• US 10-year yield falls below 2% after Fed rate cut outlook
• Iran shoots down U.S. military drone in Gulf region, Oil rallies
• China, U.S. to resume trade talks but China says demands must be met
• China, US Trade Teams May Meet In Osaka As Early As Next Tuesday – Sources
• US 15 June, w/e Initial Jobless Claims, 216k, 220k forecast, 222k previous
• US 15 June, w/e Jobless Claims 4-Wk Avg, 218.75k, 217.75k previous
• US 8 June, w/e Continued Jobless Claims, 1.662 mln, 1.688 mln forecast, 1.695 mln previous
• US June Philly Fed Business Indx, 0.3, 11.0 forecast, 16.6 previous
• Bank of England chops Q2 growth view as global and Brexit risks intensify
• Bank of England sees market mismatch as Brexit clouds rates outlook
Looking Ahead – Economic Data (GMT)
• 20 June 23:00 Australia June Manufacturing PMI, 51.1 previous
• 20 June 23:00 Australia June Services PMI, 52.3 previous
• 20 June 23:00 Australia June Composite PMI, 52.2 previous
• 20 June 23:30 Japan May CPI, Overall Nationwide, 0.9% previous
• 20 June 23:30 Japan May CPI, Core Nationwide YY, 0.8% forecast, 0.9% previous
• 20 June 23:30 Japan May CPI MM NSA, 0.3% previous
• 20 June 23:30 Japan May CPI NSA, 101.8 previous
• 21 June 00:30 Japan Jun Nikkei Mfg PMI Flash, 49.8 previous
Looking Ahead – Events, Other Releases (GMT)
• N/A ECB's Mario Draghi participates in the Euro Summit in Brussels, Belgium
• 07:30 Federal Reserve Bank of Boston issues text of remarks of President Eric Rosengren on the causes of the Japanese financial crisis of the late 1990s delivered before the closed 5th Annual Macroprudential Conference in Eltville am Rhein, Germany in Boston
• 12:30 BoE's policymaker Silvana Tenreyro speaks at Economic Policy Research Network Conference 2019 in Copenhagen
• 12:30 BoE Financial Policy Committee member Martin Taylor: Panelist at the 5th Annual Macroprudential Conference, Frankfurt
• 16:00 Federal Reserve Bank of Cleveland President Loretta Mester and Federal Reserve Board Governor Lael Brainard participate in “Fed Listens: Town Hall Discussion with Federal Reserve Leadership” before the “Policy Summit 2019: Connecting People and Places to Opportunity” hosted by the Federal Reserve Bank of Cleveland in Cincinnati, Ohio
• 19:30 Federal Reserve Bank of San Francisco President Mary Daly hosts “Zip Code Economies” podcast launch in San Francisco
EUR/USD: The euro strengthened against the U.S. dollar on Thursday, after the Federal Reserve signaled it was ready to cut interest rates as early as next month. The Fed joined global peers such as the European Central Bank and the Reserve Bank of Australia this week in indicating that more policy stimulus is needed to maintain economic growth. The dollar fell 0.59% against a basket of its rivals to 96.65 for the biggest two-day loss since February 2018. The sharp fall in the dollar took currency markets by surprise and forced some hedge funds that had built up large long-dollar bets before the Fed's policy statement to dump the greenback. Immediate resistance can be seen at 1.1348 (Higher Bollinger Band), an upside break can trigger rise towards 1.1400 (Psychological level).On the downside, immediate support is seen at 1.1262 (100 DMA), a break below could take the pair towards 1.1215 (50 DMA).
GBP/USD: The pound rose higher against dollar on Thursday, after BoE held rates steady and slashed second-quarter growth forecasts and flagged risks from trade tensions and a no-deal Brexit. BoE policymakers, as expected, voted unanimously to keep interest rates on hold at 0.75%. They stuck to their message that rates would need to rise in a limited and gradual fashion, so long as Britain avoids a damaging no-deal exit from the European Union.The BoE message was far less dovish than the U.S. Federal Reserve and European Central Bank, which this week opened the door to rate cuts and more stimulus to counter any economic slowdown and rising trade tensions. The pound rose 0.49% to $1.2703, up from Monday's five-month low of $1.2507. Immediate resistance can be seen at 1.2789 (Higher Bollinger Bands), an upside break can trigger rise towards 1.2825 (50 DMA).On the downside, immediate support is seen at 1.2645 (9 DMA), a break below could take the pair towards 1.2600 (Psychological level).
