Americas Roundup:sterling Edges up from Seven-Year Low Against Dollar,oil Prices rise to 3 Percent As China Moves to Boost

Market Roundup

  • U.S. pending home sales, -2.5% in Jan, hit 1-year low. Chicago PMI 47.6 in Feb vs 53 forecast. 
  • ECB to cut deposit rate next week, even chance of QE boost – traders.
  • Price falls hammer euro as China cuts required reserve rate.
  • Lack of coordinated plan of action from G20 disappoints.
  • Oil up on Saudi support, China; poll shows less OPEC output.
  • Mexico’s Pemex defers projects amid oil rout, downbeat on prices.
  • Chile copper production drops in January as output cuts bite.
  • Argentina signs agreement in principle with lead holdouts – IFR.
  • Global funds flee stocks (glbl allocation cut to 46%), raise bond holdings to 5-yr high as growth fears mount.

Looking Ahead – Economic Data (GMT)

  • 21:45 New Zealand Terms of Trade QQ*Q4 forecast 0%, -3.7%-previous
  • 21:45 New Zealand Terms of Trade – Exp Vol* Q4 forecast -0.6%, 3.7%- previous 
  •  21:45 New Zealand Terms of Trade – Imports* Q4 forecast -3.5%, 7.3%- previous 
  •  21:45 New Zealand Terms of Trade – Exports* Q4 forecast -4.4%, 3.4%- previous 
  •  22:30 Australia AIG Manufacturing Index* Feb 51.50- previous 
  •  23:30 Japan All House hold Spending YY*Jan forecast -2.7%, -4.4%- previous 
  • 23:30 Japan All House hold Spending MM*Jan forecast 0.3%, 1%- previous 
  • 23:30 Japan Jobs/Applicants Ratio*Jan forecast 127%, 127%- previous 
  • 23:30 Japan Unemployment Rate*Jan forecast 3.3%, 3.3%- previous 
  •  23:50 Japan Bus Capex (MOF) YY* Q4 11.2%- previous 
  •  02:00 Japan Nikkei Mfg PMI* Feb 50.2- previous 
  •  01:00 China NBS Non-Mfg PMI* Feb 53.5-previous
  • 01:00 China NBS Manufacturing PMI* Feb forecast 49.3, 49.4-previous
  • 01:45 China Caixin Mfg PMI Final Feb forecast 48.3, 48.4-previous

Looking Ahead – Events, Other Releases (GMT)

