• Americas roundup: Dollar falls on worries over possible U.S. government shutdown, Gold flat, Wall street dips, US treasury yields hit highest in 10 months, Oil little changed after record Crude draw at U.S. hub-january 19th 2018

    Source: FxWire Pro - Media Round Ups / 18 Jan 2018 22:11:51   Eastern Standard Time

    Market Roundup

    • US w/e Initial Jobless Claims, 220k, 250k forecast, 261k previous.

    • US w/e Jobless Claims 4-wk Avg, 244.50k, 250.75k previous.

    • US w/e Continued Jobless Claims, 1.952M, 1.900M forecast, 1.867M previous, 1.876M revised.

    • US Dec Building Permits: Number, 1.302M, 1.290M forecast, 1.303M previous.

    • US Dec Building Permits: Change MM, -0.1%, -1.0% previous.

    • US Dec Housing Starts Number MM, 1.192M, 1.275M forecast, 1.297M previous, 1.299M revised.

    • US Dec House Starts MM: Change, -8.2%, 3.3% previous, 3.0% revised.

    • Amid confusion, U.S. Republicans toil to reach a deal to avert the shutdown.

    • Trump's ex-aide Bannon to appear again before House intelligence panel.

    • Trump contradicts top aide, says border wall stance has not 'evolved'.

    • Trump administration's infrastructure plan taking shape.

    • Trump flies to Pennsylvania to help Republican in a special election.

    • With eye to Brexit talks, May offers France money for border security.

    • Big trade surpluses help fuel protectionism, IMF boss tells Germany.

    • German union backs SPD bid to start formal coalition talks.

    • German property boom to boost construction sales to 23-year high.

    • France, Germany to make joint bitcoin regulation proposal at G20 summit

    Looking Ahead - Economic Data (GMT)

    • No major economic events

    Looking Ahead - Events, Other Releases (GMT)

    • Jan 18 23:05 Fed's Loretta Mester speaks on monetary policy at the Council for Economic Education's Economists on the Economy - New York

    • Jan 19 13:45 Fed's Raphael Bostic participates in a discussion before a National Regional public affairs forum - Nashville

    • Jan 19 18:30 Fed's John Williams speaks at the Bay Area Council Economic Institute's 11th Annual Forecast Conference - San Francisco

    • Jan 19 18:00 Fed's Vice Chair for Supervision Randal Quarles speaks before the American Bar Association Banking Law Committee Annual Meeting – Washington

    Currency Summaries

    EUR/USD is likely to find support at 1.2159 levels and currently trading at 1.2237 levels. The pair has made session high at 1.2263 and hit lows at 1.2207 levels. Euro edged higher against the dollar on Thursday as greenback slipped lower amid concerns over a possible U.S. government shutdown as lawmakers struggled to cobble together a federal budget deal. Congressional Republicans plowed ahead on Thursday with efforts to reach agreement on a temporary extension of government funding to avert a politically embarrassing shutdown despite mixed signals from President Donald Trump on elements of the stopgap plan. Trump complicated the negotiations by criticizing a plan to win Democratic support with a six-year extension of funding for the Children's Health Insurance Program (CHIP), a Democratic priority. The White House later issued a statement saying the president fully supported the proposal pending in the House of Representatives. The dollar index was down 0.36 percent at 90.590. It held above a three-year low of 90.104 touched on Wednesday. The euro hovered below its three-year peak against the greenback. It was up 0.43 percent at $1.2236. The greenback reversed gains from late Wednesday after Apple Inc said it would make about $38 billion in one-time tax payments on its overseas cash holdings, though analysts expect the impact on currency markets is going to be limited.

    GBP/USD is supported in the range of 1.3740 levels and currently trading at 1.3896 levels. It reached session high at 1.3915 and dropped to session low at 1.3828 levels. The British pound strengthened against the greenback on Thursday as pound was buoyed by weaker dollar and optimism that Britain will reach a favourable divorce deal with the EU and that the economy will continue to grow at a healthy clip albeit more slowly that if there had been no Brexit vote. Sterling has climbed more than 5 percent against the dollar over the past two months, helped by Britain's success in late December in securing a deal to move exit talks on to discussions over a transition period and post-Brexit trade. The pound jumped to as high as $1.3942 in New York trading on Wednesday before easing back by the end of the day. On Thursday it rebounded half a percent to trade at $1.3903. Sterling has in recent sessions been supported by a sell-off in the dollar and more positive noises from Europe over negotiations with Britain over the terms of its departure from the trading bloc.British Prime Minister Theresa May on Thursday offered France 44.5 million pounds ($62 million) to bolster security at French border controls, part of measures to deepen cooperation that she hopes will foster goodwill in Brexit talks. With the improved outlook for those discussions, traders said sterling had been able to anchor itself again to the domestic story, where the economy is proving more resilient than expected.

