Moderate risk-aversion was witnessed across the financial markets this Thursday, with looming trade woes and Brexit uncertainty amid mixed headlines. The recent report suggests that the EU is expecting the British House of Commons’ support for even a three-month Brexit extension request submitted by the UK PM Theresa May.
Meanwhile, the Dollar attempted a tepid bounce across its main competitors, after the sharp fall on news that the Federal Reserve sees no rate hikes this year and just one rate hike during 2020. However, the Treasury yields continued to trade weaker, having capped the relief rally in the USD/JPY pair at 110.75. EUR/USD maintained the gains above 1.1400 but retracted from the highs in the mid-1.1400s, shedding some ground.
Markets today remain focused on the key event risks concerning the British pound, as the UK docket offers the retail sales report at 09:30 GMT ahead of the BOE monetary policy decision and the release of the minutes at 12:00 GMT. It’s widely expected that the BOE will keep the monetary policy settings unchanged. However, the UK central bank could disappoint the doves by hinting towards a rate hike as the next policy move, in the wake of the recent improved fundamentals and Brexit extension. All eyes will also remain on the Brexit developments, as the UK PM May heads to Brussels to secure the EU support on the short Brexit extension.
In the NA session, the usual weekly jobless claims from the US will be reported at 12:30 GMT alongside the releases of the Philly Fed manufacturing index. At 15:00 GMT, the Eurozone consumer confidence gauge will be published that is likely to little impact on the EUR markets.
Oil eased away from 2019 highs reached earlier in the session on Thursday, but markets remain relatively tight amid supply cuts led by producer club OPEC and U.S. government sanctions against Iran and Venezuela. U.S. WTI crude futures were at $60.12 per barrel, while International Brent crude oil futures were at $68.52 a barrel.
Gold prices rose on Thursday, reaching over the $1320.00 level, as the Fed left rates unchanged amid concerns over slowing growth both domestically and abroad and abandoned projections for any interest rates hikes this year. The Fed was more dovish than markets expected and was cited as supportive for the safe-haven gold. Gold is highly sensitive to interest rates, as lower rates tend to pressure the dollar and increase investor interest in non-yielding bullion.