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From Europe to the United States, market drivers ranged from unemployment, inflation-related concerns, earnings and alarming losses to inventories of energy, particularly natural gas. The USD managed to stop its Wednesday’s downtrend to advance anew on Thursday.
Risk turned off on Thursday leading the USD to reap the most out of it. The dollar weaker yesterday, but it managed to appreciate against most major rivals, except safe-haven CHF and JPY.
Houston’s pension fund for its firefighters said Thursday it bought $25 million worth of bitcoin and ether for its defined-benefit plan’s portfolio, the latest move by an institutional investor into digital assets.
The Wall Street Journal reported that this move comes as bitcoin powered back to a record above $66,000 earlier this week.
Economic Data
There were 290,000 initial claims for unemployment benefits in the US during the week ending October 16, the data published by the US Department of Labor (DOL) showed on Thursday. This reading followed the previous print of 296,000 (revised from 293,000) and came in better than the market expectation of 300,000.
October Consumer Confidence declined in the Eurozone. The European Commission said Thursday that its measurement index of consumer confidence in the Eurozone declined to minus 4.8 in October from minus 4.0 in September.
Economists polled by The Wall Street Journal had forecast a reading of minus 5.0. The fresh reading comes amid rising inflation and economic recovery slowdown.
Amid a worldwide energy shortages, U. S. natural gas inventories climbed to 92 billion cubic feet. The U.S. Energy Information Administration reported on Thursday that domestic supplies of natural gas climbed by 92 billion cubic feet for the week ended Oct. 15.
Following the data, November delivery of natural gas extended decline, trading down 11.5 cents, or 2.2%, at $5.062 per million British thermal units. Prices were at $5.107 shortly after the data was announced.
Other Developments
There was no certain catalyst behind the retreating risk appetite although inflation-related concerns constitute one part of the whole economic scene.
The closely watched 10-year US Treasury yield hit the high of 1.683%, finishing the day around 1.67%. The EUR/USD pair pulled lower and trades near a critical Fibonacci support level at 1.1615. GBP/USD failed once again around 1.3830, and settled in the 1.3780 price zone.
The AUD/USD retreated from a fresh 3-monht high and settled around 0.7460, while USD/CAD bounced to the 1.2370 price zone.
After Evergrande’s efforts to sell its stake of 50 per cent of EPS to rival Hopson Development had collapsed, depriving it of valuable cash to ease the pressure on its balance sheet. Time is actually running out for China’s Group to avoid default and the company is cracking under the weight of a £221billion debt.
Treasury yields were slightly higher Thursday as U.S. weekly jobless benefit claims fell with a reading of initial jobless claims for the week ended Oct. 16 which dropped by 6,000 to pandemic low of 290,000.
Australia’s Reserve Bank made a multibillion-dollar loss on its securities and foreign exchange transactions during last financial year as unrealised valuation losses. The RBA recorded a $4.3 billion accounting loss in the 2020-21 financial year.
The RBA admitted higher interest rates could further hit its bottom line while beefing up the federal budget with a $2.7 billion dividend payment.
The Reserve Bank has recorded one of the biggest financial losses in its history. It is the bank’s second largest loss, only surpassed by a $4.9 billion loss in 2010-2011.
