Market Roundup
- Australia Feb overall job ads -1.2% m/m, newspapers +6.9%, internet -1.3%.
- Australia Feb PCI 46.1, -0.2 points from Jan, overall activity up however.
- New Zealnd Q4 wholesale sales -0.2% q/q, +2.4% y/y.
- BIS - Market turbulence shows faltering confidence in central banks' healing powers, int'l debt net issuance $47 bln in Q4, largest contraction since Q3 '12, int'l financing flows slowed in H2 '15, global liquidity turning point? Carry trades at heart of China capital outflows.
- Hedge funds' bearish mining bets turn sour - Financial Times.
- SNB Maechler- Money policy limits not reached yet, CHF over-valued -Le Temps.
- BoJ Gov Kuroda - Concerns QQE cannot be expanded unfounded, BoJ to make full use of NIRP/QQE policies, achieve 2% CPI target, call market volume to rise once market becomes accustomed to NIRP, excessive risk aversion holding back impact of policy moves, China stock mkt decline correction of bubble - RTRS.
- Japan PM Abe - BoJ decided on NIRP on its own, will raise VAT as planned.
- Japan end-Feb foreign reserves $1.254 trln, end-Jan $1.248 trln.
- PBOC Gov Zhou - Policy can aid supply-side reform - Shanghai Securities News.
- PBOC ViceGov Yi Gang -Fundamentals sound, FX reserves ample, illiquid assets not included, aiming for stable CNY, no basis for depreciation - Reuters.
- China FinMin Lou - Fiscal income growth to slow, room to up government debt, bank non-performing loans to rise - Reuters.
- China unveils five-year plan, prepares for tough battle, '16 GDP +6.5-7%, CPI +3%, budget deficit 3% of GDP, maintain CNY at reasonable-balanced level, promote bond-stock market reforms - Reuters.
- Moody's puts most oil producing nations on review for possible downgrades.
- (0200 ET/0700 GMT) Germany Jan industrial orders, -0.3% m/m eyed; last -0.7%.
- (0400 ET/0900 GMT) Italy Jan producer prices; last -0.7% m/m, -3.3% y/y.
- (0400 ET/0900 GMT) Norway Jan manufacturing output, -0.3% m/m eyed; last -0.3%.
- (0430 ET/0930 GMT) Eurozone Mar Sentix index, 8.0 eyed; last 6.0.
- (1000 ET/1500 GMT) United Staes Feb employment trends index; last 128.9.
- (1500 ET/2000 GMT) United Staes Jan consumer credit, $16.75 bln eyed; last $21.27 bln.
- N/A EZ EcoFin meeting in Brussels.
- N/A BoE ChiefEcon Haldane speech at LSE conference.
- N/A France E3.1-3.5/1.0-1.4/1.3-1.7 bln 3/6/12-month BTF note auctions.
- N/A Netherlands E1-2 bln 3/6-month DTC auctions.
- N/A FOMC ViceChair Fischer/WB Mulyani speak at Washington NABE conference.
- N/A US Tsy Sheets, Fed Gov Brainard speak at Washington, DC IIB conference.
- (1230 ET/1730 GMT) Buba Dombret speaks at Berlin event.
USD: The dollar struggled on Monday after failing to gain on stronger-than-expected U.S. payrolls data. It had initially gained on Friday on reaction to an upbeat nonfarm payrolls report which showed solid job growth of 242,000. The dollar index was steady at 97.325, nursing a 0.3 percent fall on Friday. It climbed above 98.000 in immediate reaction to the jobs data, but then declined as low as 97.019.
EUR/USD: The euro trades 0.11 percent down at 1.0989, away from a 1-week high of 1.1043 touched on Friday. The pair has come under immense pressure by anticipation that the European Central Bank will expand its stimulus at a policy meeting on Thursday. Following the U.S. jobs reports on Friday, the pair advanced a fresh 5-day highs around 1.1040 as the data disappointed the USD bulls and triggered a sharp sell-off in the greenback. The headline NFP numbers surpassed expectations, however, the wages failed to impress the markets, recording the first decline since December 2014. Looking ahead, markets remain cautious on the ECB monetary policy decision due later this week, with expectations for further easing. In the day, markets will closely eye the German factory orders and Euro zone Sentix investor confidence index for fresh cues on the pair. Euro bears are tempering their expectations for bold action, having been disappointed before. Immediate support is seen at 1.0952 (10-DMA), while resistance is located at 1.1043 (Previous Session High).
