|Tentative||EUR||Italian Bank Holiday|
|09:30||GBP||Manufacturing Production m/m||0.7%||0.1%|
|09:30||GBP||Goods Trade Balance||-11.3B||-11.5B|
|13:30||USD||Average Hourly Earnings m/m||0.0%||0.3%|
|13:30||USD||Non-Farm Employment Change||261K||198K|
|15:00||USD||Prelim UoM Consumer Sentiment||98.5||99.0|
|01:30 (Dec 9th)||CNY||CPI y/y||1.9%||1.8%|
|01:30 (Dec 9th)||CNY||PPI y/y||6.9%||5.9%|
Asian markets finished Thursday mixed, but began to stabilize after the heavy selling action seen on Wednesday. A recovery in the technology sector overnight in the U.S. helped improve sentiment, but there were still pockets of weakness in South Korea and mainland China. Japan’s Nikkei made the best gains, advancing 1.5% to partially erase the nearly 2% drop from the previous session. The Yen is beginning to weaken versus the U.S. dollar once again, and this should help support Japanese equities, perhaps allowing the Nikkei to retake the 24,000 level before years-end. Mainland China remained weak, with the Shanghai Composite falling 0.7% as investors continue to worry about the state of the Chinese economy. Australia’s S&P/ASX 200 rebounded and gained 0.5% as the miners bounced back from their losses in the previous session.
European markets got off to a strong start on Thursday, but interest began to wane mid-morning, and markets struggled to hold onto gains by the afternoon. By the end of the day the markets had given back gains, and the Stoxx Europe 600, the broadest measure of European equities, was holding to a slim gain of 0.02%. Both the CAC 40 in France and the DAX advanced, gaining 0.2% and 0.3% respectively. Spain’s IBEX outperformed the region as it climbed 0.8% higher. In London, the FTSE fell hard after rumors emerged that a Brexit deal could be signed as early as this weekend. Those rumors caused the Pound to spike higher, weighing heavily on British equities.
U.S. markets gained early Thursday and continued pushing higher throughout the day, with risk appetite among investors remaining strong. There is also continuing optimism now over the tax reform bill, with expectations that it will be able to pass the House and Senate without the controversial Alternative Minimum Tax inclusion. The strongest gains came from the technology, industrials and materials sectors as all three rebounded on the renewed optimism over the tax reform legislation. Today will see the release of the latest non-farm payrolls numbers, and the data is likely to determine the course of trading for the day.
The cryptocurrency markets continue to shock us, Bitcoin in particular, as the often maligned, but now seemingly mainstream cryptocurrency gained an astounding 25% again on Thursday. The move took Bitcoin from the already massive $14,000 level at the beginning of the Asian session, to above $17,000 by the end of the day. As in the previous session, the monumental rally was mostly contained to Bitcoin, with other alt-coins putting in a mixed performance. Even those that made gains, such as Ethereum, didn’t move up by more than 5%, and some fell by more than 4%. It’s fairly obvious that institutional money is moving aggressively into Bitcoin ahead of the release of Bitcoin futures on the CBOE and CME, and we can only wonder what will happen to the price of Bitcoin following the launch of futures.
The pair surged higher on Thursday, reversing three sessions’ worth of downside in a single session as traders reacted to news that the Brexit negotiations could lead to an agreement as early as this weekend. We expect the pair to continue rising today in anticipation of a weekend Brexit agreement, but Monday could see some extreme downside if an accord fails to materialize. The 1.3525 level is a good one to watch for resistance, but a move to the 1.3600 level is a possibility ahead of the weekend.