Posted at 09 March 2023 / Categories Market Roundups
Market Roundup
•US Continuing Jobless Claims 1,718K , 1,659K forecast,1,655K previous
•US Initial Jobless Claims 211K ,195K forecast,190K previous
•US Jobless Claims 4-Week Avg. 197.00K ,193.00K previous
•1 US Natural Gas Storage -84B,-80B forecast,-81B previous
•US 4-Week Bill Auction 4.640%,4.590% previous
•US 8-Week Bill Auction 4.820%,4.655% previous
Looking Ahead Economic Data GMT)
•23:30 Japan Jan Household Spending (YoY) 0.1% forecast.-1.3% previous
•23:30 Japan Jan Household Spending (MoM) 1.4% forecast,-2.1% previous
•03:00 Japan BoJ Interest Rate Decision -0.10% forecast,-0.10% previous
Looking Ahead Events and Other Releases (GMT)
•03:00 Japan BoJ Monetary Policy Statement
•05:00 Japan BoJ Press Conference
Currency Summaries
EUR/USD: The euro edged higher against the dollar on Thursday after higher-than-expected U.S. weekly jobless claims spurred hopes that a softening labour market will reduce the chances of the Federal Reserve re-accelerating the pace of its rate hikes. The number of Americans filing new claims for unemployment benefits increased by the most in five months last week, but the underlying trend remained consistent with a tight labor market. The U.S. Labor Department’s nonfarm payrolls (NFP) data is due on Friday.Friday’s NFP data will be closely scrutinised by traders for confirmation that the jobs market remains strong and thus economy is robust enough to take rate hikes. The euro was last up 0.2% at $1.0580. Immediate resistance can be seen at 1.0596 (9DMA), an upside break can trigger rise towards 1.0699(38.2%fib).On the downside, immediate support is seen at 1.0521 (50%fib), a break below could take the pair towards 1.0490(Lower BB).
GBP/USD: Sterling ticked higher against a softer dollar on Thursday, although traders were still focused on the global backdrop after expectations rose this week for bigger interest rate hikes from the U.S Federal Reserve. Looking at the UK, Turner pointed to key data in the coming weeks before the Bank of England convenes on March 23 for its next policy meeting.UK employment and wage data will be published on March 14. Next week will also see British finance minister Jeremy Hunt announce his new budget. Immediate resistance can be seen at 1.1938(38.2%fib), an upside break can trigger rise towards 1.2069(23.6%fib).On the downside, immediate support is seen at 1.1816(50%fib), a break below could take the pair towards 1.1772(Lower BB).
USD/CAD: The Canadian dollar weakened to a near five-month low against its U.S. counterpart on Thursday, as investors turned cautious ahead of a key U.S. employment report and eyed diverging policy between the Bank of Canada and the Federal Reserve. Markets have been on edge in recent days as Fed Chair Jerome Powell delivered a message of higher and potentially faster rate hikes. The move came ahead of the release of U.S. and Canadian employment reports on Friday. The loonie was trading 0.2% lower at 1.3825 to the greenback, or 72.33 U.S. cents, after touching its weakest level since Oct. 21 at 1.3837.Immediate resistance can be seen at 1.3839 (23.6%fib), an upside break can trigger rise towards 1.3855 (Higher BB).On the downside, immediate support is seen at 1.3768 (5DMA), a break below could take the pair towards 1.3730 (38.2%fib).
USD/JPY: The dollar dipped against yen on Thursday after data showed U.S. jobless claims rose more than expected last week, raising hopes that a softening labor market will reduce the likelihood of the Federal Reserve reaccelerating the pace of its rate hikes.Initial claims for state unemployment benefits rose 21,000 to a seasonally adjusted 211,000 for the week ended March 4. Economists polled had forecast 195,000 claims for the latest week.It comes before Friday's highly anticipated jobs report for February, which may determine whether the Fed increases its pace of rate hikes to 50 basis points at its March 21-22 meeting. Strong resistance can be seen at 136.63(5DMA), an upside break can trigger rise towards 137.67(23.6%fib).On the downside, immediate support is seen at 135.65 (38.2%fib), a break below could take the pair towards 135.00(Psychological level).
Equities Recap
European shares ended lower on Thursday, with real estate stocks leading the falls, as investors grew increasingly worried about the prospects of interest rates remaining higher for longer.
UK's benchmark FTSE 100 closed down by 0.63 percent, Germany's Dax ended up by 0.01 percent, France’s CAC finished the day down by 0.12 percent.
Wall Street slid sharply on Thursday, pulled lower by bank stocks and jitters ahead of Friday's employment report, while Treasury yields dropped on signs that the Federal Reserve's restrictive policy is beginning to work as intended.
Dow Jones closed down by 1.66% percent, S&P 500 closed down by 1.85% percent, Nasdaq settled down by 2.05% percent.
Treasuries Recap
Shorter-dated U.S. Treasury yields declined on Thursday, after labor market data showed weekly initial jobless claims rose more than expected last week while stocks on Wall Street sold off to sap risk appetite.
The yield on 10-year Treasury notes was down 5.3 basis points at 3.923%.The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 17.5 basis points at 4.891% and poised for its biggest one-day basis point drop since January 6.
Commodities Recap
Gold jumped on Thursday as the dollar retreated, after data showed U.S. jobless claims grew more than expected last week, providing some hope to investors that the Federal Reserve’s interest rate hikes could be less aggressive than feared.
Spot gold gained 1.1% to $1,832.75 per ounce, as of 2:19 p.m. ET (1919 GMT). U.S. gold futures rose 0.9% to settle at $1,834.60.
Oil prices slid about 1% to a two-week low on Thursday on increased worries the U.S. Federal Reserve may go too far with its interest rate hikes to control inflation, which could cause a recession and reduce future oil demand.
Brent futures fell $1.07, or 1.3%, to settle at $81.59 a barrel, their lowest close since Feb. 22.U.S. West Texas Intermediate (WTI) crude fell 94 cents, or 1.2%, to settle at $75.72, their lowest close since Feb. 27.