General Market Comment
US indices closed higher on Thursday with the Dow closing 400 points higher as tech leads the market rebound. Shares in the Automobiles & Components (+5.37%), Software & Services (+4.14%) and Retailing (+4.12%) sectors pushed the indices higher. On the economic data front, initial jobless claims reached 215k in week ended October 20th, in-line with estimates, from 210k in the previous week. Continuing claims slightly diminished to 1.636M in week ended October 13th (forecasted 1.644M) compared to 1.641M in the prior week. In other news, wholesale inventories improved by 0.3% MoM in a preliminary estimate in September (expected 0.5%) vs. 0.9% in August. Durable goods orders increased by 0.8% in a preliminary estimate in September (estimated -1.5%) from a rise of 4.6% a month earlier. In addition, pending home sales improved by 0.5% MoM in September vs. an expected flat level, compared to a decrease of 1.9% in August. Finally, the Bloomberg Consumer Comfort index slightly decreased to 60.1 in week ended October 21st vs. 60.8 in the prior week. The S&P 500 (2,705.57) remains at levels below both its 20d moving average (2,814.27 – negative slope) and 50d moving average (2,860.30 – negative slope).
European markets are expected to start on a negative note.
Foreign Exchange
The US dollar was bullish against most of its major pairs on Thursday with the exception of the AUD. On the economic data front, initial jobless claims reached 215k in week ended October 20th, in-line with estimates, from 210k in the previous week. Continuing claims slightly diminished to 1.636M in week ended October 13th (forecasted 1.644M) compared to 1.641M in the prior week. In other news, wholesale inventories improved by 0.3% MoM in a preliminary estimate in September (expected 0.5%) vs. 0.9% in August. Durable goods orders increased by 0.8% in a preliminary estimate in September (estimated -1.5%) from a rise of 4.6% a month earlier. In addition, pending home sales improved by 0.5% MoM in September vs. an expected flat level, compared to a decrease of 1.9% in August. Finally, the Bloomberg Consumer Comfort index slightly decreased to 60.1 in week ended October 21st vs. 60.8 in the prior week.
The Euro was bearish against most of its major pairs with the exception of the GBP. The ECB kept its main refinancing rate at 0%, as expected. Mario Draghi highlighted that recent data had been weaker than anticipated, reiterated the ECB confidence in inflation and affirmed that risks related to economic growth remain “broadly balanced”. German IFO business climate index for expectations fell to 99.8 in October from 100.9 a month earlier. Economists anticipated 100.4.
The Australian dollar was higher against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (DEC 18) was about flat to $66.97. The contract was below its 20D MA (@ $71.63) and below its 50D MA (@ $69.79).
Gold was about flat to $1231.7. The precious metal was above its 20D MA (@ $1212) and above its 50D MA (@ $1204).
Copper Future (DEC 18) on Comex was about flat to 275.6c/lb. The contract was below its 20D MA (@ 278.3c) and above its 50D MA (@ 273.51c). In Europe, the London Metal Exchange reported its copper inventories decreased 2650 tons to 149575 tons.