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17/11/2023 - 08:36 UTCThe U.S. dollar index (USDX) showed very little movement on Thursday, ending the session almost unchanged right above the 104.0 mark. Some price action was observed after the release of U.S. jobless claims which rose more than expected last week, indicating a cooling labor market and favoring a scenario where the Fed begins to ease its monetary policy.
According to the CME Group Fed Watch Tool, the possibility that rates will remain unchanged in December fell from 100% on Thursday to 99.8% on Friday while the likelihood of a rate hike is at 0.02%.
The main U.S. stock indices painted a mixed picture on Thursday, with the US 500 up by 0.17%, the US 30 down by 0.02% and the US tech 100 gaining 0.13% on its value. Much of the pressure came from weak earnings results as Cisco Systems tumbled following a decrease in yearly revenue and profit forecasts due to slow demand. Also, Palo Alto shares collapsed as forecasts for second-quarter billings missed expectations.
Gains were observed in some of the main European equity indices, such as the Germany 40 that is up by more than 3% so far this week and the France 40 that gained around 1.5% as of 08:00 AM GMT Friday, as global inflation levels surprised investors to the downside, raising hopes that monetary tightening may be reaching its end.
A sharp decline in oil prices adds further pressure on inflation levels, as WTI is seen down by more than 5% so far this week and down by almost 20% since the beginning of October. The focus turns to the final reading of the eurozone’s October CPI that could confirm the downtrend in inflation with forecasts showing a decline of 2.9% on an annual basis.
Among the main highlights for Friday are the current account and annual inflation data from the eurozone as well as building permits and housing starts from the U.S. On the earnings front, Jumia Technologies and Bionano Genomics are scheduled to release their quarterly reports.
The EUR/USD pair traded between gains and losses on Thursday and ended the session almost unchanged with minor losses of 0.01%.
The US Bureau of Labor Statistics revealed that unemployment claims for the last week rose the most in the last three months while Industrial Production plunged. US export and import prices cooled down.
On the Eurozone front, the European Central Bank President Christine Lagarde did not provide any comments on monetary policy.
Ahead in the economic calendar, the EU’s docket will feature annual, and a speech of the ECB’s President Lagarde. In the US, housing data, Building Permits, and Fed speakers are expected to offer fresh clues to EUR/USD traders.
Gold prices rose more than 1% on Thursday and were headed for a strong weekly performance as more weak U.S. economic data spurred bets that the Federal Reserve was done raising interest rates.
The precious metal also saw some safe-haven demand, as weak economic results from Japan and the euro zone pushed up concerns over a possible global recession. But the biggest boost to the yellow metal came on Thursday, after data showed that U.S. jobless claims grew more than expected for a fourth straight week, signalling more cooling in the labour market.
Oil prices settled lower Thursday, to remain on course for a fourth-straight weekly slump as rising U.S. crude stockpiles and signs of easing China demand weighed on sentiment. The WTI contract on iFOREX platform ended the session 4.08% lower at $73.257 per barrel.
Chinese refiners processed lower amounts of oil in October than the prior month, adding to concerns about the demand outlook for the world's largest oil importer. Economic data, meanwhile, pointed to weakness in Europe also weighed on the demand outlook.
US stock futures traded in a mixed fashion on Thursday following a mixed session for major benchmark averages as investors began to ease off the pace of this month's surge. US 500 and US 30 rose 0.17% and 0.13% respectively while US 30 ended the day 0.02% lower.
Walmart, the largest retailer in the U.S, lifted its annual guidance, forecasting adjusted EPS of $6.40 to $6.48, but that was short of estimates for EPS of $6.50 and offset quarterly results that beat on the top and bottom lines. Its shares fell more 8%. Cisco Systems stock fell nearly 10% after the company cut its full-year revenue and profit forecasts in a sign that demand for its networking equipment was slowing.
Ahead in Friday's trade, investors will be closely monitoring housing starts and building permits data, as well as speeches from the Fed's Goolsbee.
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