    USD/CAD is supported at 1.2396 levels and is trading at 1.2424 levels. It has made session high at 1.2487 and lows at 1.2413 levels. The Canadian dollar weakened against its US counterpart on Thursday as comments by U.S. President Donald Trump the day before appeared to validate concerns that the United States looks increasingly likely to pull out from NAFTA. Trump said that terminating the North American Free Trade Agreement would result in the "best deal" to revamp the 24-year-old trade pact with Canada and Mexico in favor of U.S. interests. The future of NAFTA future was the most significant downside risk cited by the Bank of Canada on Wednesday, in an otherwise bullish report on the outlook for Canada's economic growth. The central bank on Wednesday raised its benchmark interest rate by 25 basis points to 1.25 percent, its highest since January 2009, after recent data showed stronger inflation and strong job growth. But a report released on Thursday by ADP showed that Canada shed 7,100 jobs in December, driven by cuts in the manufacturing, education and trade sectors. The Canadian dollar was last trading at C$1.2426 to the greenback, down 0.1 percent. The currency traded in a range of C$1.2410 to C$1.2479.

    USD/JPY is supported around 110.17 levels and currently trading at 111.06 levels. It peaked to hit session high at 111.20 and made session lows at 110.67 levels. The Japanese yen strengthened against the dollar on Thursday as the greenback fell on worries over a possible U.S. government shutdown as global investors sought to diversify their holdings into other currencies. Mixed economic reports also gave investors reason for pause as weekly initial jobless claims hit a 45-year low but U.S. homebuilding recorded its biggest drop in just over a year. U.S. home building fell more than expected in December, recording its biggest drop in just over a year, likely as the unseasonably cold weather at the end of the month disrupted the construction of single-family housing units. The steep drop in groundbreaking activity probably will be temporary against the backdrop of a tightening labor market. Other data on Thursday showed the number of Americans filing for unemployment benefits dropped to a 45-year low last week. Housing starts decreased 8.2 percent to a seasonally adjusted annual rate of 1.192 million units last month, the Commerce Department said. November's sales pace was revised up to 1.299 million units from the previously reported 1.297 million units. The trade-weighted dollar index was down 0.44 percent at 90.513. It held above a three-year low of 90.104 touched on Wednesday. While the dollar was down 0.23 percent against the Japanese yen at 111.02 yen.

    Equities Recap

    European shares notched up modest gains on Thursday, led higher by a fresh rise for so-called cyclical stocks while company updates and ratings changes from brokers spurred moves among individual names.

    UK's benchmark FTSE 100 closed down by 0.4 percent, the pan-European FTSEurofirst 300 ended the day up by 0.12percent, Germany's Dax ended up by 0.6 percent, France’s CAC finished the day down by 0.1 percent.

    Wall Street ended lower on Thursday as losses in industrial stocks and interest-rate sensitive sectors offset marginal gains in tech stocks.

    Dow Jones closed down by 0.36 percent, S&P 500 ended down by 0.16 percent, Nasdaq finished the day down by 0.04 percent.

    Treasuries Recap

    Yields on U.S. 10-year notes reached a 10-month high on Thursday after China reported fourth-quarter growth that accelerated for the first time in seven years.

    The 10-year inflation breakeven rate, or the yield gap between 10-year TIPS and regular 10-year Treasury notes, was 2.09 percent, its highest level since February 2017.

    10-year Treasury yields were 2.626 percent, its highest since March 14. Two-year yields were 2.048 percent, after hitting 2.060 percent earlier in the day, the highest since September 2008.

    Commodities Recap

    Gold was flat in a narrow range on Thursday, first dipping as the dollar rose and then rising as the dollar moved lower, but bullion's gains were limited by higher U.S. Treasury yields.

    Spot gold was unchanged at $1,327.61 an ounce by 1:49 p.m. EST (1849 GMT). Earlier in the session, it touched its lowest since Jan. 12 at $1,323.70.

    U.S. gold futures for February delivery settled down $12, or 0.9 percent, at $1,327.20 per ounce.

    Oil was little changed on Thursday, as prices eased early in the session, but were supported by a record drawdown of U.S. crude stockpiles at the Cushing, Oklahoma delivery hub.

    Brent crude, the global benchmark, settled down 7 cents at $69.31 a barrel. On Monday it touched $70.37, the highest since December 2014.

    U.S. crude was down 2 cents at $63.95, having hit its highest since December 2014 on Tuesday.