Good morning. Equity markets finished the Thursday session on a positive note with mixed economic drivers. GDP Data released during the day highlighted inconsistency in forecasting with 1.8% recorded for Q1. The market had factored in 1.7%. Initial Claims figures however rose for the period, with 429,000 recorded. This was well above initial estimates of 390,000. A surprising economic announcement was that of Pending Home Sales, with 5.1% posted in March. Economists highlighted that the result was a key driver in trader and market sentiment. Tomorrow’s economic data includes Personal Income, Personal Spending, and Chicago PMI. In other news, Japanese Central Bank Governor commented on the proposed increase in stimulatory measures. Rejecting the possibility of further measures to combat slow economic growth, the Bank of Japan cited the potential for a slingshot recovery scenario. Industrial Output posted its worst over fall, during the session.
On the equity market front, the Dow Jones rose 72 points to close at 12763. Software / Technology giant Microsoft reported a strong rise in earnings for the quarter with net income rising about $5.1 billion. Buoyant demand in the xbox business unit, was cited as a key contributing factor. In other corporate news, Motorola closed 2% higher, with the market reacting to encouraging earnings news.
On the currency front, the Aussie Dollar continued on its strong trend, with the currency breaking through 1.09. Trading at 1.0894, late in the session the currency took a breather ahead of GDP data. Commodity movements were contained early in the day, before a late rally in base metals and Gold. Oil contracted, pushing the greenback higher. Reacting to yesterday’s inflation forecast in Australia, economists began factoring in an early rise in rates. Volatile session for the Japanese Yen on Thursday, with economic uncertainty pushing the greenback in and out of positive territory. Key GDP data released during the day also painted a mixed picture with 1.8% recorded. This was slightly above initial forecasts, however the GDP deflator fell shy of the 2.4% expected. Markets also reacted to a rise in Initial Claims with 429,000 posted for the period. The Japanese Yen firmed on safe haven buying later in the session. The USDJPY traded at 81.55. EURUSD weakened considerably against the greenback on Thursday, with the currency touching 1.4793. Market fears that Spain could be the next country to receive an emergency bailout, plagued the currency late in the day. Portugal originally noted during the debt crisis, that they would not require the EU’s helping hand. The adjustment in sentiment and a rise in debt borrowing costs pressured the Portuguese economy, forcing the country to receive an EU package. Jitters over the crisis continued to force the Euro into a downward trend.