Market Roundup
• USD slips after soft US data pushes out Fed hike bets, US equities end near flat, US treasuries rise on weak US data.
• US Feb cons spending real m/m (0.2% vs 0.0% previous; revised lower from 0.4%).
• US Feb pending home sales (+ 3.5% vs 1.2% forecast) hit seven-month high in February.
• Fed's Williams: weaker global economies holding down US inflation (CNBC).
• Oil ends slightly lower -0.2%, Barclays/Macquarie warn of return to USD 30 levels.
• Atlanta Fed’s GDPNow model forecast GDP growth in Q1 ’16 at 0.6%, -1.4% from Mar 24.
• Brazil's 2016 inflation view falls for 3rd straight week.
• Chile's central bank lowers 2016 growth forecast, sees more rate hikes but at slower pace
Looking Ahead – Economic Data (GMT)
• 23:30 Japan All Household Spending YY * Feb forecast -1.5%, -3.1%-previous
• 23:30 Japan All Household Spending MM * Feb forecast 0.5%, -0.6%- previous
• 23:30 Japan Jobs/Applicants Ratio* Feb forecast 1.29, 1.28- previous
• 23:30 Japan Unemployment Rate*Feb forecast 3.2%, 3.2%- previous
• 23:50 Japan Retail Sales YY*Feb forecast 1.7%, -0.1%- previous
Looking Ahead – Events, Other Releases (GMT)
• 09:15 US FRB of San Francisco Pres John Williams speaks on “Steering the U.S. Economy Through Turbulent Seas” before an event hosted by the National University of Singapore – 0915
Currency Summaries
EUR/USD is likely to find support at 1.1150 levels and currently trading at 1.1198 levels. The pair has made session high at 1.1208 and hit lows at 1.1179 levels. The pair was trading slightly in bullish trend during early hours of European session on Monday. However, it jumped to hit high at 1.1220 after the data showed U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens. Consumer spending edged up 0.1 percent as households cut back on goods purchases after a downwardly revised 0.1 percent gain in January. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5 percent in January. The dollar index was last down 0.23 percent at 95.919. The euro was last up 0.39 percent against the dollar at $1.1207.
GBP/USD is supported in the range of 1.4110 currently trading at 1.4255 levels. It reached session high at 1.4284 and hit low at 1.4210 levels. The pound rose against US dollar on Monday as the dollar was weighted down by weaker-than-expected U.S. economic data reduced concerns about potential interest rate hikes and a dip in oil prices pushed down energy shares. The Commerce Department said consumer spending, which represents more than two-thirds of the U.S. economy, edged up 0.1 percent following a downwardly revised 0.1 percent gain in January. Consumer spending was previously reported to have increased 0.5 percent in January. The cable in the afternoon American hours trimmed some gains made earlier and retreated towards 1.4216 levels, however the pair failed to advance above daily highs and slipped to trade around 1.4250 levels in the late New York session. Trading volume was light with most European markets closed for Easter Monday. U.S. financial markets reopened after being shut on Good Friday.
USD/CAD is supported at 1.3100 levels and is trading at 1.3182 levels. It has made session high at 1.3220 and lows at 1.3160 levels. The Canadian dollar gained against US dollar on Monday as economic data weighed on the greenback, while Canada's finance minister was optimistic that deficit spending will spur higher domestic economic growth. Weaker U.S. data supports the view the Fed would raise interest rates at a gradual pace, weighing on the dollar and in turn helping commodity related currencies. The currency's weakest level was C$1.3286, while it touched its strongest since March 23 at C$1.3183.Meanwhile, January gross domestic product data is awaited on Thursday. Analysts expect 0.3 percent growth for the month, which would reinforce expectations that first-quarter growth will exceed the Bank of Canada's 1 percent forecast.
AUD/USD is supported around 0.7480 levels and currently trading at 0.7544 levels. It hit session high at 0.7566 and made session lows at 0.7526 levels. The Australian dollars edged higher against US dollar on Monday as the currency pair recovered from oversold condition from Fridays lows, while thin liquidity in today’s Asian, European markets due to holiday further eroded the demand for US dollar. The Australian dollar rose to $0.7560, having from Friday low at $0.7491, a level not seen since March 23rd. Meanwhile, All eyes will now be on Fed Chair Janet Yellen, who is due to speak on the U.S. economy and monetary policy on Tuesday, for any indications on the number and timing of rate hikes this year.Hawkish comments from several Federal Reserve officials last week put investors on guard for the possibility of at least two rates increases this year, triggering a widespread correction across commodities and bolstering the dollar, the currency in which commodities are denominated.
Equities Recap
Wall Street ended little changed on Monday as weaker-than-expected U.S. economic data reduced concerns about potential interest rate hikes and a dip in oil prices pushed down energy shares.
Dow Jones closed up by 0.11 percent, S&P 500 ended up by 0.06 percent, Nasdaq finished the day down by 0.14 percent.
Treasuries Recap
U.S. Treasury yields fell on Monday in advance of a $26 billion sale of two-year notes, part of this week's $88 billion in longer-dated government debt supply.
In midday trading, benchmark 10-year Treasury notes traded up 6/32 in price from Thursday for a yield of 1.870 percent, down 2 basis points.
The yield on two-year notes was 0.865 percent, down 0.4 basis point from Thursday's close.
Commodities Recap
Oil futures edged lower for a second straight session on Monday in thin trade as European markets observed the Easter holiday and as hedge funds and other big speculators were still hesitant to wager on a two-month long price rebound amid hefty crude inventories.
Brent settled down 17 cents at $40.27 a barrel. Data showed trading in the London-based benchmark at just over 73,000 lots versus the 200,000 typical on a regular session.
New York-based WTI finished down 7 cents at $39.39
Gold edged up on Monday, as the dollar retreated after weaker-than-expected U.S. data, but stayed close to a one-month low as investors focused on speeches by Federal Reserve officials that could give more clues on potential interest rate increases.
Spot gold was up 0.2 percent at $1,218.62 an ounce by 1253 GMT, after touching a session low of $1,208.15, its cheapest since Feb. 23. The metal lost 3 percent last week, its biggest weekly loss since November on speculation that the next U.S. rate increase could come as soon as next month.
The material has been provided by InstaForex Company – www.instaforex.com