Market Roundup
- Financial sector stress delivers fresh jolt, Banks help drive Europe shares to 16-month low, Cost of insuring European financials' debt up sharply.
- ECB's Coeure: ECB aims to protect EZ from being the victim of global slowdown, will do more if we need to get inflation higher.
- Canada Dec building permits jump, +11.3% vs 5.6% forecast, -19.9% previous.
- Wall St down over 2 percent as tech rout deepens, oil drops.
- Gold price surges to highest level since June as share prices slide.
- Mexico Finance Minister Videgaray says Pemex budget cuts coming soon.
Looking Ahead - Economic Data (GMT)
- 00:00 Australia HIA New Home Sales m/m Jan -2.70%-previous
- 00:30 Australia NAB Business Conditions Jan 7-previous
- 00:30 Australia NAB Business Confidence Jan 3-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1130 levels and currently trading at 1.1197 levels. The pair has made session high at 1.1214 and hit lows at 1.1080 levels. The U.S. dollar gained against euro on Monday as the dollar gained strength after U.S. wages data showed a pick up in January, indicating greater inflation and denting the view that the Federal Reserve would not hike interest rates at all this year. Dollar extended its rally against euro as investors preferred riskier assets on persistent concern over the pace of global growth. Stocks ended three sessions of gains. Data over the weekend showed the decline of China's foreign exchange reserves slowed to just below $100 billion last month. The drop was smaller than expected, but analysts said it was still a warning that Beijing must stem a flight of domestic capital or be forced to allow the yuan to weaken. The currency's strongest level of the session was $1.1220, while it's weakest was at $1.1090.
GBP/USD is supported in the range of 1.4340 and currently trading at 1.4434 levels. It reached session high at 1.4445 and hit low at 1.4349 levels. Sterling fell against the dollar on Monday, as a sell-off in global stock markets hit the currencies pair and also uncertainty about Britain's membership with European union weighing on the currency pair. Sterling shed 0.6 percent against US dollar to trade at $1.4415, off the one-month high of $1.4672 it hit last Thursday after Bank of England chief Mark Carney quashed talk that interest rates could be cut in the coming months. A recent poll result showed favorable views for Britain to leave the European Union. Analysts expect uncertainty stemming from the referendum to keep the pound choppy in the coming months and possibly force the central bank to keep rates lower for longer.
USD/CAD is supported at 1.3795 levels and is trading at 1.3924 levels. It has made session high at 1.3980 and lows at 1.3837 levels. The Canadian dollar declined against US dollar on Monday as a sell-off in stocks and falling crude oil prices weighed on the oil-correlated currency. Investors shed risky assets as worries about global grown continued. U.S. crude prices were down 1.52 percent at $30.42 a barrel after a Saudi-Venezuela meeting showed few signs that steps would be taken to boost prices. On Friday, weak Canadian jobs data highlighted that Canadian economy's struggles when oil prices struggles, while U.S. wage growth helped strengthening the greenback. Attention has shifted to U.S. Federal Reserve Chair Janet Yellen's testimony on Wednesday amid doubts about the Fed's ability to raise rates this year. The currency's strongest level of the session was C$1.3841, while it hit its weakest since Feb. 3 at C$1.3978.
USD/JPY is supported around 115.00 levels and currently trading at 115.80 levels. It peaked to hit session high at 115.85 and made session lows at 115.15 levels. U.S dollar declined to hit 15 month low against the Japanese yen on Monday as crude oil prices continued to decline and doubts about the effectiveness of the Bank of Japan's negative interest-rate policy drove investors back into the safe-haven currency. The surprising announcement that BoJ was cutting its interest rate to minus 0.1 percent on certain deposits sent the dollar up as much as 2 percent on Jan. 29. But markets have since reconsidered, with investors now buying the yen and selling the dollar.Worries about slowing global growth had convinced many investors that the next hike by the Federal Reserve would be a long time coming. The dollar fell to a roughly 15-month low against the yen of 115.17 yen, partly on doubts about the effectiveness of the Bank of Japan's negative interest rate policy.
Equities Recap
European shares closed at their lowest level in more than two years on Monday with investor concerns over the health of the region's banks compounding worries over slowing global growth.
UK's benchmark FTSE 100 closed down by 2.65 percent, the pan-European FTSEurofirst 300 ended the day down by 3.38 percent, Germany's Dax closed down at 3.31 percent, and France's CAC finished the day down by3.17 percent.
U.S. stocks lost ground Monday trading in a broad selloff that drove financial, tech, consumer and materials indexes down more than 3 percent amid persistent fears of a global slowdown.
Dow Jones closed down by 1.08 percent, S&P 500 ended the day down by 1.41 percent, Nasdaq finished the day down by 1.81percent.
Treasuries Recap
U.S. Treasury prices rallied Monday, with the yield on the 10-year note reaching a one-year low as falling stock and oil prices added to investor appetite for safe-haven government debt.
Benchmark 10-year notes were last up 1-00/32 in price to yield 1.738 percent, down from 1.848 percent on Friday.
The 30-year bond was last up 2-16/32 in price to yield 2.564 percent, down from 2.681 percent late on Friday.
Commodities Recap
Global oil markets fell 3 percent to settle down for a third straight day on Monday on worries that U.S. crude stockpiles had reached new record highs, while a Saudi-Venezuela meeting to boost prices showed little progress.
U.S. crude settled below $30 a barrel, finishing down $1.20 at $29.69. Global crude benchmark Brent settled down $1.18 at $33.88.
The price of gold jumped 2 percent to a 7-1/2-month high on Monday, briefly nudging above the psychological level of $1,200 an ounce, as sliding stock markets and worries over global economic growth prompted investors to seek safety.
Spot gold reached a peak of $1,200.60 an ounce, its strongest since June 22, after breaking key resistance at its October high at $1,190.63. At 3:02 p.m. EST (2002 GMT) it was up 1.8 percent at $1,194 an ounce.
U.S. gold for April delivery settled up 3.5 percent at $1,197.90 an ounce.
