Market Roundup
- U.S. cons spending flat; savings at three-year high may hint at growth in near-term.
- Markit Mfg PMI revised down to 52.4 from 52.7.
- U.S. construction spending up slightly (0.1%) in Dec from -0.6% in Nov.
- U.S. ISM Mfg index falls fourth month in January, Mfg employment fell to 6.5-yr low.
- Fed's Fischer: U.S. vulnerable to global slowdown, need to wait & see whether market volatility will hit US economy.
- ECB's Draghi: growth prospects are improving in DMs; outlook in Ems more subdued.
- Argentina returns to NY for debt talks; to make offer this week.
- OPEC delegates say there is still no decision to hold meeting of OPEC/non-OPEC countries.
- Gold claws its way higher on weak factory data in China, Europe.
- Moody's: US corporate defaults to hit six-year high in 2016 as commodity fallout continue.
Looking Ahead - Economic Data (GMT)
- No Significant Data
Looking Ahead - Events, Other Releases (GMT)
- 03:30 Australia RBA Cash Rate* Feb forecast -2.00%, 2.00%-previous
Currency Summaries
EUR/USD is likely to find support at 1.0850 levels and currently trading at 1.0890 levels. The pair has made session high at 1.0911 and hit lows at 1.0874 levels. Euro edged higher against US Dollar on Monday after data showed U.S. manufacturing activity contracted in January for a fourth straight month as factories grappled with a strong dollar and lower oil prices forced energy firms to further cut spending, but the pace of the decline appeared to be slowing. The Institute for Supply Management (ISM) said its index of factory activity increased 0.2 percentage point against 48.2 last month. A reading below 50 signals a contraction in factory activity. The euro rose against the dollar to a session high of $1.0912 from Friday's low of $1.0810. The euro was last up 0.62 percent against the dollar at $1.08980, while the dollar was 0.06 percent lower against the yen at 121.070 yen.
GBP/USD is supported in the range of 1.4400 levels and currently trading at 1.4437 levels. It reached session high at 1.4444and dropped to session low at 1.4379levels. Sterling rose sharply against US dollar on Monday, broadly supported by stronger than expected Manufacturing PMI data, shrugging of increased concern for Britain's exit from the European Union. Sterling strengthened after the UK manufacturing PMI printed better than expected figures in January, printing a slight improvement in Britain's manufacturing sector in the beginning of the year. The pound was hammered down in December on concerns that Bank of England would postpone interest rates hike plans and debate over the "Brexit" from European Union. Against the dollar, sterling was up at $1.4360, with subdued U.S. manufacturing data also weighing on the dollar. The pound was flat against the euro at 76.03 pence per euro.
USD/CAD is supported at 1.3900 levels and is trading at 1.3934 levels. It has made session high at 1.4040 and lows at 1.3930 levels. The Canadian dollar gained against U.S dollar on Monday as weak US manufacturing data weakened the dollar on broader view that Federal Reserve would go slow on raising interest rate as the weak macro-economic data and concerns related to global economic growth weighed on the green back. On the data front, the Canadian manufacturing sector contracted for the sixth month in a row in January as measures of output and employment remained weak, data showed on Monday, in the latest sign that the economy was struggling to regain momentum. The RBC Canadian Manufacturing Purchasing Managers' Index (PMI), a measure of manufacturing business conditions, edged up to a seasonally adjusted 49.3 last month from 47.5 in December. The currency's strongest level of the session was C$1.3907, while its weakest level was C$1.4062.
USD/JPY is supported around 120.54 levels and currently trading at 121.08 levels. It hit session high at 121.33 and made session lows at 121.80 levels. The dollar declined against Japanese Yen on Monday on the view that the Federal Reserve would not raise interest rates as thought earlier given weak U.S. economic data and continued easing from the Bank of Japan. The dollar edged lower against the yen, hitting a session low of 120.67 yen after shooting 2 percent higher against the Japanese currency on Friday to a six-week high of 121.700 after the BoJ's surprised the market with negative interest rates. The BoJ's move on Friday could put brakes on Fed plans to hike rates as quickly as they initially forecast. Policymakers at the U.S. central bank indicated in December that they expected to hike rates four times this year. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last down 0.62 percent at 98.989. The currency's strongest level of the session was $121.17, while its weakest level was $120.67.
Equities Recap
European shares fell on Monday, pulled lower by telecom equipment stocks amid investor disappointment over the terms of a deal between Nokia and Samsung to settle a legal dispute.
UK's benchmark FTSE 100 closed down by 0.9 percent, the pan-European FTSEurofirst 300 ended the day down by 0.36 percent, Germany's Dax ended down by 0.5 percent, France's CAC finished the day down by 0.7 percent.
U.S. stocks closed slightly lower on Monday, recovering earlier losses, as the investors looked past another drop in the prices of oil and weak Chinese economic data.
Dow Jones closed down by 2.37 percent, S&P 500 ended up by 2.36 percent, Nasdaq finished the day up by 2.28 percent.
Treasuries Recap
U.S. Treasury yields rose from four-month lows as some investors bet that a month-long bond rally was overdone on Monday, the beginning of a heavy week of data that will culminate in Friday's jobs report for January.
Benchmark 10-year notes were last down 11/32 in price to yield 1.97 percent, after dropping to 1.91 percent in overnight trading, the lowest level since Oct. 2. The yields have fallen from 2.30 percent at the beginning of the year.
Commodities Recap
Gold rose to a three-month high on Monday, extending its recent rally on worries about global economic growth and hopes for easier monetary policy after weak US factory data.
Spot gold was up 1 percent at $1,128.40 an ounce at 2:32 p.m. EST (1932 GMT), after rising to $1,128.70, the highest since Nov. 3, just short of the 200-day moving average around $1,130 an ounce.
U.S. gold for April delivery settled up 1 percent at $1,128 an ounce.
U.S. crude oil prices slid as much as 7 percent on Monday, pressured by weak economic data from China, a U.S. forecast for mild weather and growing doubts that OPEC and non-OPEC producers would come together to reduce the swelling global supply glut
West Texas Intermediate (WTI) slid to its biggest daily loss in five months, down 6.9 percent to an intraday low of $31.29 in volatile afternoon trading. The contract eventually settled at $31.62, down 5.9 percent or $2.
Brent April crude futures settled at $34.24 a barrel, down $1.75, or 4.9 percent.
