It has been another busy day on Thursday, with safe haven demand in the currency markets seeing a rush into the Yen and the Chf, although the other currency pairs are mostly rangebound. Sterling did see a run higher after better than expected UK Retail Sales but then ran out of steam, while the Euro remains heavy, just above its recent trend lows. The DXY fell by 0.23% to 93.69, after hitting a high of 93.91, as the dollar came under some pressure after the US existing home sales fell 2.5% in April to 5.46 mio against expectations of a fall of 5.56 mio. The initial jobless claims rose by 11K to a seasonally adjusted 234K for the week, missing economists’ forecast for a drop to 220K. US Yields took a hit, with the 10 Years heading back under 3% (2.98%), which did not help the dollar’s cause.
US stocks ended slightly lower after Donald Trump canceled a planned summit with North Korea’s Kim Jung Un. WTI settled sharply lower, down 1.5%, after reports that OPEC is considering scaling back production cuts to counter a possible shortage in global supplies weighed on sentiment. Gold jumped more than 1% on the back of rising safe-haven demand after Trump cancelled his meeting with President Kim.
Friday will begin with the Tokyo CPI, although there is then nothing to go on until the German IFO Business Climate/Expectations and the Preliminary UK GDP (exp0.1%qq, 1.2%yy) and Total Business Investment (exp 0.2%qq, 2.3%yy). The focus in the US will be on the April Durable Goods Orders (exp -1.4%, Ex Transport +0.5%). There will also be plenty of CB Speakers, including The Feds Powell, Kaplan, Evans Bostic; The BOEs Carney and Coeure and the Buba’s Weidmann. Have a good weekend.
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