Market Roundup
• BoEs Mark Carney: Economy outlook worse, some monetary policy stimulus likely needed over summer.
• Mark Carney: “uncomfortable truth” is BoE cannot fully offset large economic shock of leaving EU.
• BoE's Mark Carney says will not quit if critics come to power.
• Ex-London mayor Johnson abruptly quits race to be prime minister.
• ECB mulling QE rule loosening to ensure enough bonds to buy post-Brexit.
• S&P cuts rating on EU to 'AA' after Brexit.
• Mexico central bank hikes more than expected to defend peso.
• US jobless claims rose to 268k vs forecast- 267k, 258k prior week.
• Chicago PMI 56.8 in June vs consensus for 50.7 and May's 49.3.
• No market access without budget contributions, Dombrovskis tells UK.
• Russia wants Turkish compensation before restoring ties.
• OPEC oil output hits record high in June on Nigerian rebound.
Looking Ahead – Economic Data (GMT)
• 19:30 Australia Jun AIG Manufacturing Index, prior 51
• 19:30 Japan May Jobless Rate, forecast 3.2% v 3.2%
• 19:30 Japan May Job-to-Applicants, forecast 1.35 v 1.34
• 19:30 Japan May core CPI y/y, forecast -0.4% v -0.3$
• 19:30 Japan Jun Tokyo core CPI y/y -0.5% v -0.5%
• 19:50 Japan Q2 Tankan Big Manufacturing index, forecast- 4.0 v 6.0
• 19:50 Japan Q2 Tankan non- Manufacturing index , forecast- 19 v 22
• 19:50 Japan Q2 Tankan Big CapEx , forecast +5.9% v -0.9%
• 21:00 China Jun Manufacturing PMI, forecast -50.1 v 50.1
• 21:00 China Jun Non- Manufacturing PMI, prior 53
• 21:00 China Jun Caixin Manufacturing PMI, forecast 49.2 v 49.2
• 21:00 Japan Jun Nikkei Manufacturing PMI, forecast, prior 47.7
• 01:00 Japan May National core-core CPI y/y, forecast 0.8% v 0.9%
• –:– Japan Jun Official Reserve Assets
Looking Ahead – Events, Other Releases (GMT)
• No major event scheduled
Currency Summaries
EUR/USD is likely to find support at 1.1000 levels and currently trading at 1.1101 levels. The pair has made session high at 1.1123 and hit lows at 1.1022 levels. The U.S. dollar rose against the euro on Thursday after euro was weighted down after Bloomberg reported that the ECB was considering loosening the rules for its bond purchases to ensure enough debt is available to buy following the Brexit vote and investors became more cautious ahead of political announcements in Britain following the country's vote to exit the European Union. On the data front, German retail sales rose more than expected in May and jobless numbers fell further in June as upbeat consumers and local firms drive growth in Europe's largest economy. German retail sales rose 0.9 percent in real terms in May, the strongest monthly increase since July 2015, data from the Federal Statistics Office showed. The euro was last down 0.34 percent at $1.1086 after falling to a session low of $1.1026. The euro had hit a 3-1/2 month low of $1.0909 on Friday after the Brexit vote. The dollar also gained against the yen and was last 0.4 percent higher at 103.23 yen.
GBP/USD is supported in the range of 1.3200 currently trading at 1.3291 levels. It reached session high at 1.3435 and hit low at 1.3201 levels. Sterling slipped sharply lower on Thursday after the head of the Bank of England, Mark Carney said that the BoE would probably need to pump more stimulus into Britain's economy over the summer after the shock of last week's decision by voters to leave the European Union. Investors were already expecting the BoE to cut interest rates in July or August from an already record low of 0.5 percent, and ramp up its 375 billion pound bond buying plan. Britain's vast current account deficit failed to narrow as expected in the first three months of this year and remained close to an all-time high, official data showed on Thursday. The economy grew by 0.4 percent in the first three months of 2016, in line with forecasts, and was 2.0 percent larger than a year earlier. Sterling fell more than 1.6 percent to a session low of $1.3207, less than a cent from its 31-year low of $1.3122 touched Monday. Sterling pared losses and was last down 1.1 percent at $1.3282 in afternoon U.S. trading.
