Market Roundup
• US Feb Employment trends 131.4 vs 129.9 previous.
• Scottish leader Sturgeon demands Indyref2 before Brexit, May spokesman says new vote would be divisive.
• UK lawmakers reject attempt to give parliament greater say over Brexit terms.
• UK PM May's hand moves closer to Brexit trigger; call for Indyref2 not affected timing of A50 trigger.
• Euro Zone bond yields fall, spotlight on Draghi, marts seek clarification from ECB chief Draghi Re: higher rates discussion.
• Europe to tell G20 it will resist protectionism –document.
• French IFOP Fiducial election poll: Macron seen beating Le Pen 60.5% to 39.5% in run-off.
• Germany's Schaeuble says scope for tax cuts is limited.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia NAB Business Conditions Feb 16-previous
• 00:30 Australia NAB Business Confidence Feb 10- previous
• 02:00 China Urban investment (ytd)yy* Jan forecast ,8.2%, 8.10%- previous
• 02:00 China Industrial Output YY* Jan forecast 6.2%, 6.00%- previous
• 02:00 China Retail Sales YY* Jan forecast 10.5%, 10.90%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0580 levels and currently trading at 1.0657 levels. The pair has made session high at 1.0679 and hit lows at 1.0652 levels. Euro declined against the dollar on Monday as the dollar strengthened after last week’s strong U.S. employment report solidified the view that the Federal Reserve will increase interest rates when its policy makers meets this week. The Federal Open Market Committee will hold a two-day monetary policy meeting, which starts on Tuesday. Fed funds futures on Monday have priced in a nearly 90-percent chance the Fed will hike rates on Wednesday. In afternoon trading, the dollar was slightly stronger against a basket of currencies at 101.33 and was marginally up against the euro. The single European currency was last at $1.0658, down 0.1 percent. The dollar index earlier fell to a two-week low of 101.01.
GBP/USD is supported in the range of 1.2133 levels and currently trading at 1.2226 levels. It reached session high at 1.2250 and dropped to session low at 1.2220 levels. Sterling rose against the dollar on Monday after Scotland's First Minister Nicola Sturgeon demanded a fresh Scottish independence referendum but said it should take place at the earliest in late 2018. The pound strengthened against its major counter parts after Sturgeon said she would seek authority from the UK government which is preparing to trigger formal talks on Britain's exit from the European Union to hold a new vote. But Sturgeon's time frame for the referendum, which at the earliest could happen by the end of next year when Brexit talks likely to be end, partially eased concerns about the issue adding to more political risk this year. Sterling last traded at $1.2223, nearly 15 ticks above levels seen when Sturgeon started speaking. It rose by the same percentage on the day to 87.21 pence per euro, its highest level in eight weeks.
USD/CAD is supported at 1.3386 levels and is trading at 1.3444 levels. It has made session high at 1.3445 and lows at 1.3429 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday after investors braced for an expected U.S. interest rate hike this week. A Federal Reserve rate increase would be the second in four months, a pace unseen since the peak of the U.S. housing boom in 2006. It follows data on Friday which showed U.S. employers hired workers at a robust pace in February. Oil prices hovered around three-month lows as rising inventories and drilling activity in the United States offset optimism over OPEC's efforts to restrict crude output and reduce a global glut. The Canadian dollar was last trading at C$1.3444 to the greenback, or 74.35 U.S. cents, slightly stronger than Friday's close of C$1.3463, or 74.28 U.S. cents. Canadian manufacturing sales data is due on Friday. Sales are expected to have decreased by 0.4 percent in January after rising for the previous two months.
AUD/USD is supported around 0.7546 levels and currently trading at 0.7576 levels. It hit session high at 0.7591 and made session lows at 0.7573 levels. The Australian dollar declined against its US counterpart in the US session as Australian dollar was weighed down after oil prices fell and traders anticipated that Federal Reserve will increase interest rates at Wednesday's policy meet. The Federal Open Market Committee will hold a two-day monetary policy meeting, which starts on Tuesday. Fed funds futures on Monday have priced in a nearly 90-percent chance the Fed will hike rates on Wednesday. With a rate hike widely expected, market watchers will be looking for signals about the pace of future increases. The Australian dollar stood at $0.7573, from a trough of $0.7541 touched on Friday. The dollar edged up 0.1 percent against a basket of key world currencies, recovering after Friday's bout of profit-taking following the robust U.S. jobs report.
Equities Recap
European shares inched higher on Monday as gains among miners more than offset weaker oil stocks, while fresh dealmaking activity lifted mid-caps.
UK's benchmark FTSE 100 closed up by 0.4 percent, the pan-European FTSEurofirst 300 ended the day up by 0.48 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 0.2 percent.
U.S. stocks ended little changed in light volume on Monday, with traders eyeing a Federal Reserve meeting expected to result in an interest rate increase later this week.
Dow Jones closed down by 0.10 percent, S&P 500 ended up 0.04 percent, Nasdaq finished the day up by 0.24 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Monday in anticipation of a Federal Reserve interest rate increase on Wednesday,
nervousness that the central bank could indicate a more aggressive pace of future rate hikes, and new corporate bond supply.
Prices for benchmark 10-year Treasuries were last down 9/32 to yield 2.615 percent, from a yield of 2.582 percent late on Friday.
U.S. 30-year Treasuries prices were down 18/32 to yield 3.201percent, inching just above Friday's session high to mark a roughly three-month peak in yield.
Two-year yields, which are considered the most vulnerable to Fed policy, were last up about two basis points from late Friday at 1.376 percent.
Commodities Recap
Oil prices were steady to soft after touching three-month lows on Monday, testing a slide that began last week when the market became less optimistic that OPEC's efforts to restrict output would reduce a global oil glut amid swelling U.S. supplies.
Brent crude futures fell 6 cents to $51.31 a barrel by 1:30 p.m. Eastern (1730 GMT), having earlier hit a session low of $50.85, the lowest level since Nov. 30.
U.S. West Texas Intermediate crude (WTI) fell 17 cents to $48.32 a barrel.
Gold prices were little changed on Monday as the prospect of imminent interest rate rises kept them near the five-week lows touched last week, while elections in Europe created uncertainty and fueled investor buying.
Spot gold was down 0.01 percent at $1,204.30 an ounce by 3:08 p.m. EST (1908 GMT). That compares with $1,194.55 last Friday, its lowest level since Jan. 31. U.S. gold futures settled up 0.1 percent at $1,203.10.
