The IHS Markit flash eurozone manufacturing purchasing managers index rose to a 12-month high of 49.1 in February from 47.9 in January, while the services PMI reached a 2-month high of 52.8 from 52.5. Economists polled by FactSet expected a 47.5 reading for manufacturing and a 52.2 reading for services. Any reading below 50 indicates worsening conditions. The euro was stronger on the day, at $1.0819 vs. $1.0785 on Thursday.
Private sector PMI numbers put the majors in focus later today. Expect plenty of volatility as risk appetite takes another hit.
It was a Risk-off Thursday, with the S&P500; down 0.5% heading into the close and Europe’s Stoxx600 closed 0.9% lower. US 10y yields slipped 5bps to 1.52%, levels not seen since early February.
Gold markets initially pulled back a bit during the trading session on Thursday, but then shot higher as we got close to the $1600 level. Ultimately, this is a market that is trying to break out to the upside and therefore continue the longer-term uptrend.
The US dollar has rallied a bit during the trading session on Thursday, reaching towards the ¥112 level. The ¥112 level is an area where we had sold off rather drastically, and most clearly the market is a bit overbought.
The British pound broke down a bit during the trading session on Thursday, slicing through the 1.29 level again. The market continues to struggle against the greenback in general, but it is approaching support.
The British pound initially tried to rally during the trading session on Thursday but gave back the gains to form a less than impressive candlestick. Ultimately, it looks as if the market is ready to consolidate more than anything else.
The Euro initially fell during the trading session again on Thursday but is starting to rally a bit as we had filled the gap from a longer-term charts.
The Australian dollar continues to fall apart, showing signs of weakness going forward. The market as well below the 0.67 handle, so therefore it makes sense that we continue towards the bottom of the overall consolidation area.
London stocks struggled for direction on Thursday, as investors assessed fresh coronavirus risk, with Smith & Nephew PLC standing out with gains after upbeat results.
Based on the early price action and the current price at $1617.70, the direction of the April Comex gold market the rest of the session on Thursday is likely to be determined by trader reaction to $1611.80.
Based on the early price action, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to yesterday’s close at 1.0807.
We’ve said for years that gold is not a safe-haven asset, it’s an investment and we’re seeing more and more evidence of this as rates fall or are expected to decline all around the world, and gold prices rise.
The AUD/USD is likely to remain under pressure on Thursday as traders continue to price in a future RBA rate cut.