Market Roundup
• US job market firming despite anemic economic growth; claims -9k, 4-week avg +3.5k.
• ECB Minutes: showed concern over core inflation, most members favored a 10bps & a desire to leave the door open to further easing, exemptions to negative rates were considered but were seen as too complex.
• ECB’s Draghi: cautions future of global economy uncertain, recovery proceeding at moderate pace.
• ECB’s Visco Financial cycle still negative in aggregate in most countries, less accommodation would harm everyone.
• ECB’s Praet: persistence of negative rates for 2-3 years worrisome for bank business models.
• USD/JPY continues to slump, to 17 month low, as BOJ seen unlikely to act.
• US bond yields hit 6-wk low on growth fears, Safe-haven flight drives USD to 17-mos low vs JPY.
• Copper off 3.4% as China copper exports expected to rise, oil down on Cushing build despite Keystone shutdown.
Looking Ahead – Economic Data (GMT)
• 23:50 Japan Current Account NSA JPY Feb forecast 2006.0b, 520.8b-previous
• 05:00 Japan Consumer Confidence. Index Mar 40.1-previous
• 06:00 Japan Economy Watchers Poll Mar 44.6-previous
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1320 levels and currently trading at 1.1371 levels. The pair has made session high at 1.1400 and hit lows at 1.1335 levels. The euro declined against US dollar on Thursday after European Central Bank officials drew the boundaries of future action on Thursday, saying that the central bank had no plan to transfer helicopter money directly to Europeans but was willing to take incremental actions to counter global slowdown. Europe's shared currency fell against the dollar from $1.1453, its highest level in nearly six months, to a session low of $1.1338. It was last down 0.2 percent at $1.1375. Meanwhile, the dollar was little changed against a basket of currencies after the claims data. U.S. stocks were trading lower, tracking falling oil prices, while U.S. Treasury debt prices rose.
GBP/USD is supported in the range of 1.4015 and currently trading at 1.4053 levels. It reached session high at 1.4117 and hit low at 1.4053 levels. Sterling slipped lower on Thursday against the dollar as the sterling was dragged down by persistent concern that Britain will vote to leave the European Union in a referendum in June. Investors got a reminder last week of just how exposed Britain might be if foreign investors are deterred by the prospect of Brexit. Britain's current account deficit grew to 7 percent of GDP in the final quarter of last year. Sterling fell by as much as half a percent on Thursday against Europe's single currency to a 22-month trough of 81.17 pence per euro before recovering to 80.83 pence, still down 0.2 percent on the day. Against the dollar, it fell 0.3 percent to $1.4086.
USD/JPY is supported around 107.50 levels and currently trading at 108.30 levels. It hit session high at 108.40 and made session lows at 107.63 levels. Dollar slipped lower against Japanese yen on Thursday as the pair was hammered down on bets the Bank of Japan will refrain from intervention to contain the ongoing bearish price movement in the pair. The U.S. dollar fell below 108 levels for the first time in 17 months. Meanwhile BOJ Governor Haruhiko Kuroda said in a quarterly meeting of BOJ branch managers the central bank was ready to take additional monetary easing steps if needed to hit the bank's 2 percent inflation target. The dollar fell as much as 1.6 percent against the yen to 107.71yen, its lowest since late October 2014, before paring some losses in late trading.
USD/CAD is supported at 1.3015 levels and is trading at 1.3154 levels. It has made session high at 1.3180 and lows at 1.3122 levels. The Canadian dollar declined against its U.S. counterpart on Thursday after hitting its daily high level in the early European session, as the oil prices declined in the US session after recovering some losses from yesterday’s lows. Oil fell as rising exports from Iraq underlined the global oversupply situation, outweighing the effects of a surprise fall in U.S. inventories the previous day. The Canadian dollar looks set to weaken slightly in the coming months because of the prospect of U.S. Federal Reserve interest rate hikes and less-robust domestic economic data. The value of Canadian building permits issued in February jumped by 15.5 percent on strength in the energy-producing province of Alberta, which has been hit by the oil price slump. The currency's strongest level of the session was C$1.3019, while its weakest was C$1.3155.
Equities Recap
European equities ended lower on Thursday, with financial shares losing ground and stocks like Skanska and Daimler slumping after trading without the attraction of their latest dividend payouts.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.89 percent, Germany's Dax closed down at 1.2 percent, and France’s CAC finished the day down by 1.1 percent.
U.S. stocks dropped Thursday as oil prices slid and worries about the global economy resurfaced, putting pressure on the dollar as investors fled riskier assets.
Dow Jones closed down by 0.97 percent, S&P 500 ended the day down by 1.19 percent, Nasdaq finished the day down by 1.46 percent.
Treasuries Recap
U.S. Treasury yields fell broadly on Thursday to their lowest levels since late February as declining oil prices and fears about slowing global economic growth underpinned bond prices.
Benchmark 10-year Treasuries rose 17/32 in price to yield 1.696 percent, their lowest since Feb. 24 and down more than 5 basis points from late on Wednesday.
Commodities Recap
Oil settled lower on Thursday after data showed higher weekly inventories at the U.S. crude storage base despite a pipeline outage, but prices pared losses on short-covering, suggesting more volatility ahead.
Brent futures 1 settled down 41 cents, or about 1 percent, at $39.43 a barrel, retracing losses from the session low that saw Brent down more than $1, or nearly 3 percent.
U.S. crude futures finished down 49 cents at $37.26, after tumbling as low as $36.69.
Gold jumped almost two percent on Thursday as the dollar fell to a 17-month low against the Japanese yen following minutes from the U.S. Federal Reserve's latest meeting and global shares fell, rekindling investor appetite for safer assets.
Spot gold hit a two-week high of $1,243.50 an ounce, a rise of 1.8 percent, and was up 1.3 percent at $1,237.60 at 2:23 p.m. EDT (1823 GMT).
U.S. gold futures for June delivery settled up 1.1 percent at $1,223.80 an ounce.
The material has been provided by InstaForex Company – www.instaforex.com