Market Roundup
• US jobless claims rise 17k largest rise in more than a year; planned layoffs surge 35 5 in April.
• Canadian building permits drop 7% in Mar v -5% forecast, weighed by oil-producing Alberta.
• Japan’s Abe: Japan attaches importance to UK as gateway to EU, prefers UK remains in EU.
• Japan’s Abe: G7 policy coordination, flexible fiscal policy needed to put global econ on sustained strong growth, volatile FX moves undesirable, Japan not attempting to influence FX moves on permanent basis.
• Fed’s Lockhart: ‘on the fence’ on possibility of June rate hike.
• Fed’s Bullard: effects of strong USD appear to be waning, core inflation trending higher.
• Oil up on fire curbs Canada output; higher dollar, stockpiles cap gains.
• BCB minutes: not considering easing monetary conditions, sees progress in inflation fight.
• US Pres candidate Trump says would most likely replace Fed Chair Yellen when her time is up.
Looking Ahead – Economic Data (GMT)
• 01:00 Australia HIA New Home Sales m/m Mar -5.3%-previous
• 01:30 Australia Retail Sales MM* Mar forecast 0.3%, 0%- previous
• 01:30 Australia Retail Trade* Q1 forecast 0.7%, 0.6%- previous
• 01:30 Australia Trade Balance G&S (A$)* Mar forecast -2900m, -3410m-previous
• 01:30 Australia Goods/Services Imports* Mar 0%- previous
• 01:30 Australia Goods/Services Exports* Mar -1%- previous
• 01:45 China Caixin Services PMI Apr 52.2-previous
Looking Ahead – Events, Other Releases (GMT)
• 01:30 Australia- Reserve Bank of Australia quarterly statement on monetary policy
Currency Summaries
EUR/USD is likely to find support at 1.1370 levels and currently trading at 1.1404 levels. The pair has made session high at 1.1415 and hit lows at 1.1383 levels. The euro declined against US dollar on Thursday as traders closed out profitable bets against the greenback before Friday's U.S. payrolls report which may confirm the view the Federal Reserve will not raise interest rates soon. Investors were also bracing for Friday's U.S. jobs data for April as any signs of a strengthening labor market could influence the pace of rate hikes. The U.S. dollar rose against a basket of major currencies as traders closed out profitable bets against it ahead of the payrolls data. Reports detailing the health of the U.S. economy have been mixed this week and the Federal Reserve has signaled it will make its June interest rate policy decision based on what the data tell them. That kept investors largely on hold as they await the numbers.
GBP/USD is supported in the range of 1.4410 and currently trading at 1.4482 levels. It reached session high at 1.4515 and hit low at 1.4443 levels. The British pound slipped to lower on Thursday against the dollar as services sector report added to concerns that the British economy is declining in the run-up to a vote on whether Britain should quit the European Union. Most economists reckon leaving the EU would deal a blow to the British economy, with a hefty current account deficit – 7 percent of GDP in the last quarter of last year – leaving it vulnerable to any pull-back in investment flows. Meanwhile PMI survey showed that Britain's services sector grew at its lowest rate in more than three years in April. The index fell to 52.3 in April from 53.7 in March, well below even the analyst’s forecasted figures. Sterling fell to a 10-day low of 1.4444, well below a four-month high of 1.4770 struck on Tuesday. It was last trading at 1.4480, still down 0.2 percent on the day.
USD/CAD is supported at 1.2780 levels and is trading at 1.2862 levels. It has made session high at 1.2875 and lows at 1.2784 levels. The Canadian dollar weakened against US dollar on Thursday as greenback strengthened across the board on renewed optimism that, U.S. economy could bounce back after nearly stalling in the first quarter and crude oil reversed course after hitting high 46$ per barrel. On the data front, Canadian building permits issued in March fell by 7.0 percent as construction intentions in oil-producing Alberta dropped following a big jump in February, Statistics Canada said on Thursday. The decline for the second time in three months was greater than the 5.0 percent retreat forecasted by analysts. Ahead on Friday, traders will be keeping a close eye for U.S. jobs data for April, to indicate the likelihood of a rate hike by June that will further bolster the dollar.
USD/JPY is supported around 106.60 levels and currently trading at 107.26 levels. It hit session high at 107.50 and made session lows at 106.77 levels. The Japanese yen declined against greenback on Thursday after the pair stepped back from recent peaks, while the greenback was supported by optimism that, U.S. economy could bounce back after nearly stalling in the first quarter. Prime Minister Shinzo Abe on Wednesday warned Japan will act if necessary to weaken the yen, although many believe the bar is high for any market intervention. Meanwhile, latest data showed the U.S The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year, but the underlying trend continued to point to a strengthening labor market. Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 274,000 for the week ended April 30, the Labor Department said. Last week's increase was the largest since February of last year.
Equities Recap
European stock markets ended mixed on Thursday, as investors digested earnings updates including from telecoms group BT and oil company Repsol.
UK's benchmark FTSE 100 down by 0.05 percent, the pan-European FTSEurofirst 300 ended up by 0.14 percent, Germany's Dax ended down by 0.01 percent, France’s CAC finished the day down by 0.38 percent.
U.S. stocks gave up early gains to end flat on Thursday as consumer discretionary shares fell and investors showed caution ahead of the April jobs report.
Dow Jones closed up by 0.05 percent, S&P 500 ended down by 0.03 percent, Nasdaq finished the day down by 0.20 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Thursday as the number of Americans filing for unemployment benefits rose unexpectedly but remained within the range of a strong labor market, leaving investors with no clear signals ahead of Friday's nonfarm payrolls report.
Benchmark 10-year Treasuries fell 3/32 in price to yield 1.79 percent.
Commodities Recap
Oil prices surged on Thursday after a raging wildfire near Canada's oil sands region curbed output that mainly flows to the United States, before settling off their highs as a rebounding dollar and a huge U.S. stockpile build cut into gains.
Brent futures settled up 39 cents, or 0.9 percent, at $45.01 a barrel.
U.S. crude's West Texas Intermediate (WTI) futures rose 54 cents, or 1.2 percent, to settle at $44.32.
Gold turned lower on Thursday, dropping for the fourth straight session on pressure from the firm U.S. dollar ahead of Friday's U.S. payrolls report, which will give clues about whether the Federal Reserve will soon raise interest rates.
Spot gold was down 0.5 percent at $1,272.23 an ounce at 2:07 p.m. EDT (1807 GMT). U.S. gold futures settled down 0.2 percent at $1,272.30 an ounce.
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