Market Roundup
- Wall St dip led by utilities, factory activity slows, oil prices down a touch off early highs.
- US Treasuries rise on positioning ahead of U.S. jobs report.
- U.S. jobless claims rise in latest week (277k, forecast -270k, 267k-previous).
- U.S. construction spending rises to highest since 2008 (Aug 0.7%, forecast 0.5%, 0.40%-previous).
- U.S. Mfg sector growth eases in September (ISM), prices paid, employment index, new orders all lower.
- Bundesbank’s Weidmann calls for steady ECB course, no “hectic action”.
- ECB’s Jazbec says ECB APP is still working, no need to change QE.
- ECB’s Nouy: Euro zone banks still face profitability squeeze, credit risk.
- UK sees rise in labour costs as Bank of England watches.
- Emerging market net capital flow negative in 2015, first time since 1988.
- Chile’s central bank was split in decision to hold rate in Sept.
Looking Ahead – Economic Data (GMT)
- 23:30 Japan All Household Spending YY* Aug forecast -0.4%, -0.2%-previous
- 23:30 Japan All Household Spending MM* Aug forecast-0.5%, 0.6%-previous
- 23:30 Japan Jobs/Applicants Ratio Aug forecast -1.22, 1.21-previous
- 23:30 Japan Unemployment Rate Aug forecast -3.3%, 3.3%-previous
- 01:30 Australia Retail Sales MM* Aug forecast-0.4%, -0.1%-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.1160 levels and currently trading at 1.1183 levels. The pair has made session high at 1.1208 and hit lows at 1.1130 levels. The dollar drifted lower against euro on Thursday as traders puzzled over data sending contrary messages about the U.S. economy and prospects for a 2015 interest rate hike by the Federal Reserve. A day before September’s potentially market-rattling U.S. employment data, separate reports showed growth at U.S. factories slowed in September while weekly jobless claims pointed to a tightening labor market. The euro was up 0.25 percent against the dollar at $1.1206. On the data front, Euro zone manufacturing growth weakened slightly last month on the back of a slower pace of new orders and output, even as factories started cutting their prices again to drum up business, a survey showed. Markit’s final manufacturing Purchasing Managers’ Index was 52.0 last month, similar to forecasted figures of 52.3. PMI covering Germany, Europe’s largest economy and home to some of its best-known manufacturers, fell as well to 52.3 from August’s 53.3.The PMIs in Europe came a day after official data showed consumer prices fell again in September, adding to pressure on the European Central Bank to expand its stimulus program, already set at more than 1 trillion euros. To the upside, immediate resistance can be seen at 1.1210. To the downside, immediate support level is located at 1.1180 levels.GBP/USD is supported in the range of 1.5080 levels and currently trading at 1.5130 levels. It reached session high at 1.5182 and dropped to session low at 1.5126 levels. Sterling rose from five-month lows against the dollar on Thursday, helped by a slightly better-than-expected performance by Britain’s manufacturing sector last month and contrasting with a more subdued reading from the United States. The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) reading was 51.5 for the UK, slightly ahead of forecasts of 51.3 and holding above the 50 threshold that divides growth from contraction. Sterling was up 0.3 percent at $1.5170, having fallen to $1.5107 earlier in the day, equalling its lowest level in five months that it also touched late on Wednesday. It was also helped in part by a report that showed British productivity rising at its fastest pace in four years in the second quarter. Sterling has lost ground in recent weeks as expectations for the first Bank of England (BoE) rate hike since 2007 receded into the second half of next year, from the start of 2016 previously. The BoE is expected to follow the Federal Reserve once the U.S. central bank starts raising rates from their historic lows, a move some traders expect before the end of this year. To the upside, immediate resistance can be seen at 1.5150. To the downside, immediate support level is located at 1.5120 levels. USD/JPY is supported around 119.23 levels and currently trading at 119.92 levels. It made session high at 119.96 and made session lows at 119.47 levels. The dollar declined against Japanese yen on Thursday after data showed the pace of growth at U.S. factories slowed in September. The