Financials continue to underperform the rest of the market. The sector's 0.8% loss comes amid weakness in diversified bank stocks, but also from investment banks. The latter space has been hurt by news that Goldman Sachs (GS 155.91, -4.26) has been accused by a Senate subcommittee for lying in a testimony during 2010. Meanwhile, Deutsche Bank (DB 60.35, -1.03) and Credit Suisse (CS 44.11, -0.55) were both downgraded by analysts at Societe Generale.
The Dow and the S&P 500 have made an upward push that has them at session highs. The effort has actually left the Dow only a few points away from the flat line. The Nasdaq continues to lag its counterparts, though.
Crude oil prices and gold prices have rallied to gains of more than 1% amid the dollar's downturn. Oil prices were recently quoted at $108.40 per barrel while gold is trading hands at $1474 per ounce.
The euro erased its decline against the dollar on speculation the sovereign-debt crisis in nations including Portugal and Greece will be contained.
The euro erased its drop as European Union Economic and Monetary Affairs Commissioner Olli Rehn said he’s “quite confident” the financial-aid package being negotiated for Portugal will result in the debt crisis being contained.
The dollar fell to its lowest level this month against the yen as U.S. initial jobless claims unexpectedly rose and producer prices advanced at a slower pace, encouraging the Federal Reserve to keep borrowing costs low. The euro slid earlier as concern Greece will have to restructure its debt pushed its bond yields to record highs.
“The developments in the euro-zone debt markets took some attention early in the day, but didn’t continue, so the euro began to move higher,” said Steve Barrow, head of G-10 currency research at Standard Bank Plc in London. “The U.S. data this morning didn’t help the dollar along any further.”
Stocks continue to drift deeper into negative territory, but they remain well above session lows.
Despite the broad market's lackluster action, JB Hunt Transportation (JBHT 47.57, +2.97) shares set a fresh 52-week high on the back of a better-than-expected earnings report and upside guidance, which comes in the face of elevated oil prices. The stock has eased off of its session high, but continues to sport a gain of almost 7%.
Strength in shares of JBHT have helped prop up the company's peers. In turn, the Dow Jones Transportation Index has put together a 0.2% gain.
EUR/JPY probes offers between Y120.00/10 that are able to capp the recovery off the lows at Y119.3. Cross currently trading around Y120.01. Support seen back at Y119.50 ahead of Y119.30. Above Y120.10 to open a move toward Y120.50/60.
EUR/USD $1.4535, $1.4500, $1.4450, $1.4200
USD/JPY Y83.00, Y83.50, Y83.75, Y84.00, Y84.25, Y84.50, Y85.00
AUD/USD $1.0550, $1.0500, $1.0480, $1.0450, $1.0400, $1.0320
U.S. stocks were expected to take a hit early Thursday, as the world's largest banks fell and dragged on equity markets, and the Labor Department reported an expected increase in jobless claims.
Late Wednesday, the Senate issued a 600-page report slamming Goldman Sachs as a "case study" of the recklessness and greed.
In premarket trading, Goldman Sachs (GS, Fortune 500) shares fell 1.2%, Bank of America (BAC, Fortune 500) fell 0.5%, and JPMorgan Chase (JPM, Fortune 500) shares were down 0.4%.
Economy: The Labor Department reported that first-time jobless claims increased by 27,000, to a weekly total of 412,000. The number came in higher than expected.
Wall Street was expecting initial claims to have totaled 385,000 claims last week.
The U.S. Bureau of Labor Statistics reported that the Producer Price Index rose 0.7% in March. Producer prices were expected to have risen 1.1% in March.
Companies: Google (GOOG, Fortune 500) reports its quarterly results after the close. Analysts expect the Internet search company's first-quarter profit will jump to $8.10 a share, compared to the $6.76 a share last year.
Google's stock was near its September 2007 levels, falling 9% since Eric Schmidt announced in January that he'd be stepping down as CEO.
USD/CAD triggered stops above C$0.9660 to print a session high on C$0.9670 before profit take selling emerged to drag rate back to C$.09645/50. Break above $0.9680 to open potential for a move toward C$0.9800. Traders earlier suggested that a break of C$0.9710 brings offers and stops there.
The euro tumbled on concern Europe’s most indebted nations including Greece may be forced to reorganize their debt payments to bondholders.
The euro weakened against the dollar, yen, Swiss franc and pound.
The Japanese currency strengthened after German Finance Minister Wolfgang Schaeuble told Die Welt newspaper that Greece may need to negotiate with creditors should an audit in June question its ability to make debt repayments. Portuguese and Greek bonds slumped, driving yields to record highs.
