Market Roundup
• US ISM Mfg PMI 57.2 v 57.0 forecast, 57.7 previous; prices paid 70.5 v 66 forecast, Employment 58.9 v 54.7 forecast
• US Markit Mfg PMI final Mar 53.3 v 53.4-previous
• US Construction spending m/m 0.8% v 1.1% forecast -0.4% previous
• Fed's Dudley: Debt load could snag students, hurt U.S. economy
• Atlanta Fed’s GDPNow forecast for Q1 GDP at 1.9% up from 0.9% on March 31
• Eurozone factories struggled to meet soaring demand in March (Markit Mfg PMI final flat at 56.2) -PMI
• ECB’s Coeure: ECB's aggressive stimulus no threat to financial health
• S&P: S.Africa’s LT FX rating cut to ‘BB+’ on political& institutional uncertainty; outlook negative
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Trade Balance G&S (A$)* Feb forecast 1800m, 1302m- previous
• 01:30 Australia Goods/Services Imports* Feb 4.00%- previous
• 01:30 Australia Goods/Services Exports* Feb -3.00%- previous
Looking Ahead - Events, Other Releases (GMT)
• 04:30 Australia RBA Cash Rate* Apr forecast 1.5%, 1.50%- previous
Currency Summaries
EUR/USD is likely to find support at 1.0600 levels and currently trading at 1.0667 levels. The pair has made session high at 1.0678 and hit lows at 1.0640 levels. Euro declined against the dollar on Monday as dollar strengthened across the board generally on positive U.S. backdrop such as rising interest rates, at a time when other major central banks are either on hold or in policy-easing mode. U.S. construction spending and manufacturing data on Monday was positive overall, affirming the economy's steady improvement. Construction spending grew 0.8 percent to $1.19 trillion, the highest level since April 2006. The Institute for Supply Management's manufacturing index, on the other hand, was 57.2 in March, with components such as the prices paid and manufacturing indexes notching their highest readings since May and June 2011, respectively. The dollar's gain has also been helped by the euro's early struggles on Monday. The euro hit a three-week low against the dollar mixed economic data coming out of Europe added to existing worries about political risk in the euro zone.
GBP/USD is supported in the range of 1.2422 and currently trading at 1.2481 levels. It reached session high at 1.2515 and hit low at 1.2461 levels. Sterling slipped against dollar on Monday as U.S. dollar strengthened across the board after upbeat US economic data and investors expected that U.S. rates will continue to rise this year, even as Federal Reserve officials have said the Fed is in no rush to tighten monetary policy.U.S. construction spending and manufacturing data were positive overall, affirming the economy's steady improvement. Construction spending grew 0.8 percent to $1.19 trillion, the highest since April 2006. The U.S. dollar also gained across the board as markets eyed the U.S. nonfarm payrolls report due on Friday for clues on the likely pace of interest rate rises from the U.S. Federal Reserve.
USD/CAD is supported at 1.3302 levels and is trading at 1.3377 levels. It has made session high at 1.3399 and lows at 1.3349 levels. The Canadian dollar weakened against its U.S. counterpart on Monday as Canadian dollar was pressured lower oil prices and risk appetite receded. Commodity-linked currencies, such as the loonie, tend to underperform when investors turn less optimistic about the economic outlook. Oil prices were under pressure as a rebound in Libyan oil output over the weekend offset upbeat economic data from Asia that suggested robust energy demand from the region. Benchmark Brent futures fell 41 cents to settle at $53.12 a barrel. U.S. West Texas Intermediate crude futures settled down 36 cents at $50.24 a barrel. On the data front, Canada’s trade report for February is due on Tuesday, while the country's employment report for March is due on Friday. The Canadian dollar was last trading at C$1.3383 to the greenback, or 74.78 U.S. cents, weaker than Friday's close of C$1.3299, or 75.19 U.S. cents.
AUD/USD is supported around 0.7585 levels and currently trading at 0.7604 levels. It hit session high at 0.7623 and made session lows at 0.7593 levels. Australian dollar dipped against US dollar on Monday as firmer dollar and downbeat economic data weighted on Australian dollar. Retail sales unexpectedly fell in February, adding to growing evidence that debt-laden households were tightening their purse strings. Data showed sales were down 0.1 percent when economists were hoping for a 0.3 percent gain. That fall, plus record low wages growth, a lacklustre job market and core inflation below the RBA's target band of 2-3 percent, all argue against a rise in official rates. The central bank holds its April policy meeting on Tuesday and is considered certain to hold rates at 1.5 percent, and perhaps expand on its warnings over housing. The Australian dollar was last trading at $0.7605, but remained within the recent trading range of $0.7587 to $0.7679.
Equities Recap
European shares dropped on Monday, retreating from a 16-month high as a reversal among oil stocks and banking sector losses added pressure in a volatile session.
UK's benchmark FTSE 100 closed down by 0.4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.50 percent, Germany's Dax ended down by 0.3 percent, France’s CAC finished the day down by 0.6 percent.
Wall Street closed slightly lower on Monday as March auto sales disappointed and investors questioned whether the Trump administration would deliver on its pro-business economic stimulus.
Dow Jones closed down by 0.06 percent, S&P 500 ended down by 0.16 percent, Nasdaq finished the day down by 0.28 percent
Treasuries Recap
U.S. Treasury yields fell on Monday, with benchmark 10-year yields touching more than one-month lows, after weaker-than-expected U.S. auto sales and reallocation into U.S. government debt at the start of the quarter boosted demand.
U.S. 30-year Treasury bonds were last up 25/32 in price to yield 2.978 percent, from a yield of 3.017 percent late Friday.
U.S. 10-year Treasury notes were up 14/32 in price to yield 2.344 percent, from a yield of 2.395 percent late Friday.
Commodities Recap
Oil prices fell on Monday as a rebound in Libyan oil output weighed against upbeat economic data from Asia that pointed to strong energy demand from the region.
Benchmark Brent futures for June delivery lost 41 cents, or 0.8 percent, to settle at $53.12 a barrel. That, however, was up 29 cents from Friday's close when May was still the front-month, making it the highest close for the contract in nearly four weeks.
U.S. West Texas Intermediate (WTI) crude, meanwhile, declined 36 cents, or 0.7 percent to settle at $50.24 per barrel.
Gold rose on Monday on geopolitical worries, but was trading in a tight range in the absence of any fresh clues on U.S. monetary policy and as the market looked to economic data later in the week for more direction.
Spot gold was 0.3 percent higher at $1,252.66 per ounce by 2:15 p.m. EDT (1815 GMT), trading in a range between $1,244.05 and $1,253.52.