USD/CAD is supported at 1.2900 levels and is trading at 1.2944 levels. It has made session high at 1.3016 and lows at 1.2912 levels. The Canadian dollar declined against its U.S. counterpart on Thursday as oil fell and its economy saw only modest growth after a recent run of losses. The immediate market flurry over Britain's vote to pull out of the European Union settled but lower oil prices weighed on the commodity-linked loonie. U.S. crude prices were down $1.55, or 3.1 percent, lower at $48.33, pressured by higher Nigerian output and concern about the economic outlook following Brexit. On the data front, The Canadian economy grew by just 0.1 percent in April from March, Statistics Canada said on Thursday, paving the way for a sickly second quarter on the back of the devastation caused by major wildfires in Alberta. Canadian government bond prices were higher across the maturity curve, with the two-year price up 5.8 Canadian cents to yield 0.524 percent and the benchmark 10-year rising 37 Canadian cents to yield 1.089 percent.
USD/JPY is supported around 102.00 levels and currently trading at 103.22 levels. It peaked to hit session high at 103.37 and made session lows at 102.33 levels. The yen declined against US dollar on Thursday as demand for dollar increased as fears about last week's Brexit vote eased and investors dumped safe-haven currencies such as the Japanese yen .Markets have regained their poise after a short bout of volatility following Britain's vote last week to leave the European Union. But concerns remain about the longer-term economic outlook and the potential for renewed turbulence. The two-day sell-off in the aftermath of last week's vote had wiped more than $3 trillion off the value of global stocks. They have recovered about half of that over the past three sessions. The dollar last traded at 103.31 yen and was last 0.4 percent higher. The greenback was set to post an 8.3-percent quarterly loss against the yen, its biggest since the fourth quarter of 2008.The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.1 percent at 95.847 after falling as low as 95.443 early on Thursday.
Equities Recap
European shares rose for a third straight session on Thursday, with expectations of central bank stimulus helping ease jitters over Britain's vote last week to exit the European Union.
UK's benchmark FTSE 100 closed up by 1.9 percent, the pan-European FTSEurofirst 300 ended the day up by 0.83 percent,Germany's Dax ended up by 0.7 percent, France’s CAC finished the day up by 1 percent.
Wall Street posted solid gains for a third straight day on Thursday as Britain's central bank raised the prospect of stimulus and consumer staples shares gained on news of Mondelez International's $23 billion bid for Hershey.
Dow Jones closed down up 1.33 percent, S&P 500 ended up by 1.35 percent, Nasdaq finished the day up by 1.33 percent.
Treasuries Recap
U.S. Treasury debt prices ended little changed on Thursday, closing out a stellar first half of the year for U.S. government bonds as global economic worries and negative yields in Europe and Japan helped drive demand.
Benchmark 10-year Treasury notes were down 1/32 in price, yielding 1.482 percent, which was up 0.6 basis point from Wednesday.
The 30-year bond , fell 10/32 in price with the yield at 2.295 percent, up 1 basis point.
Commodities Recap
Gold steadied on Thursday as the other markets showed signs of stabilizing, but remained on track for its biggest monthly rise since February in the wake of last week's vote in Britain to quit the European Union.
Spot gold was up 0.2 percent at $1,320.90 an ounce at 3:31 p.m. EDT (1931 GMT), while U.S. gold futures for August delivery settled down 0.5 percent at $1,320.60.
Oil prices dropped more than 3 percent on Thursday, pressured by returning Nigerian and Canadian crude output from outages and as traders booked profits at the end of the best quarter in seven years.
Brent futures for August delivery, which expired on Thursday, settled down 93 cents, or 1.8 percent, at $49.68 a barrel. The more active Brent contract for September delivery settled at $49.71, down 3.1 percent.
U.S. West Texas Intermediate (WTI) crude closed at $1.55, or 3.1 percent, lower at $48.33.
The material has been provided by InstaForex Company – www.instaforex.com