USD/CAD: The Canadian dollar strengthened to a three-month high against its U.S. counterpart on Thursday, as oil prices surged and the greenback was pressured by the prospect of interest rate cuts by the Federal Reserve. The U.S. dollar sank against a basket of currencies, posting its biggest two-day drop in a year a day after the Federal Reserve signaled it was ready to cut interest rates as early as next month. The price of oil, one of Canada's major exports, jumped after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington. U.S. crude oil futures settled 5.4% higher at $56.65 a barrel. The Canadian dollar was last trading 0.65% higher at 1.3193 to the greenback. Immediate resistance can be seen at 1.3209 (50% retracement level), an upside break can trigger rise towards 1.3269 (61.8% retracement level).On the downside, immediate support is seen at 1.3147 (38.2% retracement level), a break below could take the pair towards 1.3070 (23.6% retracement level).
USD/JPY: The dollar weakened against the Japanese yen on Thursday, after as dovish comments from the U.S. Federal Reserve weakened greenback across the board. The Fed on Wednesday signalled interest rate cuts beginning as early as July, saying it was ready to battle growing global and domestic economic risks, in a marked shift in tone since its last policy meeting. The commentary was widely seen as more dovish than expected, sending dollar lower against is major peers. The dollar fell 0.59% against a basket of its rivals to 96.65 for the biggest two-day loss since February 2018. It retreated to a six-month low against the Japanese yen at 107.26, down approximately 0.75%.Strong resistance can be seen at 107.64(50% retracement level), an upside break can trigger rise towards 108.00 (Psychological level).On the downside, immediate support is seen at 107.19 (38.2% retracement level), a break below could take the pair towards 106.36 (23.6% retracement level).
European stocks surged to six-week highs on Thursday, as dovish signals from the Bank of England and Federal Reserve, allied to optimism around the resumption U.S.-China trade talks, saw investors piling into riskier assets.
The UK's benchmark FTSE 100 closed up by 0.4 percent, FTSEurofirst 300 ended the day up by 0.51 percent, Germany's Dax ended up by 0.5 percent, and France’s CAC finished the up by 0.4 percent.
The S&P 500 hit a record high on Thursday, lifted by Wall Street's expectations that the Federal Reserve will cut interest rates as soon as next month to keep the U.S.-China trade war from stalling economic growth.
Dow Jones closed up by 0.96 percent, S&P 500 ended up 0.96 percent, Nasdaq finished the day up by 0.80 percent.
U.S. benchmark 10-year Treasury yields on Thursday dropped below 2% for the first time in more than 2-1/2 years, while other maturities fell to multiyear lows as well, a day after the Federal Reserve flagged interest rate cuts as early as next month.
In afternoon trading, U.S. 10-year note yields fell to 2.0% from 2.027% late on Wednesday. Earlier in the global session, 10-year yields fell to 1.974%, the lowest since November 2016.
Yields on U.S. 30-year bonds slipped to 2.53%, from 2.54% on Wednesday. They fell as low as 2.48%, a level last touched in late October 2016.
Gold prices surged to a near six-year peak on Thursday after the U.S. Federal Reserve bank signaled it was ready to cut interest rates as early as next month to boost growth, triggering a sharp fall in the dollar.
Spot gold jumped 2.2% to $1,390.38 per ounce by 1:32 p.m. EDT (1732 GMT). Prices touched $1,392.84, their highest since early September 2013.U.S. gold futures settled 3.6% higher at $1,396.90 per ounce.
Oil soared more than 5% on Thursday after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington.
Brent crude, the global benchmark, settled up $2.63, or 4.3% at $64.45 a barrel. U.S. West Texas Intermediate crude rose $2.89, or 5.4%, to $56.65 a barrel.