Market Roundup
CFTC IMM CTA data – Specs up net long USD bets to highest since early Feb, EUR shorts largest since early Jan, 59.5k contracts, JPY 54.7k, GBP 81.4k.
BoJ to stand pat, may highlight disparity over growth, prices – Reuters.
Japanese investors stampede into foreign stock funds – Nikkei.
US CommSec Ross - Japan trade deal a very high priority – Nikkei.
Japan Jan core machinery orders -3.2% m/m, -8.2% y/y, +0.5% and -3.3% forecast m/m fall largest in 5-months, y/y in 8-months, Q1 ’17 CAPEX off to bad start.
Japan Feb domestic corp goods prices +0.2% m/m, +1.0% y/y, Jan +0.5%, +0.6%, y/y gain best in over two years.
PBOC Pan – To balance growth, risk prevention – MNI.
White House civil war breaks out over trade, fiery meeting in Oval Office between economic nationalists and pro-trade moderates – Financial Times.
US NEC Cohn – Fed doing good job, respects independence – Reuters.
EU prepares for Britain to trigger start of Brexit, May could have authority to invoke Article 50 by Tuesday – Financial Times.
Iceland govt – Capital controls could be lifted this week – Reuters.
New Zealand Feb REINZ median house prices +0.3% m/m, +14.1% y/y.
New Zealand Fed food prices +0.2% m/m, +2.2% y/y.
Economic Data Ahead
(0200 ET/0700 GMT) Sweden Feb unemployment; last 7.8%.
(0400 ET/0900 GMT) Italy Jan industrial output, -0.8% m/m, +3.3% y/y eyed; last +1.4%, +6.6%.
(0900 ET/1400 GMT) United States Feb employment trends index; last 130.0.
Key Events Ahead
N/A China National People’s Congress.
N/A Norway NOK6 bln NST38 12-month bill auction.
(0400 ET/0900 GMT) ECB Pres Draghi/VP Constancio, Europe parliament members Franfkurt meet.
(0500 ET/1000 GMT) Italy E2.25-75/3-3.5/2-2.75/2-2.75 bln 0.05/1.85/2.45/3.25% 2019/24/33/46 BTP auctions.
(0530 ET/1030 GMT) Germany E2 bln 6-month Bubill auction.
(0600 ET/1100 GMT) Riksbank DepGov Kerstin speaks in Varberg, Sweden.
(0745 ET/1245 GMT) ECB Lautenschlaeger speaks in Dublin.
(0850 ET/1350 GMT) France E3.3-3.7/1.2-1.6/1.3-1.7 bln 3/6/12-month BdF note auctions.
(0900 ET/1400 GMT) ECB Pres Draghi/VP Constancio/ChiefEcon Praet at Frankfurt ECB/MIT event.
FX Beat
DXY: The dollar eased across the board on profit-taking, while investors await the Federal Reserve's two-day policy meeting outcome. The greenback against a basket of currencies traded 0.2 percent down at 101.14, having hit a low of 101.11 earlier, its lowest since Feb. 28. FxWirePro's Hourly Dollar Strength Index stood at -112.03 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro rose to a near one-month high after a new French presidential election poll on Saturday showed Emmanuel Macron is still likely to defeat candidate Marine Le Pen and as European Central Bank policymakers raised the possibility of hiking interest rates before bond purchases end. The European currency traded 0.3 percent higher at 1.0699, having hit a high of 1.0700 earlier in the day. FxWirePro's Hourly Euro Strength Index stood at 145.90 (Highly Bullish) by 0400 GMT. Investors now await European Central Bank President Mario Draghi's comments, ahead of the U.S. economic fundamentals. Immediate resistance is located at 1.0755 (78.6 % retracement of 1.0828 and 1.0493), a break above targets 1.0800. On the downside, support is seen at 1.0658 (23.6% retrace of 1.0700 and 1.0525), a break below could drag it near 1.0612 (50% retrace).
USD/JPY: The dollar edged down on the back of Friday's mixed U.S. jobs report and continuous selling in the greenback amid a fresh bout of profit-taking. However, the downside remains limited on expectations that the U.S. Federal Reserve will raise interest rates at its two-day policy meeting ending on Wednesday. The pair traded 0.06 percent down at 114.70, having hit a high of 115.50 in the previous session, its highest since Jan. 19. FxWirePro's Hourly Yen Strength Index stood at -108.26 (Highly Bearish) by 0400 GMT. Investors’ will continue to track price action in the U.S. Treasury yields, ahead of the U.S. Labour Market Conditions Index. Immediate resistance is located at 115.10, a break above targets 115.50/115.75. On the downside, support is seen at 114.38 (5-DMA), a break below could take it lower 114.00.
