Market Roundup
• U.S. job market tightens, Weekly jobless claims rise 7,000; Mid-Atlantic factory act accelerates in March.
• BoE keeps rates steady, vote 9-0; near-term outlook little changed from Feb inflation report.
• BoE minutes say likely significant proportion of recent GBP decline reflects uncertainty over Brexit.
• USD/JPY rallied on rumor BoJ checking rates, later said to be checking reasons for decline not checking rates.
• U.S. current account deficit narrows in Q4, misses forecast (-125.3B vs 118.9B forecast 129.9B previous).
• Draghi says ECB rates to remain low or lower, ready to use all instruments, monetary policy cannot address structural weakness in EZ.
• Canada's Trudeau: monetary policy impact nearing its limits.
• Brazil central bank to scale back currency intervention.
• Brazil judge issues injunction to suspend Lula's appointment, Brazil’s AG to appeal.
• BlackRock’s EM manager Bisat likes Brazil, Mexico, Indonesia, Argentina markets.
Looking Ahead – Economic Data (GMT)
• 01:30 China-China House Prices YY Feb 2.5%-previous
Looking Ahead – Events, Other Releases (GMT)
• 22:30 Australia RBA’s Luci Ellis, head of Financial Stability Department, speaks at the Financial Risk Day 2016 conference
• 23:50 Japan Bank of Japan to publish the minutes of its January policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1270 levels and currently trading at 1.1314 levels. The pair has made session high at 1.1342 and hit lows at 1.1287 levels. Euro rose against US dollar on Thursday, a day after the Federal Reserve lowered its expectations for interest rate hikes this year and expressed concerns about the state of global financial markets. The pair paused and was trading around 1.1316 levels after the release of US Philadelphia Fed Manufacturing Index, which came better than expected at 12.4 better than previous figures -2.8 and forecast of -1.7. The dollar was weaker on the day against major currencies, as continuing weakness spurred by the Federal Reserve's statement after its policy meeting ended on Wednesday. The U.S. central bank was more dovish than anticipated, causing investor’s to reverse their sell position against euro.
GBP/USD is supported in the range of 1.4380 currently trading at 1.4474 levels. It reached session high at 1.4500 and hit low at 1.4397 levels. The pair rose more than 100pips after Bank of England policymakers voted unanimously to keep interest rates on hold, but there were signs that more of them were inching closer for pushing towards first rate hike. Minutes of the Monetary Policy Committee's meeting, showed its members voted 9-0 to leave rates at their record low of 0.5 percent. Sterling started the European session on a positive tone, bouncing back from a two-week low against a weaker greenback. The pair retreated back slightly after hitting resistance level at 1.4500 and was trading around 1.4478 levels in the late New York session, despite the rally, the pair is set to fall in the in the coming days, as the Brexit speculation from Eurozone is set mount pressure on Sterling.
USD/CAD is supported at 1.940 levels and is trading at 1.2976 levels. It has made session high at 1.3045 and lows at 1.2966 levels. The Canadian dollar rose against its U.S. counterpart on Thursday a day after dovish Federal Reserve statement and strong rebound oil prices supported Canadian dollar. The U.S. central bank held interest rates steady and indicated it would tighten policy this year, but fresh projections showed policymakers expect two quarter-point increases by year-end, half the number forecast in December. Wednesday's statement suggested the Fed remained cautious on the potential risks posed by an uncertain global economy. Meanwhile Canada’s wholesale trade remained unchanged in January from December. Data from Statistics Canada showed the reading came slightly below expectations at 0.2 percent increase after a revised 1.8 percent gain in December. The currency's weakest level of the session was C$1.3133, while it touched its strongest since Oct. 20 at C$1.2946.
AUD/USD is supported around 0.7580 levels and currently trading at 0.7645 levels. It hit session high at 0.7658 and made session lows at 0.7601 levels. The Australian dollar rose to hit eight-month high against dollar on Thursday as solid domestic data and dovish comments from the U.S. Federal Reserve on Wednesday supported Aussie bulls. The Australian dollar rose to $0.7594, from $0.7464 late on Wednesday. Heavy selling of the U.S. dollar in Asia briefly sent it to $0.7620, the highest since July last year. Earlier in the day data showed Australian unemployment fell to 5.8 percent from 6.0 percent also support Australian dollar against green on the day. The Australian dollar rose to $0.7594, from $0.7464 late on Wednesday. Heavy selling of the U.S. dollar on the day briefly sent it to $0.7640, the highest since July last year.
Equities Recap
European equities ended lower after a choppy session on Thursday, dragged down by exporters as the euro strengthened against the dollar after the U.S. Federal Reserve flagged fewer rate rises this year than previously expected.
Britain's blue-chip FTSE 100 index closed up by 0.2 percent, France's benchmark CAC-40 index closed down by 0.7 percent, Germany's DAX ended down 1.1 percent, meanwhile the pan-European Eurofirst 300 index was down by 0.33 percent.
The S&P 500 and the Dow Jones industrial average turned positive for the year on Thursday, a day after the U.S. Federal Reserve signaled fewer interest rate hikes for the year.
Dow Jones closed up by 0.90 percent, S&P 500 ended up by 0.66 percent, Nasdaq finished the day up by 0.22 percent.
Treasuries Recap
U.S. Treasury debt yields fell for the fourth straight session on Thursday, a day after the Federal Reserve lowered its expectations for interest rate hikes this year and expressed concerns about the state of global financial markets.
The 30-year bond was last up more than a point in price, while yields fell to 2.676 percent from 2.710 percent late on Wednesday.
U.S. two-year notes were unchanged in price, with yields dipping to 0.863 percent from 0.867 percent.
Commodities Recap
Gold turned lower on Thursday, consolidating from a 2.5 percent surge in the previous session when the Federal Reserve cut the number of interest rate rises it forecasts for this year, sending the dollar sharply lower.
Spot gold was down 0.4 percent at $1,257.11 an ounce at 3:02 p.m. EDT (1902 GMT), after climbing 0.7 percent to $1,270.90.
U.S. gold futures for April delivery settled up 2.9 percent at $1,265 an ounce.
Oil prices hit 2016 highs on Thursday, with U.S. crude surging 5 percent to pierce the $40 barrier, on optimism that major producers will strike an output freeze deal next month amid rising crude exports and gasoline demand in the United States.
U.S. crude's West Texas Intermediate (WTI) futures settled up $1.74, or 4.5 percent, at $40.20, after scaling a 2016 high of $40.26.
Brent crude's front-month finished up $1.21 at $41.54, after earlier reaching the year's peak of $41.60.
The material has been provided by InstaForex Company – www.instaforex.com