Market Roundup
• New U.S. home sales drop 1.5% on sharp decline (-23.6%) in the West, inventory highest since ’09.
• Shinzo Abe Adviser: BOJ may wait until June to act.
• GBP/USD soars to 10-week high as bets on Brexit.
• Oil slips on Cushing build report, weak dollar limits downside.
• Saudi does not expect oil price below $30 due to global demand.
• ECB's Constancio urges further integration of capital markets in Europe.
• Economists cut Brazil's YE ’16 inflation f/c to 6.98% & interest rate to 13.25% (from 13.38)– BCB poll.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1240 levels and currently trading at 1.1215 levels. The pair has made session high at 1.1280 and hit lows at 1.1257 levels. Euro edged higher against US Dollar on Monday after data showed U.S. home sales fell in March. New U.S. single-family home sales unexpectedly fell in March. The Commerce Department said on Monday new home sales decreased 1.5 percent to a seasonally adjusted annual rate of 511,000 units. February's sales pace was revised up to 519,000 units from the previously reported 512,000 units. The euro rebounded against the dollar, hitting a session high of $1.1277 after hitting a nearly four-week low of $1.1213 earlier on Monday. Meanwhile Federal Reserve policymakers are expected to hold interest rates steady at Wednesday's announcement, but markets will be looking for the U.S. central bank's take on the global economy and its monetary policy outlook.
GBP/USD is supported in the range of 1.4400 levels and currently trading at 1.4477 levels. It reached session high at 1.4522 and hit low at 1.4459 levels. Sterling rose sharply US dollar on Monday to a 10-week high against the dollar, as bets on Brexit eased after U.S. President Barack Obama voiced his support for Britain's staying in the European Union. Sterling jumped almost 1 percent on Monday to as high as $1.4520, its strongest since Feb. 15 - five days before the June 23 referendum date was announced. The U.S. Federal Reserve is expected to hold interest rates steady after a two-day meeting set to begin Tuesday, but policymakers may be more upbeat on the economic outlook leaving the path open for future rate hikes. The pound's exchange rate has been at the mercy of any news affecting the chances Britain will vote to leave the EU. It has fallen over 8 percent since last November .
USD/JPY is supported around 110.80 levels and currently trading at 111.19 levels. It hit session high at 111.31 levels and made session lows at 110.80 levels. The U.S. dollar slipped against the yen on Monday as traders took profits from the greenback's recent rally against the Japanese currency, while the dollar weakened against other major currencies on expectations for a dovish Federal Reserve meeting. The Bank of Japan could increase its stimulus measures on Thursday after a policy meeting. The BOJ could increase stimulus, analysts said skepticism that such an increase could weaken the yen lifted the Japanese currency against the dollar, while the prospect of a Fed that would be in no rush to raise interest rates also weighed on the greenback. The dollar hit a session low of 110.85 yen after reaching a more than three-week high of 111.90 yen .
USD/CAD is supported at 1.2640 levels and is trading at 1.2676 levels. It has made session high at 1.2700 and lows at 1.2654 levels. The Canadian dollar gained strength against U.S dollar on Monday as negative US manufacturing data weakened the dollar on broader view that Federal Reserve would go slow on raising interest rate. Stronger-than-expected retail sales data on Friday had helped the loonie rack up last week its fourth week of gains in a row. The currency has rallied 16 percent since falling to a 12-year low in January, helped by a smaller gap between Canadian and U.S. bond yields and a rebound in oil prices since February. The currency's strongest level of the session was C$1.2653, while its weakest was C$1.2717. Last week the loonie touched its strongest since July 6 at C$1.2593.
Equities Recap
European shares fell further below last week's three-month high on Monday, as a slump in French utility EDF and weaker banking stocks pushed the market lower.
UK's benchmark FTSE 100 closed down by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.58 percent, Germany's Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.5 percent.
Energy shares dragged Wall Street slightly lower on Monday, coinciding with a decline in oil prices, while earnings and guidance from companies including Perrigo and Xerox also weighed on U.S. stocks.
Dow Jones closed down by 0.14 percent, S&P 500 ended down by 0.18 percent, Nasdaq finished the day down by 0.22 percent.
Treasuries Recap
U.S. benchmark 10-year Treasury notes dipped 3/32 in price with the yield at 1.899 percent, up 1 basis point on the day. Earlier Monday, the 10-year yield reached 1.907 percent, its highest since March 28.
The two-year note's yield, which is sensitive to traders' views on Fed policy, was 0.834 percent, 1 basis point above Friday's close.
The latest two-year issue cleared at a yield of 0.842 percent, compared with a yield of 0.877 percent at the prior auction in March
Commodities Recap
Gold rose on Monday as a retreat in the U.S. dollar helped to tempt back some buyers after the previous session's 1.3 percent slide, but moves were muted ahead of a Federal Reserve policy meeting this week.
Spot gold was at $1,237.11 an ounce at 1340 GMT, up 0.4 percent, while U.S. gold futures for June delivery settled up 0.8 percent at $1,240.20.
Oil prices fell more than 2 percent on Monday as data pointed to fresh U.S. crude builds, while leading banks in commodities said the two-month long oil market rebound has defied fundamentals.
U.S. crude settled down $1.09, or 2.5 percent, at $42.64 a barrel. Last week, it hit a five-month high of $44.49.
Brent closed down 63 cents, or 1.4 percent, at $44.48. It hit a mid-November high of $46.18 last week.
