- US initial jobless claims 205K vs 215K estimate
- US Q3 2023 GDP (third reading) +4.9% vs +5.2% expected
- Philadelphia Fed Business index for December -10.5 vs -3.0 estimate
- Canada October retail sales +0.7% vs +0.8% expected
- Angola announces withdrawal from OPEC
- Baker Hughes US oil rig count -3
- KC Fed manufacturing index -4 vs -3 prior
Markets:
- Gold up $15 to $2043
- US 10-year yields flat at 3.89%
- WTI crude down 23-cents to $73.98
- S&P 500 up 0.9%
- AUD leads, USD lags
The late-year slide in the US dollar continued again on Thursday. One of the catalysts was the softness in core PCE in the Q3 revisions to the PCE report, down to 2.0% from 2.3%. The return to the magic 2.0% number comes ahead of tomorrow's PCE report and frames a potential miss. The more-recent jobless claims number was strong but Philly Fed manufacturing numbers were weak. On net, the impulse was to sell the dollar and that continued even as Treasury yields recovered early losses.
USD/JPY was soft before US trading as yesterday's post-BOJ pop unwound. The momentum continued after the data in a quick60 pips drop to 142.00. It struggled to get below that level and consolidated.
One currency that didn't run out of momentum was the euro as it rose above 1.1000 late and will now challenge (once again), the November high of 1.1017. If you keep on knocking, eventually they have to let you in. There's a nice inverted head-and-shoulders pattern on the chart; could that mean a low liquidity pop over the holidays? Liquidity will be thin from here but it will set up an interesting 2024 in any case.
The commodity currencies were winners again as AUD and CAD both stay hot on optimism about the 2024 global economy. Both are set to finish at the best levels of the day with AUD particularly strong. It rose above 0.6800 for the first time since July and not much is standing in the way of the June/July double top at 0.6900.
Equities managed to erase most of the sharp decline from yesterday. It was a choppy session even as the year winds down but the bulls managed to retake the upper hand and mitigate the nasty bearish outside reversal from yesterday.
Happy solstice to all those who celebrate :)
