General Market Comment
US indices closed mixed on Thursday. Shares in the Food, Beverage & Tobacco (-1.83%), Pharmaceuticals, Biotechnology & Life Sciences (-1.57%) and Telecommunication Services (-1.14%) sectors lost momentum while shares in the Semiconductors & Semiconductor Equipment (+5.12%), Automobiles & Components (+1.98%) and Transportation (+1.58%) sectors gained traction. On the economic data front, initial jobless claims decreased to 199k in week ended January 19th (estimated 218k) from 212k in the previous week. Continuing claims declined to 1.713M in week ended January 12th (forecasted 1.73M) compared to 1.737M in the prior week. In other news, the Markit US manufacturing PMI increased to 54.9 in a preliminary estimate in January (expected 53.5) from 53.8 in December. The Markit US services PMI slightly decreased to 54.2 in a preliminary estimate in January (estimated 54) compared to 54.4 in the prior month while the Markit US composite PMI slightly improved to 54.5 in a preliminary estimate in January vs. 54.4 in the previous month. Also, the Bloomberg consumer comfort index declined to 57.4 in week ended January 20th from 58.1 a week earlier. Finally, the Leading index decreased by 0.1% in December, in-line with forecasts, compared to an improvement of 0.2% in November. The S&P 500 (2,642.33) stays above its 20d moving average (2,568.53 – positive slope) and 50d moving average (2,616.20 – negative slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Thursday. On the economic data front, initial jobless claims decreased to 199k in week ended January 19th (estimated 218k) from 212k in the previous week. Continuing claims declined to 1.713M in week ended January 12th (forecasted 1.73M) compared to 1.737M in the prior week. In other news, the Markit US manufacturing PMI increased to 54.9 in a preliminary estimate in January (expected 53.5) from 53.8 in December. The Markit US services PMI slightly decreased to 54.2 in a preliminary estimate in January (estimated 54) compared to 54.4 in the prior month while the Markit US composite PMI slightly improved to 54.5 in a preliminary estimate in January vs. 54.4 in the previous month. Also, the Bloomberg consumer comfort index declined to 57.4 in week ended January 20th from 58.1 a week earlier. Finally, the Leading index decreased by 0.1% in December, in-line with forecasts, compared to an improvement of 0.2% in November.
The Euro was bearish against most of its major pairs with the exception of the AUD. The ECB kept its main refinancing rate at 0%, as expected. The institution said that it will keep rates unchanged to at least through summer of 2019, and that it intends to continue reinvesting in full the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time past the date when it starts raising the key ECB interest. On the statistic front, Euro-zone PMI composite index fell to 50.7 (51.4 expected) in first estimation in January, a 66 month low, from 51.1 the month before. In Germany, the PMI services index was 53.1 (52.1 anticipated) in first reading in January, a two-month high, vs 51.8 in December.
The Australian dollar was lower against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (MAR 19) was about flat to $53.1. The contract was above its 20D MA (@ $50.13) and above its 50D MA (@ $51.42). The US Department of Energy reported that, for the week ended 18 January, crude oil inventories increased 7970k barrels compared to the previous week.
Gold was about flat to $1281. The precious metal was below its 20D MA (@ $1286) and above its 50D MA (@ $1258).
Copper Future (MAR 19) on Comex was about flat to 264.6c/lb. The contract was below its 20D MA (@ 265.36c) and below its 50D MA (@ 271.27c). In Europe, the London Metal Exchange reported its copper inventories increased 100 tons to 145675 tons