· The U.S. dollar gave up earlier gains on Thursday after two lawmakers were reported to seek changes to proposed legislation to overhaul the U.S. tax code in order to garner their support.
The dollar index against a basket of six major currencies .DXY was unchanged on the day at 93.431, after earlier rising to 93.759.
· The ECB kept its key rates on hold and also held rigidly to its script on its intentions for next year - despite pressure from some policymakers to acknowledge explicitly the strength of the euro zone recovery and more closely follow the U.S. Federal Reserve’s tightening trend.
The euro rose to a day high of $1.186 after the bank raised its growth forecasts from this year through to 2019, before weakening back to $1.178, down 0.38 percent on the day.
· The European Central Bank (ECB) kept its monetary policy unchanged Thursday, while rising its growth forecasts for the region.
The ECB's interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at zero, 0.25 and -0.40 percent respectively.
On Thursday, the central bank confirmed its plan to extend its quantitative easing program in the new year, but with lower monthly purchases.
In October, the ECB announced a reduction in the level of its monthly purchases from 60 billion euros ($71 billion) to 30 billion euros. At that time, the bank also said that its quantitative easing program would stay in place until September 2018. It kept the door open to further extensions in the program, depending on the economic conditions of the euro area.
In particular, the central bank has struggled to bring up core inflation to its aim of about 2 percent. In the last macroeconomic projections, the ECB said that headline inflation would be 1.5 percent in 2017 and 1.2 percent in 2018.
On Thursday, the bank revised upwards its inflation forecast for next year to 1.4 percent.
The ECB, which targets inflation at just below 2 percent, sees price growth slowly accelerating over the coming years and hitting 1.7 percent in 2020, ECB President Mario Draghi told a news conference.
In terms of growth, the ECB estimated in September a GDP (gross domestic product) rate of 2.2 percent for this year and 1.8 percent in 2018. This has now been revised upwards to 2.4 percent in 2017 and 2.3 percent in 2018.
"The economic expansion in the euro area continued in the third quarter of 2017, when real GDP increased by 0.6 percent quarter-on-quarter," ECB President Mario Draghi said following the meeting.
· U.S. retail sales increased more than expected in November as the holiday shopping season got off to a brisk start, pointing to sustained strength in the economy that could pave the way for further Federal Reserve interest rate hikes next year.
· The economic outlook was also bolstered by other data on Thursday that showed the number of Americans filing for unemployment benefits dropping to near a 44-1/2-year low last week.
In a separate report, the Labor Department said initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 225,000 for the week ended Dec. 9. That was the lowest reading since mid-October when claims dropped to 223,000, a level not seen since March 1973.
Last week marked the 145th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller.
· U.S. import prices surged in November amid an increase in the cost of imported petroleum products, leading to the largest year-on-year increase in seven months.
· Though congressional Republicans had reached a deal on final tax legislation on Wednesday, Republican Senators Marco Rubio and Mike Lee said on Thursday they would not get behind the bill without changes to child tax credits.
As the fast-moving Republican tax revamp has evolved, it has tilted increasingly toward benefiting businesses and wealthy taxpayers, a trend that aides were saying privately is a growing concern for some lawmakers. Equity investors worry that stocks could tumble if the bill fails.
· President Donald Trump’s eldest son asked a House of Representatives committee on Tuesday to investigate possible leaks of information about his Dec. 6 interview with lawmakers, as congressional probes of Russia and the 2016 election picked up steam ahead of the New Year.
· Big Japanese manufacturers’ business confidence improved for a fifth straight quarter in the three months to December to hit a 11-year high, a central bank survey showed, a sign the economy is gathering momentum from robust exports and booming corporate profits.
The data may help the Bank of Japan (BOJ) make the case that strengthening economic recovery will prompt firms to raise wages and allow it to edge away from crisis-mode stimulus, even before inflation hits the central bank’s elusive 2 percent target.
The headline index for big manufacturers’ sentiment stood at plus 25 in December, the BOJ’s closely watched “tankan” survey showed on Friday, up from plus 22 in September and slightly higher than a median market forecast for plus 24.
· Oil prices rose on Thursday as a pipeline outage in Britain continued to support prices despite forecasts showing global crude surplus in the beginning of next year.
U.S. West Texas Intermediate futures settled up 44 cents, or 0.8 percent, to $57.04 a barrel.
Brent crude futures settled up 1.4 percent, or 87 cents, at $63.31 a barrel.
Reference: Reuters, CNBC
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