GBP/USD: Sterling rose against the dollar as the greenback eased on profit taking following the release of mixed U.S. jobs data. However, it skidded to an eight-week low against the euro on news that the European Central Bank was likely to raise interest rates before ending its quantitative easing programme. The major trades 0.2 percent higher at 1.2188, having hit a low of 1.2132 last week, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at 52.03 (Bullish) by 0400 GMT. Investors’ focus will remain on Bank of England policy meeting due later in the week and developments surrounding the Brexit process for further momentum on the pair. Immediate resistance is located at 1.2200, a break above could take it near 1.2236 (38.2 % retracement of 1.2569 and 1.2133). On the downside, support is seen at 1.2132 (Mar 9 Low), a break below targets 1.2100. Against the euro, the pound trades 0.1 percent down at 87.81 pence, having hit a fresh 8-week low of 87.87 earlier.
AUD/USD: The Australian dollar gained, extending gains for the second straight day in wake of ongoing broad U.S. dollar weakness and higher gold and copper prices. However, expectations of faster rate hikes by the Federal Reserve weighed on Aussie bull's sentiments. The major trades 0.47 percent up at 0.7569, having touched a low of 0.7491 on Thursday, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at 21.85 (Neutral) by 0500 GMT. Markets will continue to track overall market sentiment, ahead of the U.S. LMCI data. Immediate support is seen at 0.7524 (23.6 % retracement of 0.7632 and 0.7491), a break below targets 0.7500. On the upside, resistance is located at 0.7859, a break below could drag it above 0.7500.
NZD/USD: The New Zealand dollar advanced, pulling away from a 9-week low hit in the previous week as the U.S. dollar weakened across the board on profit taking. However, divergent monetary policy outlooks between the Federal Reserve and the RBNZ limited the major's upside. The pair trades 0.3 percent higher at 0.6941, after falling as low as 0.6890 on Thursday, it’s lowest since Jan. 4. FxWirePro's Hourly Kiwi Strength Index was at 38.31 (Highly Bearish) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of the U.S. macroeconomic fundamental drivers for further momentum. Immediate resistance is located at 0.6950, a break above could take it near 0.6973 (23.6% retrace of 0.7244 and 0.6890). On the downside, support is seen at 0.6890 (Previous Session Low), a break below could drag it near 0.6850.
Equities Recap
Asian shares advanced following overnight gains on the Wall Street, while the dollar eased across the board despite Friday’s better-than-expected nonfarm payroll report.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Tokyo's Nikkei gained 0.07 percent to 19,618.95 points, Australia's S&P/ASX 200 index fell 0.34 percent to 5,755.80 points and South Korea's KOSPI was trading 1.10 percent up at 2,119.87 points.
Shanghai composite index edged up 0.52 percent to 3,229.23 points, while CSI300 index was trading 0.71 percent up at 3,452.18 points.
Hong Kong’s Hang Seng was trading 1.28 percent higher at 23,870.29 points. Taiwan shares added 0.7 percent at 9,697.34 points.
Commodities Recap
Crude oil prices declined, extending losses for the fifth consecutive session, as U.S. drillers kept adding rigs despite OPEC efforts to curb crude output. International benchmark Brent crude was trading 0.6 percent down at $50.98 per barrel by 0402 GMT, having hit a low of $50.83 earlier, its lowest since Nov. 30. U.S. West Texas Intermediate crude traded 0.64 percent lower at $48.05 a barrel, after falling to a trough of $47.89 earlier in the day, its weakest since Nov. 30.
Gold prices rose, having recovered from 5-week lows touched in the previous session, however, expectations of a U.S. interest rate hike this week limited the upside. Spot gold gained 0.2 percent to $1,206.80 per ounce by 0407 GMT, having tumbled to its weakest since Jan. 31 at $1,194.86 on Friday. U.S. gold futures rose 0.4 percent to $1,205.80 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.581 percent versus the previous close of 2.582, while 5-year yield was 0.001 bps up at 2.3598 percent.
The Australian bonds rebounded on the first trading day of the week as investors remain glued to watch the February employment report, scheduled to be released on March 15. The yield on the benchmark 10-year Treasury note plunged 3-1/2 basis points to 2.95 percent, the yield on 15-year note also dived 3-1/2 basis points to 3.34 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.91 percent.
The New Zealand government bonds jumped Monday at the time of closing, following expectations of a drop in the country’s fourth-quarter gross domestic product (GDP), scheduled to be released on March 15. The yield on the benchmark 10-year bond plunged 3-1/2 basis points to 3.39 percent at the time of closing, the yield on 7-year note also slipped nearly 3-1/2 basis points to 2.94 percent while the yield on short-term 5-year note traded 2-1/2 basis points lower at 2.64 percent.
