528 and made session lows at 0.6414 levels. The New Zealand dollar lost ground against US dollar on Thursday after New Zealand’s central bank indicated more interest rate cuts due to low inflation at home and worries about global economic growth. Much of the damage came after the Reserve Bank of New Zealand (RBNZ) kept rates on hold at 2.5 percent but delivered an easing bias just two months after suggesting that it would not cut rates further. The New Zealand dollar declined to $0.6437 from $0.6526, pulling closer to a four-month trough of $0.6348 touched last week. A break below that level will target the September low of $0.6235. The kiwi has dropped 5.5 percent this year but remained well above a trough of under 62 cents tested in August. Also undermining the kiwi was a downgrade of milk price forecasts by dairy giant Fonterra.Equities RecapEuropean shares fell on Thursday as disappointing earnings from Roche weighed on the healthcare sector and euro zone banks also came under pressure.UK’s benchmark FTSE 100 closed down by 1.1 percent, the pan-European FTSEurofirst 300 ended the day down by 1.74 percent, Germany’s Dax ended down by 2.6 percent, France’s CAC finished the day down by 1.4 percent.Wall Street gained on Thursday as a quarterly report from Facebook drove technology company shares higher and a bounce in oil prices propelled energy companies shares.Dow Jones closed up by 0.78 percent, S&P 500 ended up by 0.54 percent, Nasdaq finished the day up by 0.85 percent.Treasuries RecapU.S. Treasury prices ended higher on Thursday after weak data raised concerns about slowing U.S. economic growth, which offset higher inflation expectations as oil prices rebounded.Benchmark 10-year notes ended 5/32 in price higher to yield 1.99 percent, after earlier falling as low as 1.97 percent on the weak durable goods data.Commodities RecapGold fell by 1 percent on Thursday, pressured by earlier strength in equity markets on the back of a rally in oil prices, with bullion investors quick to cash in gains from the Wednesday’s rally to 12-week highs.Spot gold was down 0.9 percent at $1,115.36 an ounce at 3:09 p.m. EST (2009 GMT), off a session low of $1,111.56. U.S. gold futures for February delivery settled down 20 cents at $1,115.60 an ounce.Oil prices rose for the third straight day on Thursday on hopes of the first global deal in over a decade between among oil-producing countries to help clear a glut that has depressed prices for over a year and a half.Brent was up only 79 cents, or 2.4 percent, at $33.89 a barrel, after trading as high as $35.84.U.S. crude settled up 92 cents, or 2.9 percent, at $33.22 per barrel, down from a high of $34.82.
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