Market Roundup
- U.S. jobless claims post largest increase since February, 276k v 262k forecast, 260k-previous.
- Fed’s Lacker: confident overseas slowdown not affecting US, economy calls for higher rates.
- BOE holds rates/APP steady, vote 8-1 (McCafferty) sees little inflation pick-up.
- BOE says dampening effect of GBP’s rise to persist after H2 ’16 to diminish slowly, GBP craters.
- BOE’s Carney: if we ever needed to, we could cut rates below current level.
- Canada Oct Ivey purchasing manager’s seasonally adjusted index slows to 53.1 v forecast 54.
- Goldman raises Oct U.S. payroll view to growth of 190k from 175k.
- Gap between U.S. and German two-year yields (+115bps) widest since 2006.
- OPEC unlikely to cut in December without non-OPEC -Gulf delegate.
- Copper hits weakest in a month, weighed down by firm dollar.
Looking Ahead – Economic Data (GMT)
- 23:50 Japan Foreign Bond Investment w/e 463.2b-previous
- 23:50 Japan Foreign Invest JP Stock w/e 324.9b-previous
- 05:00 Japan Coincident Indicator MM* Sep -0.6-previous
- 05:00 Japan Leading Indicator* Sep -1.5-previous
- 22:30 Australia AIG Construction Index Oct 51.9-previous
Looking Ahead – Events, Other Releases (GMT)
- 04:00 Japan- BOJ Gov Haruhiko Kuroda speaks at an event sponsored by Jiji News
Currency SummariesEUR/USD is likely to find support at 1.0840 levels and currently trading at 1.0876 levels. The pair has made session high at 1.0888and hit lows at 1.0855 levels. The dollar edged euro on Thursday, after comments from Federal Reserve officials indicating a growing chance of an interest rate hike next month lifted the dollar. Comments from Fed Chair Janet Yellen on Wednesday boosted the dollar, with the impact carrying over to Thursday’s session. The probability for a December interest rate hike are now seen as higher than 50 percent after Yellen laid out what appeared to be the base case at the U.S. central bank that the economy is ready for higher rates. These developments strengthened the dollar against most of the pair and pressured commodities against the dollar. The dollar index, which tracks the greenback against six major peers, was up 0.1 percent at 98.034, having gained 0.8 percent on Wednesday. Meanwhile, The greenback traded between 1.0896 and 1.0856 against the euro on Thursday after unexpectedly weak data on U.S. jobless claims. To the upside, immediate resistance can be seen at 1.0880. To the downside, immediate support level is located at 1.0848 levels.GBP/USD is supported in the range of 1.5200 and currently trading at 1.5211 levels. It reached session high at 1.5389 and dropped to session low at 1.5205 levels. Sterling declined over 1 percent on against dollar on Thursday, after the head of the Bank of England poured cold water on the view that it would raise interest rates shortly after the U.S. Federal Reserve. The Bank of England gave no inputs on Thursday it was ready to raise interest rates, predicting that inflation, now near zero, would pick up only slowly even if rates stay on hold all next year, and highlighting the increase in external risks to the UK economy over the past three months. Investors who had betted that the first UK rate rise since the financial crisis would come in the third quarter of 2016 but that expectation is pushed back to the end of next year. Sterling fell slipped over 1 percent to $1.5228 during BoE Governor Mark Carney’s news conference, its weakest since Oct. 13. Against the euro, the pound fell 1.2 percent to 71.49 pence, having earlier hit an 11-week high of 70.425 pence. To the upside, immediate resistance can be seen at 1.5231. To the downside, immediate support level is located at 1.5200 levels.USD/JPY is supported around 121.00 levels and currently trading at 120.75 levels. It peaked to hit session high at 121.98 and made session lows at 121.64 levels. Dollar inched higher against Japanese yen on Thursday after U.S. applications for unemployment benefits last week recorded their largest increase in eight months, but remained at levels consistent with a fairly healthy labor market. Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 276,000 for the week ended Oct. 31, the Labor Department said. It was the largest weekly increase since late February. Solid payroll gains in October could seal the case for a December interest rate increase from the Federal Reserve. The claims report showed the number of people still receiving benefits after an initial week of aid increased 17,000 to 2.16 million in the week ended Oct. 24. The four-week moving average of continuing claims, however, fell to the lowest level since November 2000. The dollar broke out of its recent 120.00 to 121.60 range against the yen to reach a two-month high of 122.00 yen. It was last up 0.1 percent at 121.66 yen. To the upside, immediate resistance can be seen at 122.00. To the downside, immediate support level is located at 121.40 levels. USD/CAD is supported at 1.31120 levels and is trading at 1.3166 levels. It has made session high at 1.3185 and lows at 1.3150 levels. The Canadian dollar weakened on Thursday against a broadly firmer U.S. dollar, contending with sustained pressure on crude oil and rising risk of a Federal Reserve interest rate hike as early as December. The Canadian dollar started to decline after crude oil slipped further after selling off on Wednesday, with U.S. crude prices down 1 percent to $45.88 a barrel and Brent crude losing 0.5 percent to $48., The pace of purchasing activity in Canada declined slightly in October, while the employment measure fell into contraction territory, according to Ivey Purchasing Managers Index data released on Thursday. The seasonally adjusted index edged down to 53.1 from 53.7 in September, short of analysts expectations for 54.0. A reading above 50 indicates an increase in the pace of activity. the Canadian dollar was traded between C$1.3190 and C$ 1.3190 to the greenback in the US session. The market attention will be turning towards to U.S. and Canadian employment data on Friday. Analysts estimate that Canadian employment will rise 10,500 in October after adding 12,000 jobs in September. To the upside, immediate resistance can be seen at 1.3185. To the downside, immediate support level is located at 1.3140 levels.Equities RecapEuropean stocks were mixed on Thursday helped by strong earnings report by some corporate companies supporting the overall market, although commodity-related stocks took a hit by a stronger dollar.UK’s benchmark FTSE 100 closed down by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.4 percent, Germany’s Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.7 percent.U.S. stocks ended slightly lower on Thursday as investors kept their attention on corporate results from companies such as Facebook and disappointing showing by Qualcomm ahead of key jobs numbers on Friday.Dow Jones closed down by 0.01 percent, S&P 500 ended down by 0.10 percent, Nasdaq finished the day down 0.29 percent.Treasuries RecapU.S. two-year Treasury yields jumped to highest levels in 4-1/2 years on Thursday on expectations that the Federal Reserve will hike rates in December, meanwhile log dated yields also edged up on fresh corporate supply.U.S. two-year Treasury notes were flat in price to yield 0.846 percent. Benchmark 10-year notes were last down 5/32 in price to yield 2.250 percent, from a yield of 2.230 percent late Wednesday.U.S. 30-year bonds were last down 13/32 to yield 3.016 percent, from a yield of 2.994 percent late Wednesday.Commodities RecapU.S. crude oil settled down as much as 2 percent on Thursday as an oversupply of crude and weak global gasoline prices extended the previous session rout.Brent futures closed down 60 cent ,or 1.2 percent ,at $48.68 briefly rose during the session ,supported by steady share prices on Wall street.Gold slipped to a seven-week low on Thursday as the dollar edged near three-month high, and looked exposed to further losses after Federal Reserve officials remain optimistic about raising U.S. interest rate rise in December.Spot gold fell to $1,103.90 an ounce, its lowest level since Sept. 16 earlier and was down 0.2 percent at $1,105 by 2:28 p.m. EST (1928 GMT). U.S. December futures ended down 0.2 percent at $1,104.20.
The material has been provided by InstaForex Company – www.instaforex.com