Market Roundup
- Oil hits 2016 high above $40; glut warnings resurface, Oil up more than 40 percent from lows hit 2 months ago.
- Fed's Brainard :Central Banks worldwide should be looking to raise globall demand, a lot of reasons to think inflation may move higher, also troubling signs on inflation expectations.
- Fed's Fisher when oil prices stabilize we'll see inflation tending closer to 2%, doesn't see US slipping into negative rates territory.
- ECB money printing accelerated in latest week, ECB purchased EUR 13.238bn vs EUR 12.149bn-previous week.
- Fonterra reduced its forecast Farmgate Milk Price for the 15/16 season from NZD 4.15/kgMS to NZD 3.90/kgMS.
- Spot iron ore surges 20% ahead of steel output curbs, China expenditure to limit steel output, GS keeps bearish view.
- Mexico consumer confidence falls by most in 7 months (Feb 91.6 vs Jan 93.3).
- Oil prices expected to recover to around $70 by 2020: Kemp.
Looking Ahead - Economic Data (GMT) - --:-- CN Exports YY* Feb forecast -12.5%, -11.2%-previous
- --:-- CN Imports YY* Feb forecast -10%, -18.8%- previous
- --:-- CN Trade Balance USD* Feb previous 50.15b, 63.29b- previous
- 23:50 Japan Bank Lending YY* Feb 2.3%-previous
- 23:50 Japan Current Account NSA JPY* Jan forecast 719.0b, 960.7b-previous
- 23:50 Japan GDP Rev QQ Annualized* Q4 forecast -1.5%, -1.4%- previous
- 23:50 Japan GDP Revised QQ* Q4 forecast -0.4%, -0.4%- previous
- 23:50 Japan GDP Cap Ex Rev QQ* Q4 forecast 1.2%, 1.4%-previous
- 05:00 Japan Consumer Confidence. Index* Feb 42.5- previous
- 00:30 Australia NAB Business Conditions* Feb 5-previous
- 00:30 Australia NAB Business Confidence * Feb 2- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0950 levels and currently trading at 1.1012 levels. The pair has made session high at 1.1025 and hit lows at 1.0947 levels. The dollar eased against euro on Monday as big gains in oil prices rekindled demand for the euro and commodity-sensitive currencies, reducing concerns about the effects of weak commodity prices on the global economy while fall in average US earnings lessened expectations that Federal Reserve could raise interest rate at next meeting. A rally in industrial metal markets led by a 20 percent surge in iron ore prices also stoked bids for riskier currencies and reduced the demand for the greenback. The euro initially fell early Monday on bets of stimulus from the European Central Bank meeting on Thursday to support fragile euro zone growth. The euro edged up 0.1 percent to $1.1008 and down 0.5 percent to 124.75 yen.
GBP/USD is supported in the range of 1.4200 and currently trading at 1.4272 levels. It reached session high at 1.3280 and hit low at 1.3147 levels. The pound edged higher against US dollar in the New York session by punching higher from 1.4157 to 1.4283 by gaining almost 110 pips. The pound gained 2.6 percent last week as investors and speculators trimmed unfavourable bets made after the formal launch, just over two weeks ago, of Britain's referendum campaign over whether to remain in the European Union. Its gains against the dollar accelerated on Friday after a monthly jobs report showed that, while the labour market in the United States was robust, wage growth was tardy. This supported views that the Federal Reserve was in no hurry to hike interest rates. Meanwhile, Bank of England chief Mark Carney and deputy Governor Jon Cunliffe will address lawmakers on Tuesday.
USD/CAD is supported at 1.3200 levels and is trading at 1.3282 levels. It has made session high at 1.3426 and lows at 1.3293 levels. The Canadian dollar firmed against its U.S. counterpart on Monday, as oil prices rose to 40$ per barrel and ahead of a Bank of Canada monetary policy decision on Wednesday. Canadian dollar wiped out early losses as oil prices moved further away from 12-year lows set in February on hopes of reduced supply in the face of soft global demand, the Bank of Canada is expected to hold interest rates at 0.50 percent as it waits to see what the impact of the government's expected spending measures will have on the economy. The measures will be presented at the March 22 budget. The currency's strongest level of the session was C$1.3320, while its weakest was C$1.3377.
USD/JPY is supported around 113.09 levels and currently trading at 113.40 levels. It hit session high at 113.40 and made session lows at 113.63 levels. The dollar started the week against Japanese Yen on bullish note on Monday, after briefly hitting daily highs around 113.63 in the earlier European session. However, the dollar eased against most of the major pairs in the early New York session, after oil prices surged higher giving a boost to commodity currencies related currencies as oil prices moved further away from 12-year lows set in February on hopes of reduced supply in the face of soft global demand The dollar index, which measures the greenback against a basket of six currencies, was down 0.2 percent at 97.132, erasing an earlier 0.4 percent gain.
Equities Recap
European shares fell on Monday, led lower by a slump in utility EDF EDF after a senior executive quit, and by weaker bank stocks which were hit by some broker price target cuts.
Britain's blue-chip FTSE 100 index closed down by 0. 3 percent, France's benchmark CAC-40 index closed down by 0.4 percent, Germany's DAX ended down 0.5 percent, meanwhile the pan-European Eurofirst 300 index was down by 0.33 percent.
U.S. stock indexes were mixed on Monday as a spike in energy shares offset declines in large-cap technology names, with the S&P 500 ticking up to a two-month high.
Dow Jones closed up by 0.37 percent, S&P 500 ended up by 0.07 percent, Nasdaq finished the day down by 0.21 percent.
Treasuries Recap
U.S. Treasury prices fell on Monday in volatile trading as oil prices surged in the wake of a strong February U.S. jobs report, reducing demand for safe-haven government debt ahead of a European Central Bank meeting later in the week.
The benchmark 10-year note's yield rose to 1.920 percent, its highest in just over a month. It was last down 5/32 in price to yield 1.900 percent, up from 1.883 percent late on Friday.
The 30-year bond was last up 1/32 in price to yield 2.701 percent, down from 2.703 percent late on Friday.
Commodities Recap
Global oil markets jumped more than 5 percent on Monday, with Brent hitting a 2016 peak above $40 a barrel, after Ecuador said it was holding a meeting of Latin American crude producers as OPEC sought a higher anchor price for oil.
Brent, the global crude benchmark, settled up $2.12 at $40.84. Its session peak was $41.04, the highest since Dec. 9. That was 51 percent above the 12-year low of $27.10 on Jan20.
U.S. crude finished up $1.98 at $37.90 a barrel, near a 2-month high. On Feb. 11, it hit a 2003 low of $26.05.
Gold rose on Monday, hovering just below last week's 13-month high as the U.S. dollar turned lower, while a fall in average U.S. earnings lessened expectations the Federal Reserve could raise interest rates at its next policy meeting.
Spot gold was up 0.6 percent at $1,266.70 an ounce by 3:12 p.m. EST (2012 GMT). The metal had peaked at $1,279.60 on Friday, its strongest since February 2015, before slipping on U.S. data.
U.S. gold futures for April delivery settled down 0.5 percent at $1,264 per ounce.
