Market Roundup
• US Durable goods orders jump 1.8% as forecast, Core capital goods orders fall 0.4% v 0.5% forecast in January.
• US pending home sales -2.8% v forecast 0.9%, 0.8% previous, fall to lowest level in a year.
• Fed's Kaplan: Repeats that rate hike should be sooner than later.
• Atlanta Fed’s GDPNow 2.5% vs 2.4% on Feb 16.
• Dollar weaker as investors await details on Trump tax plans, Investors fear lack of details from Trump.
• Trump seeks 'historic increase' in US defense spending, cuts elsewhere; budget to be a national security budget.
• ECB won't announce another round of TLTROs, as current program expires next month – Traders.
• French 10-year bond yields hit 1-mos lows as political jitters ease, Polls show Macron beating Le Pen in runoff.
• Euro Zone banks cut cross-border lending as stability fears grow, Cross-border loans between banks down 6 percent in January.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Industrial output prelim mm Jan forecast 0.3%, 0.7%- previous
• 23:50 Japan Industrial output Forecast 1 month Ahead Jan 3%- previous
• 23:50 Japan Retail Sales YY January forecast 0.9%, 0.6%- previous
• 00:00 Australia HIA New Home Sales m/m Jan 0.2%- previous
• 00:30 Australia Private Sector Credit* January 0.7%- previous
• 00:30 Australia Housing Credit* January 0.5%- previous
• 05:00 Japan Construction Orders YY January 7.1%- previous
• 05:00 Japan Housing Starts YY* January forecast 3.2%, 3.9%- previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan- Bank Of Japan Executive Director Shigehiro Kuwabara to attend the Third FinTech Forum.
Currency Summaries
EUR/USD is likely to find support at 1.0549 levels and currently trading at 1.0586 levels. The pair has made session high at 1.0630 and hit lows at 1.0587 levels. Euro declined against the dollar on Monday as greenback retreated from earlier losses ahead of speech by U.S. President Donald Trump on Tuesday. Treasury Secretary Steven Mnuchin said on Sunday that Trump would use the event to preview some elements of his sweeping plans to cut taxes for the middle class, simplify the tax system and make U.S. companies more globally competitive, with lower rates and changes to encourage U.S. manufacturing. The dollar reversed earlier weakness on Monday as U.S. bond yields rose from more than one-month lows, indicating a perception that a rate hike is more likely in the coming months. The greenback was last up 0.03 percent against a basket of six major currencies at 101.12, after earlier falling to 100.69. The dollar dropped 0.27 percent against the euro to $1.0588.In Europe, the focus was on France, where the latest polls showed that centrist Emmanuel Macron would score a more convincing victory over far-right and anti-euro Marine Le Pen in the presidential election's runoff vote.
GBP/USD is supported in the range of 1.2380 levels and currently trading at 1.2441 levels. It reached session high at 1.2478 and dropped to session low at 1.2413 levels. Sterling declined to hit 12 day low against dollar on Monday as sterling came under selling pressure after speculation of another possible Scottish independence vote added to fears about Britain's future as it prepares to leave the European Union. A report in the Times newspaper showed British Prime Minister Theresa May is preparing for Scotland to call a fresh independence referendum in March, to coincide with the triggering of Article 50Britain's formal notification to leave the EU. A spokesperson for the prime minister said the threat of a fresh Scottish independence vote was creating unnecessary uncertainty and division, and that the prime minister has not yet set a timetable for her migration policies, which gave the pound some relief. Sterling has lost nearly a fifth of its value since Britain voted to leave the European Union in a referendum last June, with data providing a mixed picture of the British economy.
USD/CAD is supported at 1.3080 levels and is trading at 1.3173 levels. It has made session high at 1.3175 and lows at 1.3082 levels. The Canadian dollar declined against its U.S. counterpart on Monday as the greenback strengthened ahead of a speech by U.S. President Donald Trump and investors awaited Bank of Canada interest rate decision on Wednesday. The Bank of Canada is widely expected to hold interest rates at 0.50 percent on Wednesday. In January, its governor, Stephen Poloz, said that an interest rate cut remains on the table depending on risks, including material consequences if U.S. President Donald Trump enacts protectionist policies. Oil prices were little changed on anticipation for U.S. crude production to continue growing offset reports of high compliance to the OPEC production cut agreement and record bullish bets that prices would rise further. Trump's address to Congress is due on Tuesday. He is expected to unveil some elements of his plans to cut taxes. The Canadian dollar was last trading at C$1.3167 to the greenback weaker than Friday's close of C$1.3101.
AUD/USD is supported around 0.7650 levels and currently trading at 0.7672 levels. It hit session high at 0.7698 and made session lows at 0.7674 levels. Australian dollar declined against US dollar on nervousness ahead of U.S. President Donald Trump's key speech on Tuesday. Investors awaited details whether Trump would unveil details on pro-business policies including tax reform, cash repatriation or infrastructure spending during his address to Congress Tuesday night, others were not ready to make new bets as they worried that the speech would disappoint. The Australian dollar initially jumped upto $0.7695 but declined slightly to trade at $0.7676. The Aussie has been trading in a sideways direction since the beginning of February, facing stiff resistance at 77 U.S. cents. It has breached that level six times over the last two weeks but has failed to stay above it. The last time it failed at that barrier in November, it came tumbling down to $0.7163.
Equities Recap
European shares inched lower on Monday weighed down by losses among insurers, while exchange operators tumbled on the expected failure of the London Stock Exchange's merger with Deutsche Boerse to create a European trading powerhouse.
UK's benchmark FTSE 100 closed up 0.1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.08 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day flat.
U.S. stocks ended slightly higher on Monday and the Dow closed at a record high for a 12th straight session, as President Donald Trump said he would make a "big" infrastructure statement on Tuesday.
Dow Jones closed down by 0.08 percent, S&P 500 ended up 0.10 percent, Nasdaq finished the day up by 0.27 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday from multi-week lows touched Friday on expectations that a speech by U.S. President Donald Trump due on Tuesday could drive yields higher, while hawkish comments from a Federal Reserve official also contributed.
Benchmark 10-year notes were last down 13/32 in price to yield 2.363 percent, from a yield of 2.317 percent late Friday.
Commodities Recap
Oil prices ended little changed on Monday as the prospect for U.S. crude production to continue growing offset reports of high compliance to the OPEC production cut agreement and record bullish bets that prices would rise further.
Brent crude settled down 0.1 percent at $55.93 per barrel while U.S. West Texas Intermediate settled up 0.1 percent at $54.05 per barrel as a global supply glut appeared to ease.
Gold fell after tapping a 3-1/2-month high on Monday as U.S. Treasury yields rose and investors waited for U.S. President Donald Trump to outline plans for tax cuts, infrastructure spending, levies on imports and foreign policy.
Spot gold turned down 0.1 percent to $1,255.22 an ounce by 2:43 p.m. EST (1943 GMT), after rising to $1,263.80, the highest since Nov. 11, but prices failed to hold above the 200-day moving average at $1,260.74.U.S. gold futures settled up 0.04 percent at $1,258.80.
