Market Roundup

•    Fed’s Kaplan: Skeptical on negative rates, negative rates can hurt banking, money & CP markets.

•    China’s Li: China economy shows positive signs but pressure lingers will push forward w/supply side reforms.

•    USD/JPY recoups some losses on Japan intervention fears, Japan’s Suga warns again on “1-sided” moves.

•    Swiss sight deposits hit record, suggesting franc interventions.

•    Doha oil meet may not deliver 'bullish surprise' – Goldman Sachs.

•    Brazil YE’16  inflation lower to 7.14% from 7.28% previous, YE ’16 Selic rate steady at 13.75%.

•    Mexico's ANTAD says same-store sales in March rose 5.8%.

Looking Ahead – Economic Data (GMT)

•    23:50 Japan Bank Lending YY Mar 2.20%-previous

•    01:30 Australia NAB Business Conditions Mar 8- previous

•    01:30 Australia NAB Business Confidence Mar 3- previous

Looking Ahead – Events, Other Releases (GMT)

•    No Significant Events

Currency Summaries

EUR/USD is likely to find support at 1.1374 levels and currently trading at 1.1405 levels. The pair has made session high at 1.1448 and hit lows at 1.1394 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 on global growth. With no major U.S. data on the day, dollar sold off early, most of the majors gained against dollar as investors looked towards reports later in the week to shed more light on the U.S. inflation picture. A number of U.S. Federal Reserve policymakers are scheduled to speak this week, but analysts held out little hope that their comments would significantly revive expectations for interest rate rises this year. Fed Chair Janet Yellen's caution on policy has cooled any thoughts of a rise before mid-year even as a number of her colleagues have sounded more bullish. On Wednesday, investors will get readings on March's U.S. retail sales and producer price index, and on Thursday the government will release consumer price index figures. All three metrics will be closely watched by investors as they could signal that inflation is rising faster than anticipated.

GBP/USD is supported in the range of 1.4165 currently trading at 1.4226 levels. It reached session high at 1.4286 and hit low at 1.4224 levels. The sterling rose against dollar on Monday as the sterling found upward movement supported by rise in European equities. 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 related currencies as crude prices touched a four-month high on Monday in a rally fueled by strong markets across commodities, ahead of a meeting of oil producers in Doha next Sunday. This week’s focus shifts to Bank of England monetary policy meeting and minutes.BoE is likely to maintain the Bank Rate and stock of purchased assets unchanged at 0.50% and GBP375bn, respectively .The currency's strongest level of the session was $1.4286, while $1.4223 was its weakest since April 5th.

USD/CAD is supported at 1.2850 levels and is trading at 1.2898 levels. It has made session high at 1.2954 and lows at 1.2884 levels. The Canadian dollar firmed against US dollar on Monday, as Canadian dollar was supported by rise oil prices which rose to wards 42$ per barrel. The outlook for Canada's economy is improved ahead of the Bank of Canada interest rate announcement mid-week. The Bank of Canada is widely expected to hold interest rates at 0.5 percent on Wednesday. After a run of better-than-expected economic data at the start of the year, the central bank is expected to raise its growth forecasts, which will also incorporate the anticipated impact from the government's recently announced stimulus measure. The currency's weakest level of the session was C$1.3015, while C$1.2925 was its strongest since March 31.

USD/JPY is supported around 107.50 levels and currently trading at 107.97 levels. It hit session high at 108.44 and made session lows at 107.75 levels. The Japanese yen gained modestly against US dollar on Monday as traders remained cautious on safe heaven Japanese yen on anxiety of intervention by the Bank of Japan. Chief Cabinet Secretary Yoshihide Suga said overnight that the Group of 20's agreement to avoid competitive devaluations did not mean Japan cannot intervene against currency moves. In mid-morning trading, the dollar was little changed at 108.00 yen Earlier the dollar fell to a 107.64 yen, the lowest since October 2014. The greenback has fallen three straight weeks against the Japanese currency. The yen also fell against the euro, which rose 0.4 percent to 123.69 yen, the euro also rose 0.3 percent against the dollar to $1.1438.

Equities Recap

European shares rose on Monday, reversing earlier losses thanks in part to gains in Italian banks and mining stocks.

UK's benchmark FTSE 100 closed up 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.36 percent, Germany's DAX ended up by 0.8 percent, France’s CAC finished the day up by 0.3 percent.

U.S. stocks gave up earlier gains and closed slightly lower  as investors girded for the start of an earnings season expected to be gloomy.

Dow Jones closed down by 0.11 percent, S&P 500 ended down by 0.27 percent, Nasdaq finished the day down by 0.36 percent.

Treasuries Recap 

U.S. Treasury yields were flat on Monday as growing hopes of stimulus in China and the potential for intervention in Japan helped support bids for riskier assets like oil and stocks.

Longer-dated yields rose modestly while shorter-dated maturities were generally unchanged, with the 30-year bond surrendering 3/32 in price to yield 2.565 percent.

The 2-year note was unmoved with a yield of 0.7027 percent.

Benchmark 10-year Treasury yields fell 1/32 in price to yield 1.727 percent.

Commodities Recap

Gold prices rose to their highest in almost three weeks on Monday, setting the market on course toward $1,300 an ounce, drawing confidence from continued ultra-low interest rates.

Spot gold hit $1,258.70 an ounce, its highest since March 22, before retreating slightly to $1,255.93 at 2:33 p.m. EDT (1833GMT), up 1.3 percent.

U.S. gold futures for June delivery settled up 1.1 percent.

Brent crude prices touched a four-month high on Monday in a rally fueled by strong markets across commodities, ahead of a meeting of oil producers in Doha next Sunday aimed at freezing current output levels.

Brent crude futures, the global benchmark, settled up 89 cents, or 2.12 percent at $42.83 a barrel. U.S. crude futures settled up 64 cents, or 1.6 percent, at $40.36 a barrel.

The material has been provided by InstaForex Company – www.instaforex.com