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·           EUR/USD Forecast: Break above 1.1000 in play

The EUR/USD pair is trading in the 1.0980 price zone, overbought in the short-term but still poised to extend its advance. In the 4-hour chart, the 20 SMA maintains its bullish slope well above the larger ones, as technical indicators stabilised in overbought territory. The 1.1000 level is a critical psychological barrier and stops are likely gathered just above it. If those got triggered, the rally could continue during the next sessions towards the 1.1120 region.

Support levels: 1.0950 1.0920 1.0890 

Resistance levels: 1.1010 1.1045 1.1090

·           Japanese Economy Minister Yasutoshi Nishimura is back on the wires on Thursday, announcing that the government will lift its State of Emergency in Osaka, Kyoto and Hyogo.

Tokyo and four other prefectures, including the northern island of Hokkaido, would remain under the state of emergency, Nishimura added.

·           Millions more Americans likely filed for unemployment benefits last week as backlogs continue to be cleared and disruptions from the novel coronavirus unleash a second wave of layoffs, pointing to another month of staggering job losses in May.

“None of these states had systems set up to process the unprecedented amount of claims in one fell swoop, so there are backlogs,” said Steve Blitz, chief U.S. economist at TS Lombard in New York. “We continue to read of firms cutting their workforce and these are firms that were not immediately impacted by the mandated contraction from COVID-19.”

Initial claims for state unemployment benefits likely totaled a seasonally adjusted 2.4 million for the week ended May 16, according to a Reuters survey of economists. Data for the prior week is likely to be revised to show applications substantially down from the previously reported 2.981 million after Connecticut said it had misreported its numbers.

Last week’s filings would lift the number of people who filed claims for unemployment benefits to about 38.9 million since March 21. Economists caution that this figure was not the number of jobs lost due to the pandemic because of the technical difficulties and procedures at state unemployment offices.

·           RBA Governor Philip Lowe: Financial system is resilient, well placed to handle virus, Monetary policy has limits, fiscal has been crucial. Measures RBA introduced have been working as expected.

Capital, liquidity buffers can be tapped to aid the economy. Some reduction in capital ratios entirely appropriate

Confidence is very fragile, restoring it is key. Health issue worldwide suggests it will be a slow recovery.

Not appropriate to tighten until we have robust growth. RBA still not contemplating negative rates, costs of them exceed benefits.

·           Scientists in Singapore are developing a vaccine for the coronavirus, with hopes that early-stage clinical trials could start as soon as next month, according to Wang Linfa, professor and director of the Emerging Infectious Diseases program at Duke-NUS Medical School.

·           The Senate passed legislation on Wednesday that could ban many Chinese companies from listing shares on U.S. exchanges or raising money from American investors without adhering to Washington’s regulatory and audit standards.

The bill, sponsored by Louisiana Republican Sen. John Kennedy, would require companies to certify that “they are not owned or controlled by a foreign government.” Alibaba, an e-commerce giant based in China, saw its U.S.-listed shares fall more than 2% on the news.

·           Tensions between the U.S. and China will likely get worse ahead of the American presidential election this November, experts told CNBC on Thursday.

With Trump campaigning for a second term in office, “the end game for the Trump administration is crystal clear — and that is winning the election,” said Yale University senior fellow, Stephen Roach.

“This is not about improving economic security for Americans, American companies, no matter what they say. This is a politically motivated trade conflict,” said Roach, who is a former chairman at Morgan Stanley Asia.

Roach added he “wouldn’t rule anything out” in terms of actions that the Trump administration may take, be they new tariffs on Chinese imports into the U.S. or defaulting on debt to China, as some have suggested.

·           Oil prices rose on Thursday to their highest since March, as a drawdown of U.S. crude inventories and output cuts by major producers helped ease concerns about a supply glut, offsetting fears over the economic fallout from the COVID-19 epidemic.

Brent crude futures for July delivery LCoc1 were trading up 62 cents, or 1.7%, at $36.37 per barrel at 0550 GMT, rising for a second day.

U.S. West Texas Intermediate (WTI) crude futures for July CLc1 were up 61 cents, or 1.8%, at $34.10 a barrel, extending its gains into a sixth straight session.

·           Oil demand in the world’s third-biggest market has crashed in recent months due to the nationwide lockdown enforced by the world's second-most populous country to contain the coronavirus outbreak and is unlikely to see a full recovery until the end of 2020, according to executives of the country’s state-owned fuel retailers.

“Demand is reaching 60% to 70% of normal, but it will take some time to get to pre-coronavirus sales,” said Mukesh Kumar Surana, chairman of Hindustan Petroleum Corp.

“Over a period of two to three months, we should get back to 80% of normal sales. Beyond that, it will be slow,” added Surana.