Institute for Supply Management (ISM) data release showed that the national factory activity fell to 50.2 in September from 51.1 the month before. The reading was shy of the expected 50.6. On the other side, Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 277,000 for the week ended Sept. 26. Despite the weakness abroad, America’s domestic economy and the labor market have appeared on more solid footing, which has boosted expectations the Fed could hike rates this year or in early 2016. Investors will look to Friday’s key payrolls report in hopes for more clarity for when the Fed will begin raising rates. To the upside, immediate resistance can be seen at 120.10. To the downside, immediate support level is located at 119.70 levels. USD/CAD is supported at 1.3215 levels and is trading at 1.3259 levels. It has made session high at 1.3274 and lows at 1.3219 levels. The Canadian dollar rallied to almost two-week highs on Thursday against a broadly weaker U.S. dollar and U.S. crude prices that surged more than 4 percent. Crude oil, a major Canadian export, jumped in part on worries about potential damage to oil installations from a hurricane headed for the U.S. East Coast. Plunging crude prices have dragged the loonie down sharply over the last year and remains a significant driver for the currency. The U.S. dollar, which pulled back after data showed the pace of growth in the U.S. manufacturing sector remained at or near levels not seen since 2013, also helped the Canadian dollar. On the data front, The RBC Canadian Manufacturing Purchasing Managers’ index (PMI), fell to a seasonally adjusted 48.6 last month from 49.4 in August. It was the lowest level in the survey’s five-year history and the second month in a row the index has been below the 50 threshold showing the sector contracted. The currency, which was outperforming nearly all of its key currency counterparts, traded between C$1.3219 and C$1.3331 in the US session. To the upside, immediate resistance can be seen at 1.3285. To the downside, immediate support level is located at 1.3250 levels.Equities RecapEuropean shares fell on Thursday, with phone stocks leading the way after a capital raising move at Altice to fund a U.S. acquisition and technology stocks pressured by concerns over chip orders from Apple.The pan-European FTSEurofirst 300 index ended down 0.4 percent, UK’s benchmark FTSE 100 closed up by 0.2 percent, Germany’s Dax ended down by 1.5 percent, France’s CAC finished the down by 0.6 percent.Wall Street started the last quarter of the year in the red in a choppy trading session as investors fled utilities and telecoms while they parsed mixed U.S. data. Dow Jones down ended down by 0.08 percent, S&P 500 ended up 0.19 percent, Nasdaq finished the day up 0.14 percent.Treasuries RecapU.S. Treasury debt prices rose on Thursday with benchmark yields falling to their lowest in over five weeks as a further deceleration in U.S. manufacturing stoked investor worries in advance of Friday’s U.S. payrolls report.Ten-year Treasuries notes were up 8/32 in price to yield 2.031 percent, down 3 basis points from late on Wednesday. Ten-year yield earlier hit 2.009 percent which was its lowest level since Aug. 30-year bond was up 21/32 in price with a yield of 2.845 percent, down 3 basis points on the day. The 30-year yield touched 2.819 percent, the lowest in more than five weeks.Commodities RecapOil prices fell more than 1 percent on Thursday as the government’s storm monitor altered forecasts for the path of the latest U.S. hurricane, snuffing out an early rally that was prompted by fears of storm damage to U.S. East Coast oil installations.Brent, the global benchmark for crude, settled down 68 cents, or 1.4 percent, at $47.69 a barrel, after hitting a one-week high at $49.84.The West Texas Intermediate (WTI) benchmark for U.S. crude finished down 35 cents, or 0.8 percent, at $44.74. At its session peak, it was up more than $2 or 4 percent.Gold recovered from two-week lows on Thursday as the dollar lost ground to the euro, but uncertainty ahead of Friday’s U.S. nonfarm payroll figures held prices in a narrow range.Spot gold was down less than 0.1 percent at $1,114.06 an ounce, after dropping to $1,110.75, its lowest level since Sept. 16. U.S. December gold futures settled down $1.50 an ounce at $1,113.70.
The material has been provided by InstaForex Company – www.instaforex.com