Market Roundup
• US factory data (-1.7% in Feb) signals further slowdown in GDP growth, Core capital goods orders revised to show steeper decline.
• Dovish Rosengren expects earlier Fed rate hike than does market, overseas risks to US economy abating.
• SNB’s Jordan: central bank has scope for more easing, CHF remains significantly overvalued.
• GS cuts its Q1 GDP tracking estimate by two tenths to 1.2%.
• Oil falls on growing doubts producers will freeze output, Iran says it aims to regain pre-sanctions output.
• Greece says bailout review must be concluded immediately; Greek debt haircut not up for debate – German FinMin.
• IMF: global market shocks from China will only increase.
Looking Ahead – Economic Data (GMT)
• 23:30 Australia AIG Services Index* Mar 51.8-previous
• 00:00 Japan Overtime Pay* Feb -1.30%- previous
• 01:30 Australia Trade Balance G&S (A$)*Feb forecast -2600m, -2937m- previous
• 01:30 Australia Goods/Services Imports* Feb -0.01- previous
• 01:30 Australia Goods/Services Exports* Feb 1.00%- previous
Looking Ahead – Events, Other Releases (GMT)
• 04:30 Australia- Reserve Bank of Australia holds interest rate meeting, No change expected (2%)
• 05:00 US FRB of Chicago President Charles Evans speaks on current economic conditions and monetary policy before the Credit Suisse Asian Investment Conference 2016.
Currency Summaries
EUR/USD is likely to find support at 1.1350 levels and currently trading at 1.1395 levels. The pair has made session high at 1.1411 and hit lows at 1.1354 levels. The pair was trading slightly in lower range during the European session on Monday. However, it rebounded strongly after the dollar resumed its move lower in the US session after the impact of comments from a U.S. Federal Reserve official faded.Federal Reserve Chair Janet Yellen last week said that the central bank should proceed with cautiously on raising interest rates continued to weigh on the dollar. The euro was last up 0.04 percent against the dollar, at $1.1390,after touching a 5-1/2-month high of $1.1437 on Friday. The dollar index, which measures the greenback against a basket of six major currencies, was last mostly flat at 94.636.
GBP/USD is supported in the range of 1.4240 currently trading at 1.4263 levels. It reached session high at 1.4319 and hit low at 1.4264 levels. The pound edged higher against US dollar on Monday by edging higher from 1.4188 to 1.4316 by gaining almost 150 pips. Sterling bounced almost half a percent against the dollar erasing some losses suffered on Friday after strong US jobs report. Global investors worry that leaving the EU would threaten the huge foreign investment flows Britain needs to fund its current account deficit, one of the biggest in the developed world at around 5 percent of gross domestic product. Meanwhile on the data front, the Markit/CIPS UK Construction Purchasing Managers' Index (PMI) printed better figures at 54.2 in March, matching February's 10-month low and holding above a consensus forecast at 54.0.
USD/CAD is supported at 1.3000 levels and is trading at 1.3075 levels. It has made session high at 1.3081 and lows at 1.2996 levels. The Canadian dollar weakened slightly against US dollar on Monday as crude oil slipped sharply below $38 a barrel and investors were skeptic whether a deal will be reached to cut output, although the currency traded in a narrow range as the market braced for trade and employment data later in the week. The Canadian dollar has given up some of its recent gains, after briefly hitting a 5-1/2-month high at C$1.2859 on Thursday, when stronger than expected economic growth in January further dented expectations for a Bank of Canada rate cut. Oil prices dipped as investors ditched some of their bullish bets on another price rise and the chances that top exporters will agree to rein in overproduction appeared to fade. Canadian trade data for February is due on Tuesday, with economists watching for further strength in the export sector. The March unemployment report is due at the end of the week.
AUD/USD is supported around 0.7596 levels and currently trading at 0.7604 levels. It hit session high at 0.7621 and made session lows at 0.7600 levels. The Australian dollar declined from eight-month highs on Monday ahead of RBA minutes as the pair succumbed to profit taking after a mixed bag of domestic economic data disappointed some investors earlier in the in the Asian session. Traders are keeping a close eye on the RBA, which is set to release its latest policy minutes. The Australian dollar declined towards $0.7596, having touched 0.7723 on Thursday its highest since June 28. A break above $0.7655, would retest 0.7723 levels. Meanwhile The Reserve Bank of Australia (RBA) is considered almost certain to keep the cash rate unchanged at a record low 2.0 percent.
Equities Recap
European shares bounced back from one-month lows on Monday, led higher by gains in defensive stocks, but telecoms fell after talks between Orange and Bouygues on creating a dominant French operator collapsed.
Britain's blue-chip FTSE 100 index closed up by 0.27 percent, France's benchmark CAC-40 index closed up by 0.38 percent, Germany's DAX ended up 0.01 percent, meanwhile the pan-European Eurofirst 300 index was up by 0.38 percent.
Wall Street was mostly flat in quiet trading on Monday as investors took a break from a recent rally, which helped indexes recover from a steep selloff at the start of the year.
U.S. stocks ended weaker on Monday, pulling back after recent gains, as materials and industrial shares weighed.
Treasuries Recap
U.S. Treasury yields edged down on Monday, with benchmark yields hovering near one-month lows as doubts about the durability of the U.S. economic expansion supported views the Federal Reserve may slow the pace of interest rate hikes.
Benchmark U.S. 10-year Treasury yields fell 2 basis points to 1.772 percent. They hit 1.753 percent earlier on Monday, the lowest since March 1.
Commodities Recap
Gold fell on Monday after strong U.S. economic data boosted investor risk sentiment and a top U.S. Federal Reserve official said an interest rate hike is likely to take place ahead of the market's current expectations due to fading economic concerns.
Spot gold eased 0.5 percent to $1,216.10 an ounce by 3:01 p.m. EDT (1901 GMT), while U.S. gold for June delivery settled down 0.3 percent at $1,219 an ounce.
Oil prices fell more than 2 percent on Monday, with Brent touching one-month lows, as investors doubted that producing countries will freeze output to rein in a worldwide glut.
Brent settled down 98 cents, or 2.5 percent, at $37.69 a barrel, touching a March 4 low of $37.60. It is down 11 percent from a 2016 high of $42.54 struck on March 18.U.S. crude finished the session down $1.09.
The material has been provided by InstaForex Company – www.instaforex.com