“The comments from Schaeuble are critical and represent a change in view that some form of debt restructuring cannot be ruled out,” said Michael Derks, head of currency strategy at FXPro Financial Services. “There seems to be a greater focus on these peripheral issues and that’s dragging the single currency down.”
The New Zealand dollar strengthened to a five-month high against the greenback after demand rose at a NZ$700 million ($556 million) auction of government bonds.
Australia’s dollar reversed earlier losses as Asian stocks advanced, boosting demand for higher-yielding assets.
Australia’s dollar weakened earlier after leaders of the so-called BRICS nations said rising commodity prices posed a threat to global growth and the Monetary Authority of Singapore stepped up its fight against inflation.
EUR/USD initially rose to the highs on $1.4480, but Schaeuble's comments dragged the rate down to session lows around $1.4362. Later rate recovered to $1.4395.
GBP/USD printed session lows near $1.6300 - at $1.6285 before back to $1.6335.
USD/JPY weakened from Y83.80 to Y83.00. rate failed to break the figure that spurred the retreat to Y83.16.
The Labor Department is scheduled to release its latest reports on first-time unemployment claims and producer prices for March at 1230 GMT. Analysts expect initial claims to have edged higher by 3,000 to 385,000 claims last week, while producer prices are expected to have risen 1.1% in March.
GBP/USD recovers to offers around $1.6320, while EUR/GBP holds below support at stg0.8820. Above $1.6330 the rate can extend move toward $1.6350 (76.4% $1.6366/1.6287).
EUR/USD fell to the lows around $1.4363 (200-hma). Rate currently trades around $1.4380/85. Further demand seen into $1.4350 with stops below.
EUR/JPY broke of support at Y119.70 and fell to Y119.30. Bids earlier reported here. A break below to allow for a deeper move toward Y119.20 ahead of Y118.80/70. Resistance noted now at Y119.70/80.
USD/CAD currently challenges stops placed at C$0.9660. The rate seen messy if breaks above C$0.9710. Rate currently trades around C$0.9658.
GBP/USD back below $1.6300 to print a new lows around $1.6285. Support remains at $1.6280 ($1.6281 76.4% $1.6355/1.6366), a break to open a deeper move toward $1.6255/45. While rate can hold above leaves open a recovery, with resistance seen at $1.6350/55.
The dollar hit a fresh 16-month low against a basket of currencies on Thursday as expectations grew the Federal Reserve would keep its loose monetary policy, widening interest rate differentials in favour of higher-yielding currencies.
The tone for the dollar remained weak after Wednesday's U.S. retail sales data and the Fed's Beige Book report did nothing to change the view the central bank would keep its $600 billion asset buying programme until June.
In contrast, the European Central Bank is expected to follow up its April interest rate hike with more tightening later this year, a factor keeping the single currency near a 15-month peak against the dollar.
The dollar index fell to 74.676, bringing its losses this year to around 5%.
"The fact that the U.S. recovery is continuing will not become a trigger point for Fed policy," said Masafumi Yamamoto, chief FX strategist at Barclays Capital.
"Unemployment, although improving, is still relatively high and the Fed is not going to bring forward the end of its loose monetary policy. The dollar is finding no fresh factors to rise on."
GBP/USD triggered demand interest between $1.6320/15 and currently challenges $1.6300. Rate gets some support from EUR/GBP extending its break below stg0.8860 to stg0.8834. Next support in the cross seen at stg0.8825/20. For cable support seen at $1.6280 ($1.6281 76.4% $1.6255/1.6366). Resistance now seen at $1.6350/55.
EUR/JPY continues to back off from earlier highs at Y121.36. Cross went through its Asian base at Y120.19 to current Y120.00. Bids have been reported in place down to Y120.00, a break to allow for a deeper move toward Y119.80/70.
USD/JPY breaks below overnight base at Y83.20 to extend lows to Y83.11. Rate earlier broke under support at Y83.30. Rate tries to bounces back but no great progress seen. A break of Y83.00 to open a deeper move toward Y82.75/70.
The euro edged to a 15-month high against the dollar.
The euro was lifted by reported demand from sovereign names looking to recycle dollar proceeds as the single currency remained supported by the prospect of further rate rises in the euro zone while policy stays loose in the United States and Japan.
Commodity-linked currencies such as the Australian and New Zealand dollars also rose, buoyed by a recovery in commodity prices and stocks.
An Australian sentiment index rose 1.2 percent to 105.3 this month from March, according to a Westpac Banking Corp. and Melbourne Institute survey released today.
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