The USA weekly unemployment claims came in at 309K on Thursday, an improvement on the predicted 319K from the analysts polled, however, rather disappointedly these figures still cannot be trusted as certain states’ data still appears to be in a mess. The final GDP figure for USA GDP growth came in at 0.6% for the quarter, annualized to 2.48%. Pending home sales completed the last of the three main high impact news events for the USA on Thursday, the print came in below expectations at -1.6% fall.
California is still having problems regarding its unemployment claims number. Gov. Brown earlier this week ordered the state to pay benefits to applicants before it’s determined whether or not they’re eligible. So the number of weekly U.S. claims could rise or fall depending on when the backlog-clearing strategy began. It would be good to know when the ‘real’ numbers are back on stream as this important data set is rendered useless in its current form. Particularly given that the last NFP print was disastrous, a low print of circa 169K jobs created and the lowest employment participation rate (at 63.3%) for thirty five years.
Market overview
The DJIA and the SPX broke their recent losing streak to close up on the day on Thursday, the DJIA closed up 0.34%, the SPX up 0.40% and the NASDAQ up 0.81%. European equity indices experienced mixed fortunes; the STOXX closed down 0.17%, the FTSE up 0.05%, the CAC down 0.14%, the DAX down 0.08%. The Italian index fell 1.21% on concerns regarding the current government and threats from one party to potentially being down the current government.
Commodities enjoyed a positive day on Thursday, ICE WTI oil finished the day up 0.22%, NYMEX natural up 0.59% on the day, COMEX gold down 0.91% on the day at $1324.10 per ounce, COMEX silver down 0.55% at $21.77 per ounce.
Equity index futures for the European markets are mixed, FTSE up 0.05%, CAC down 0.14%, DAX flair whilst the Italian MIB equity index future is down 1.21% at the time of writing.
Forex focus
The yen dropped by 0.6 percent to 98.89 per dollar late in the New York session, after reaching 100.61 on Sept 11th, the weakest level seen since July 22. Japan’s currency lost 0.3 percent to 133.52 per euro. The dollar strengthened 0.3 percent to $1.3489 per euro. The yen weakened for the first time in five days versus the dollar as speculation Japan’s government will cut corporate taxes increased stock gains whilst reducing demand for the relative safe haven of the currency.
Sterling dropped by 0.3 percent to $1.6041 after climbing to $1.6096, the highest level since Sept 19th. Britain’s gross domestic product increased by 0.7% for the quarter and 1.3 percent in the second quarter from a year earlier, the Office for National Statistics said in London, compared with an initial reading of 1.5 percent.
The New Zealand dollar rebounded from a one-week low versus the greenback as Asian stocks advanced, underpinning demand for higher-yielding currencies. The currency rose 0.6 percent to 82.91 U.S. cents after dropping to 82.17 cents yesterday, the lowest level seen since Sept 18th.
Fundamental policy decisions and other high impact news events that could affect sentiment on Friday 27th September
Europe’s PMI is published with the expectation that it prints at circa 50. Thereafter Mario Draghi is due to give a speech which given his recent speeches may have a neutral impact on European markets, personal spending and income details are printed for the USA.
The revised university of Michigan sentiment index is predicted to come in at 78.2. The ‘Previous’ listed is the ‘Actual’ from the Preliminary release and therefore the ‘History’ data will appear unconnected. There are 2 versions of this data released about 15 days apart – Preliminary and Revised. The Preliminary release is the earliest and thus tends to have more impact.
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