Market Roundup
- Stocks rally, euro falls as ECB open to more stimulus.
- ECB leaves rates unchanged as expected.
- Euro slides as ECB’s Draghi sends dovish rate signals.
- ECB’s Draghi: degree of accommodation will need to be reexamined in Dec, Weighed on EUR.
- ECB’s Draghi: deposit rate cut was discussed, a few members hinted at acting today.
- ECB’s Draghi: asset purchases proceeding smoothly, GC willing & able to act by using all available instruments.
- ECB’s Draghi: expects recovery to continue albeit dampened by weak Fgn demand.
- ECB’s Draghi: renewed downside risks have emerged for growth, inflation outlook.
- U.S. jobless claims up slightly (+3k), four-week average lowest since 1973.
- U.S. existing home sales rise more than expected (+4.7% v 1.4% forecast), inventory tighter.
- U.S. Treasury postpones 2-yr auction (Tues) due to borrowing limit.
Looking Ahead – Economic Data (GMT)
- 01:30 China China House Prices YY*Sep -2.3%-previous
- 01:35 Japan Nikkei Mfg PMI Flash*Oct-51-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.1090 levels and currently trading at 1.1110 levels. The pair has made session high at 1.1349 and hit lows at 1.1101 levels. The euro tumbled on Thursday after European Central Bank President Mario Draghi said the bank discussed a further interest rate cut and raised the possibility of further easing measures to counter weak inflation in the euro zone. In a news conference, Draghi said it would review in December what more it could do to tackle the threat of weak inflation, adding that a further cut to the deposit rate was brought up and the ECB council was ready act. Europe’s shared currency fell to a one-month low against sterling, a more than two-week trough versus the dollar, and a three-week low against the yen as Draghi gave a downbeat assessment of the region’s economy. Europe’s shared currency fell to a one-month low against sterling, a more than two-week trough versus the dollar, and a three-week low against the yen as Draghi gave a downbeat assessment of the region’s economy. In the United States, data on Thursday showed U.S. unemployment benefits claims rose by 3,000 to 259,000 last week, below the 265,000 expected, while existing home sales increased more than expected to an annual rate of 5.55 million units in September. To the upside, immediate resistance can be seen at 1.1120. To the downside, immediate support level is located at 1.1087 levels.GBP/USD is supported in the range of 1.5340 levels and currently trading at 1.5393 levels. It reached session high at 1.5432 and hit session low at 1.5365 levels. Sterling slipped lower on Thursday against the dollar as the sterling was dragged down after the European Central Bank chief suggested more easing was on the way including a deposit rate cut, contrasting with the implications of bumper UK retail sales data.The British data bolstered expectations that the Bank of England could raise interest rates in the fourth quarter of 2016, while the ECB appears to still be grappling with whether to increase its quantitative easing programme. Earlier in European session, sterling had hit a one-month high against the dollar and euro after data showed British retail sales grew at the fastest rate in almost two years last month, boosted by beer sales linked to the Rugby World Cup. Retail sales volumes surged by 1.9 percent on the month, far higher than economists’ forecasts for a 0.3 percent rise, the Office for National Statistics said on Thursday. Sterling slipped from 1.5430 to hit 1.5367 levels its weakest since Oct. 14, before edging up to $1.5400. To the downside, immediate support level is located at 1.5340 levels. To the upside, immediate resistance can be seen at 1.5400.USD/JPY is supported around 119.60 levels and currently trading at 119.84 levels. It hit session high at 119.96 and made session lows at 119.67 levels. Dollar inched higher against Japanese yen on Thursday after data showed U.S. home resales rebounded strongly in September and new applications for unemployment benefits hovered around 42-year lows last week, pointing at solid domestic fundamentals even as the global economy falters. Thursday’s upbeat housing and labor market reports could keep the door open to an interest rate hike from the Federal Reserve by the end of the year. The National Association of Realtors said existing home sales increased 4.7 percent to an annual rate of 5.55 million units last month, almost erasing August’s decline. A firming housing market is boosting household wealth, driving a robust pace of consumer spending. In turn, strong domestic demand is helping to cushion the blow on the economy from softening global growth, a strong dollar and weak capital spending in the energy sector. Against the yen, the dollar was up 0.5 percent to 120.75. To the upside, immediate resistance can be seen at 120.75. To the downside, immediate support level is located at 120.43 levels. USD/CAD is supported at 1.3060 levels and is trading at 1.3094 levels. It has made session high at 1.3156 and lows at 1.3081 levels. The Canadian dollar strengthened slightly against its U.S. counterpart on Thursday after hitting its weakest level in more than two weeks the day before, as commodity prices recovered somewhat. The loonie, as Canada’s currency is colloquially known, traded in a tight range above C$1.31, a level it hit for the first time since Oct. 6, after the Bank of Canada trimmed its growth outlook on Wednesday. On the data front, Canadian retail sales rose more than expected in August, climbing for the fourth month in a row as sales at motor vehicle and parts dealers increased, data from Statistics Canada showed on Thursday. Retail sales rose by 0.5 percent, topping economists’ expectations for a gain of 0.1 percent. But excluding the autos and parts sector, sales were flat. In volume terms, total retail sales rose 0.7 percent. The Canadian dollar traded at C$1.3121 to the greenback, or 76.21 U.S. cents, stronger than Wednesday’s official close of C$1. currency’s strongest level of the session was C$1.3103, while its weakest was C$1.3149. To the upside, immediate resistance can be seen at 1.3119. To the downside, immediate support level is located at 1.3055 levels.Equities RecapEuropean stocks rallied on Thursday after the European Central Bank decided to stick with its monetary support programme and reassess in December whether further measures might be needed.UK’s benchmark FTSE 100 ended up 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 2.19 percent, Germany’s Dax ended up 2.6 percent, France’s CAC finished the day up by 2.4 percent.U.S. stocks jumped on Thursday on stronger-than-expected corporate results from companies including McDonald’s and cues from the European Central Bank about extending its stimulus program.Dow Jones closed up by 1.87 percent, S&P 500 ended up by 1.67 percent, Nasdaq finished the day up 1.65 percent.Treasuries RecapU.S Treasury prices rose on Thursday ,following through on overseas debt rallies and getting lift in shorter maturities from federal officials pushing back an action of 2-year Treasury notes because of the debt ceiling limit.The two year Treasuries yield was last 0.6006 percent , down over 2 basis points from late Wednesday.Other shorter-term Treasuries, including the five year note, were also up in price. The five-year was last yielding 1.34 percent on a price gain of 2/32.The 30 year Treasury bond were as high as 2.90 percent before easing to 2.86 percent, reflecting a price rise of 4/32.Commodities RecapGold fell to its lowest in more than a week on Thursday, pressured by a strong dollar and uncertainty over the timing of a U.S. Federal Reserve interest rate rise.Spot gold eased 0.1 percent to $1,165.76 an ounce by 2038 GMT, after touching a new low since Oct. 13 at $1,162.50 earlier. It fell 0.8 percent on Wednesday.U.S gold for December delivery , the most avtive gold futures contract ,settled down $1at $1,166.10.Crude oil inched higher on Thursday as gains prompted by a rally in gasoline and technical charts calling for higher prices were capped by worries about high U.S. crude inventories.Brent crude settled up 23 cents, or 0.5 percent, at $48.08 a barrel. The global crude benchmark was up nearly 2 percent earlier in the day.U.S. crude rose 18 cents, or 0.4 percent, to settle at $45.38.
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