  • 03:330 Australia- Reserve Bank of Australia holds interest rate meetingCurrency SummariesEUR/USD is likely to find support at 1.0800 levels and currently trading at 1.0874 levels. The pair has made session high at 1.0891 and hit lows at 1.0856 levels. The euro extended losses against US dollar on Monday, as the euro was weighted down by downbeat CPI data. Headline inflation, the key indicator watched by the ECB, fell to -0.2 percent from 0.3 percent a month earlier, far from the bank’s target of close to 2 percent and below already muted expectations for unchanged prices. The data is more likely to put pressure on ECB to further ease its monetary policy on March 10. The pair fell from 1.0930 levels to hit daily lows at 1.0865 in the US session before recovering towards 1.0880 levels in the late trading hours. The euro hit $1.0859, its lowest level against the dollar since the start of the monthGBP/USD is supported in the range of 1.3832 and currently trading at 1.3913 levels. It reached session high at 1.3932 and hit low at 1.3864 levels. Sterling recovered modestly on Monday as month-end rebalancing flows helped sterling recover towards1.3915, though the currency stayed close to a seven-year low on worries about a potential British exit from the European Union. Sterling has been hit by worries that a “Brexit” would threaten the huge foreign investment flows Britain needs to balance its current account deficit, one of the biggest in the developed world at around 4 percent of output. The pound had earlier in the day fallen to as low as $1.3836, its weakest since March 2009. On a trade-weighted basis, it was on track for its worst month since the height of the financial crisis in 2008. The pound has also been undermined by expectations that an exit would push back the horizon for a Bank of England interest rate rise.USD/JPY is supported around 122.00 levels and currently trading at 122.74 levels. It to hit session high at 123.00 and made session lows at 122.65 levels. The Japanese yen edged higher against US dollar on Monday as investors sought safety after a statement from the Group of 20 countries offered no concrete action to address concerns about slow growth and low inflation. Further the dollar declined against Japanese yen after weaker-than-expected data on the Chicago manufacturing sector and U.S. pending home sales data also pushed the dollar lower versus the yen. Chicago manufacturing report for February, showed the index fell to 47.6 from 55.6 in January, and data showing U.S. pending home sales fell an unexpected 2.5 percent last month, also boosted the yen. The dollar was last down more than 1 percent against the yen, traditionally investors’ safe haven of choice in times of global stress, after hitting a session low of 112.67 yen the euro was off 1.5 percent against the yen after hitting a session low of 122.47 yen.USD/CAD is supported at 1.3500 levels and is trading at 1.3534 levels. It has made session high at 1.3579 and lows at 1.3480 levels. The Canadian dollar firmed against its U.S. counterpart on Monday after crude oil rebounded from  $35.0 levels and the world’s second largest commodity consumer China eased monetary policy in an attempt to influence growth. Oil prices strengthened on rising hopes that the market has bottomed out and as OPEC kingpin Saudi Arabia said it would work with other producers to limit oil market volatility. The risk-sensitive commodity currency rose 1.8 percent last week as crude oil prices and global stocks rallied. On the data front, Canada’s current account deficit widened modestly in the fourth quarter to C$15.38 billion from a revised C$15.31 billion in the third quarter. Meanwhile, Canadian producer prices rose 0.5 percent in January, the first gain in six months, as higher costs for vehicles offset lower energy pricesEquities RecapEuropean shares fell on Monday but were off earlier lows as a decision by China to resume its easing cycle partly offset disappointment over the G20 meeting failing to agree new measures to boost growth.UK’s benchmark FTSE 100 down UP by 1.43 percent, the pan-European FTSEurofirst 300 ended the day up by 0.40 percent, Germany’s Dax ended Down by 0.49 percent, France’s CAC finished the day up by 0 percent.Wall Street fell on Monday, breaking from its recent lockstep with oil prices as a recovery in recently beaten-down utilities stocks was offset by a drop in healthcare and energy shares.Dow Jones closed down by 0.77 percent, S&P 500 ended down by 0.88 percent, Nasdaq finished the day down by 0.72 percent.Treasuries RecapLong-dated U.S. Treasury prices rose on Monday after weaker-than-expected domestic data supported the view that the Federal Reserve could slow the pace of interest rate hikes this year, adding appetite for safe-haven government debt.The benchmark 10-year note was last up 6/32 in price to yield 1.741 percent, down from 1.764 percent late on Friday.The 30-year bond was last up 16/32 in price to yield 2.609 percent, down from 2.636 percent on FridayCommodities RecapGold rose 1 percent on Monday, boosted by lower equities and weak U.S. data, leaving the metal well placed to log its best monthly performance in four years as turmoil in wider markets increased its safe-haven appeal.Spot gold rose 1.3 percent to $1,238.41 by 2:56 p.m. EST (1956 GMT) and was on track to finish February up 10.6 percent, its strongest monthly performance since January 2012.U.S. gold futures for April delivery settled up 1.1 percent at $1,234.40 an ounce.Oil prices jumped 3 percent on Monday after China moved to boost its slowing economy, a drop in crude output from OPEC and the U.S., and a pledge by Saudi Arabia to limit market volatility, suggesting a 20-month selloff could be hitting a bottom.Brent crude’s front-month contract April settled up 87 cents, or 2.5 percent, at $35.97 a barrel before expiring and going off the board. May Brent settled up $1.13, or 3.2 percent, at $36.57 a barrel.U.S. crude’s front-month settled up 97 cents, or 3 percent, at $33.75.

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