USA equity markets sell off sharply, euro, sterling and Canadian dollar make gains, at the expense of U.S. dollar
USA equity markets slumped on Thursday, despite the latest U.S. GDP figures coming in at 1.4% annualised, beating the expectations of a 1.2% rise. Weekly unemployment claims came in at 244k, missing the forecast of 240k. The sell off in the USA appeared to be profit taking based, as opposed to any specific economic calendar news spooking the markets and it must be noted that most USA equity markets are still up considerably, both on a YoY basis and year to date.
The DJIA closed down 0.78%, SPX down 0.86% and NASDAQ down 1.44%. GBP/USD closed the day out resting at R1, at close to the 1.300 handle. EUR/USD ended the day at approx. 1.1441, up circa 0.6%, close to R2. USD/JPY ended the day at circa 112.10, having at one point (shortly after the New York open), breached R2 to reach a high of 112.92, the currency pair then gave up its gains, slumping through S1. USD/CAD fell by circa 0.2% to 1.2998, the Loonie was still remaining bullish after the Canadian central bank’s governor Stephen Poloz delivered a hawkish tone in a speech on Wednesday. The Dollar Spot Index fell by 0.1%.
WTI oil advanced by 0.2% to $44.91 a barrel, receding from a high of $45.59 during mid afternoon in the New York session. Prices continued to improve due to government data revealing a drop in U.S. gasoline supplies. Gold fell by approx. 0.3% on the day, to close out at $1,245.19 an ounce.
Looking at Europe the equity markets also slumped sharply; euro STOXX 50 down 1.82%, CAC down 1.88%, DAX down 1.83% and the UK’s FTSE down 0.51%. Similar to the situation in the USA, the sell off appeared principally related to profit taking, as opposed to any particular negative economic calendar news. From the U.K. various credit metrics increased, which is not necessarily a good indicator of economic health; personal consumer credit rose to £1.7b on May, ahead of predictions of £1.4b, mortgage approvals and loans secured on property also increased. In the Eurozone, various soft data sentiment came in bullish, beating the forecasts; economic, business, industrial and services confidence readings all came in higher than expected, whilst overall consumer confidence came in right on the expectation, at -1.3% for the month of May.
Economic calendar events for June 30th, all times quoted are London GMT time
06:00, currency impacted EUR. German Retail Sales (YoY) (MAY). The forecast is for a rise to 2.8%, from the -0.9% registered in April.
07:55, currency impacted EUR. German Unemployment Change (JUN). The prediction is for a fall of -10k, from the -9k fall recorded in May.
07:55, currency impacted EUR. German Unemployment Rate s.a. (JUN). Overall YoY annual unemployment is expected to come in unchanged, at 5.7%.
08:30, currency impacted GBP. Gross Domestic Product (QoQ) (1Q F). The UK’s GDP is expected to show 0.2% growth in Q1 2017.
09:00, currency impacted EUR. Euro-Zone Consumer Price Index Estimate (YoY) (JUN). CPI is forecast to reduce to 1.2%, from 1.4% in May.
12:30, currency impacted CAD. Gross Domestic Product (YoY) (APR). Canada’s GDP is expected to rise to 3.4%, from the 3.2% figure published in March.
12:30, currency impacted USD. Personal Income (MAY). There’s a series of USA income and expenditure data revealed on Friday, their prediction is for a fall of 0.3%, from 0.4% in April.
12:30, currency impacted USD. Personal Consumption Expenditure Core (YoY) (MAY). Consumption is expected to fall to 1.4%, from 1.5% in April.
13:45, currency impacted USD. Chicago Purchasing Manager (JUN). A reading of 58 is expected, a fall from 59.4 in May.
14:00, currency impacted USD. U. of Michigan Confidence (JUN F). The reading is forecast to remain unchanged, at 94.5.