Today’s economic news offers some compelling insights.
Market Update
Dollar Index:
The dollar index rose slightly by +0.04% on Thursday. It found support after US weekly jobless claims dropped more than expected to a 4-month low, a sign that could encourage further hawkish moves from the Federal Reserve. Additionally, higher T-note yields bolstered the dollar through increased interest rate differentials. However, the dollar pulled back from its highs as the British pound surged to a 2.5-year high following the Bank of England’s decision to keep interest rates unchanged. Lingering negative sentiment from Wednesday also weighed on the dollar after the Fed cut interest rates by 50 basis points and signaled another 50-basis point cut by year-end.
Crude Oil:
Oil prices rose sharply on Thursday after a positive US jobless claims report combined with a 50-basis point rate cut by the Federal Reserve, easing concerns about a slowing US economy. Additionally, a larger-than-expected 1.63-million-barrel draw in crude inventories reported on Wednesday contributed to the bullish sentiment, though increases in distillate and gasoline inventories raised concerns about cooling US fuel demand as the peak summer travel season winds down.
Gold:
Gold prices inched higher on Thursday, one day after the Federal Reserve cut interest rates for the first time in four years. A stronger US dollar following a lower-than-expected jobless claims report slightly capped gains for gold, but the overall impact of rate cuts supported higher prices.
Copper:
Copper futures rose to a two-month high, benefitting from the weaker US dollar and optimism for stronger demand. Concerns over tight supply and expectations for economic stimulus in China, the world’s top copper consumer, added further support. Weaker-than-expected industrial output, retail sales, and fixed-asset investments in China raised hopes for additional government stimulus to boost manufacturing.
Thursday Prices action (MCX)
Gold 73438 (+0.52%), Silver 89968 (+1.89%), Copper 814.40 (+0.67%) Crude 6026 (+1.91%) Natural gas 195.90(+1.35%)
Yesterday Data and Event Update –
- The Bank of England held interest rates at 5.0% on Thursday and voted to run down its stock of British government bonds by another 100 billion pounds over the coming 12 months, weighing on the government’s finances.
- US current account deficit, which measures the flow of goods, services and investments into and out of the country, increased $25.8 billion, or 10.7%, to $266.8 billion last quarter.
- Initial claims for state unemployment benefits dropped 12,000 last week to a seasonally adjusted 219,000 for the week ended Sept. 14, the lowest level since the middle of May, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
Major Economic News, Data and Event scheduled today
Japan
At 5.20am- National Core CPI y/y. Data is foreseen at 2.8% from previous 2.7%.
Tentative – BOJ Policy Rate. Forecast 0.25%, previous was at 0.25%.
Tentative – Monetary Policy Statement and Press Conference.
Above data could have a volatile impact on the Yen.
China
At 6.30am-
1-y Loan Prime Rate. Data is foreseen at 3.35% from previous3.35%
5-y Loan Prime Rate. Data is foreseen at 3.85% from previous 3.85%.
Above data could have a neutral impact on the Dollar.
Eurozone
At 11.30am—German PPI m/m. Data is foreseen at 0.0% from previous 0.2%.
At 7.30pm – Consumer Confidence. Data is foreseen at -13 from previous -13.
At 8.30pm- ECB President Lagarde Speaks.
Above data could have a neutral impact on the Euro.
UK
At 11.30am-
Retail Sales m/m. Data is foreseen at 0.3% from previous 0.5%.
Public Sector Net Borrowing. Data is foreseen at 12.1B from previous 2.2B
At 2.30pm- MPC Member Mann Speaks.
Above data could have a positive impact on the Pound.
CANADA
At 5.45pm-BOC Gov Macklem Speaks.
At 6.00pm-
Core Retail Sales m/m. Data is foreseen at 0.2% from previous 0.3%.
Retail Sales m/m. Data is foreseen at 0.5% from previous -0.3%.
Above mentioned economic news and data could have a volatile impact on the Canadian dollar.
US
At 11.30pm- FOMC Member Harker Speaks.
Above mentioned economic news and data could have a neutral impact on the dollar.
Happy Trading!
Commodity Samachar Securities
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