USD/JPY: The dollar lost some ground against the yen, as the pair touched a low of 113.49 earlier in the Asian trade, from a high of 114.25 hit in Friday's session. The upbeat U.S. nonfarm payrolls figures released last week showed some signs of recovery in the U.S. manufacturing sector, easing worries that the U.S. economy could be slipping into recession under the weight of low oil prices. However, the average U.S. hourly wages surprisingly declined by 0.1 percent after an unexpected strong 0.5 percent increase in January, suggesting that the Fed can wait longer before raising interest rates again. The yen is also strengthened by ongoing weakness in the Japanese stocks. U.S. labor market conditions report and Feds speech will be closely watched for further momentum. The pair continues to trade lower around 113.71, mainly driven by risk sentiments. Immediate support is located at 113.38 (10-DMA), break below could drag the pair to 113.12. Resistance is seen at 114.25 (Previous Session Low).
AUD/USD: The Australian dollar eased in the early Asian trade, trimming down some of last week's 4.4 percent rally. The Aussie advanced to a 5 1/2-month high of $0.7443 on Friday, as it had outperformed on data showing an unexpected acceleration in the Australian economy, which reduced the chances of further cuts in interest rates this year. The weakness in the pair comes in as Australian ANZ February Job Advertisements declined to -1.2% from previous 1.0%, forecasting a low employment growth in Australia. Markets now await U.S. labour market condition data and Fed's Fisher speech, ahead of RBA Deputy Governor speech. The pair trades at 0.7411, however, away from sessions low of 0.7397. Immediate resistance is located at 0.7443 (Previous Session High), while support is seen at 0.7332 (5-DMA).
NZD/USD: The New Zealand dollar trades 0.28 percent lower at 0.6791, having declined to a low of 0.6778, away from a high of 0.6818 struck on Friday. The kiwi rose to a high of 0.6804, before falling down to its current levels. Traders are likely to remain cautious on the pair, ahead of RBNZ's interest rate decision. Markets will also watch Q4 manufacturing report and electronic card retail sales for further cues on the pair. On the upside, resistance is located at 0.6818 (Previous Session High), while on the downside, support is seen at 0.6723 (5-DMA).
USD/CNY: The yuan eased against the dollar on Monday, giving up some of its sharp gains in the previous session. The central bank set the midpoint rate at 6.5113 per dollar prior to market open, the firmest fixing in two months, and 0.26 percent stronger than the previous fix 6.5284. The strong midpoint fixing by the PBoC suggested the dollar's global weakness with the dollar index against a basket of currencies. In the spot market, the yuan opened at 6.5102 per dollar and was trading at 6.5149 at midday, 0.13 percent lower than the previous close. While the offshore yuan was trading 0.12 percent firmer than the onshore spot at 6.507 per dollar.
Equities Recap
Asian shares hit two-month highs on Monday, extending sharp gains from last week, following upbeat U.S. jobs data and a rebound in oil and commodity prices.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent. It hit a two-month high on Friday, posting its largest weekly gain since October. The Shanghai Composite index rose 0.5 percent, while Taiwan stocks edged up 0.2 pct at 8,659.55 points.
Australia's S&P/ASX 200 index climbed up 1.13 pct at 5,147.70 points, while Nikkei closed down 0.61 pct at 16,911.32, with Seoul shares edged up 0.15 pct.
Commodities Recap
Gold steadied below last week's 13-month high on Monday, its recent rally doused by robust U.S. employment data that underpinned expectations that the Federal Reserve could raise interest rates this year. however, the Fed is unlikely to lift rates as soon as next week during its policy meeting. Spot gold was little changed at $1,259.80 an ounce by 0313 GMT, while U.S. gold for April delivery dropped 0.8 percent to $1,261.10. Spot silver was flat at 15.51 an ounce, palladium edged down 0.4 percent to $553 and platinum declined 0.5 percent to 974.50.
Oil prices advanced on Monday, extending a rally that has lifted crude benchmarks by more than a third from this year's lows, as tightening supply and an improving global outlook strengthened the sentiment for a market recovery. Front-month Brent crude futures were trading at $39.49 per barrel at 0400 GMT, up 77 cents or 2 percent from their last settlement. U.S. West Texas Intermediate futures were trading at $36.63 a barrel, up 71 cents from the last close and 40 percent above lows touched in February.
Treasuries Recap
The U.S. 10-year bond yield rose to a one-month high of 1.902 percent on Friday but remained way below its levels of around 2.25 percent in December. Yields on the 3-year, 5-year and 7-year note yields soared to their highest levels in about a month.
