Market Review - 31/07/2014 22:59GMT
Dollar steadies ahead of Friday’s key U.S. jobs report
The greenback moved narrowly inside 102.75-103.01 range on Thursday after Wednesday's rally to a 3-1/2 month top of 103.15 due to a surprise jump in U.S. GDP. Despite Thursday's brief bounce from Asian low at 102.72 to 103.01 after the release of U.S. jobless claims, price later retreated to 102.75 in New York.
The four-week average of jobless claims dropped to 297,250, the lowest since April 2006, from 300,750 the prior week. Claims in the period ended July 26 climbed to 302,000 versus the economist forecast of 301,000 with downwardly revised 279,000 (the lowest since 2000) the prior week.
The single currency also moved narrowly on Thursday after Wed's resumption of decline to a fresh 8-1/2 month low at 1.3366 due to a surprise jump in U.S. GDP. Euro edged lower from Wednesday's NY res at 1.3405 to 1.3371 in NY after the release of US jobless claims b4 rebounding to 1.3399. Earlier in the day, Germany retail sales came in at 1.3% m/m and 0.4% y/y versus previous readings of -0.6% and 1.9% respectively. German unemployment rate remained unchanged at 6.7% whilst unemployment change came in at -12K versus forecast of -5K.
Despite staging a brief bounce to 1.6927 just before Europe open on Thursday, renewed selling quickly emerged after the release of U.K. Nationwide house prices which came in lower than the economists’ forecast. July m/m was 0.1% versus forecast of 0.5%, previous month's reading was 1.0%. Cable ratcheted lower to a fresh 6-week low at 1.6857 after the release of U.S. jobless claims before recovering to 1.6889 in late NY.
In other news, Bank of England Deputy Governor Ben Broadbent in an interview in his office said, it's "quite possible" the pound is 10% overvalued and its strength may have a long-lasting impact on inflation.
IMF said 'Japan's risks over medium-term are tilted to downside; if Japan doesn't deliver on reforms, growth expectations may falter, concerns over public debt will rise; BoJ easing without structural reforms cud cause yen to weaken unduly, complicate exit fm QE; gov't must take bolder steps to increase labour supply, ease regulations in services sector; no need for BoJ easing now, but BoJ shud act quickly if growth weakens or inflation expectations reverse; Japan to grow 1.6% this year, stabilize around 1% growth in medium-term.'
Friday will see the release of China’s NBS manufacturing PMI, Australia’s PPI, Japan’s manufacturing PMI, China HSBC manufacturing PMI final, U.S. unemployment rate, Markit/CIPS manufacturing PMI, unemployment rate, PCE price index, private payrolls and non-farm payrolls, University of Michigan consumer confidence and ISM manufacturing PMI.
Dollar steadies ahead of Friday’s key U.S. jobs report
The greenback moved narrowly inside 102.75-103.01 range on Thursday after Wednesday's rally to a 3-1/2 month top of 103.15 due to a surprise jump in U.S. GDP. Despite Thursday's brief bounce from Asian low at 102.72 to 103.01 after the release of U.S. jobless claims, price later retreated to 102.75 in New York.
The four-week average of jobless claims dropped to 297,250, the lowest since April 2006, from 300,750 the prior week. Claims in the period ended July 26 climbed to 302,000 versus the economist forecast of 301,000 with downwardly revised 279,000 (the lowest since 2000) the prior week.
The single currency also moved narrowly on Thursday after Wed's resumption of decline to a fresh 8-1/2 month low at 1.3366 due to a surprise jump in U.S. GDP. Euro edged lower from Wednesday's NY res at 1.3405 to 1.3371 in NY after the release of US jobless claims b4 rebounding to 1.3399. Earlier in the day, Germany retail sales came in at 1.3% m/m and 0.4% y/y versus previous readings of -0.6% and 1.9% respectively. German unemployment rate remained unchanged at 6.7% whilst unemployment change came in at -12K versus forecast of -5K.
Despite staging a brief bounce to 1.6927 just before Europe open on Thursday, renewed selling quickly emerged after the release of U.K. Nationwide house prices which came in lower than the economists’ forecast. July m/m was 0.1% versus forecast of 0.5%, previous month's reading was 1.0%. Cable ratcheted lower to a fresh 6-week low at 1.6857 after the release of U.S. jobless claims before recovering to 1.6889 in late NY.
In other news, Bank of England Deputy Governor Ben Broadbent in an interview in his office said, it's "quite possible" the pound is 10% overvalued and its strength may have a long-lasting impact on inflation.
IMF said 'Japan's risks over medium-term are tilted to downside; if Japan doesn't deliver on reforms, growth expectations may falter, concerns over public debt will rise; BoJ easing without structural reforms cud cause yen to weaken unduly, complicate exit fm QE; gov't must take bolder steps to increase labour supply, ease regulations in services sector; no need for BoJ easing now, but BoJ shud act quickly if growth weakens or inflation expectations reverse; Japan to grow 1.6% this year, stabilize around 1% growth in medium-term.'
Friday will see the release of China’s NBS manufacturing PMI, Australia’s PPI, Japan’s manufacturing PMI, China HSBC manufacturing PMI final, U.S. unemployment rate, Markit/CIPS manufacturing PMI, unemployment rate, PCE price index, private payrolls and non-farm payrolls, University of Michigan consumer confidence and ISM manufacturing PMI.
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