Market Roundup
• China upbeat on U.S. trade talks, but S.China Sea tensions weigh
• U.S. lawmakers to hold border security talks in bid to avert shutdown
• Fed's Bowman says she is comfortable with policy stance
• U.S. inflation expectations steady for past 10 months -NY Fed
• Italian economy to shrink by 0.3 pct this year - JPMorgan
• EU defends Italy's central bank in new spat with Rome
• Oil prices fall 1 pct; slow progress in trade talks counters OPEC cuts
• Pompeo warns allies Huawei presence complicates partnership with U.S
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Looking Ahead - Economic Data (GMT)
• Australia (1830 ET/ 00:30 GMT) Jan NAB Business Confidence, 3 previous
• Australia (1830 ET/ 00:30 GMT) Jan NAB Business Conditions, 2 previous
• Australia (1830 ET/ 00:30 GMT) Dec Housing Finance, -2.8% forecast, -0.9% previous
Looking Ahead - Events, Other Releases (GMT)
• (1830 ET/ 00:30 GMT) Kansas Fed's Esther George to speak at a public conversation hosted by the Kansas City Public Library, in Kansas City
• (04:00 ET/ 09:00 GMT) ECB policymaker Ewald Nowotny to take part in a panel discussion on "The European Fund for Strategic Investments and its potential for Austria"
• (18:30 ET/ 23:30 GMT) Cleveland Fed's Loretta Mester to speak on the economic outlook and monetary policy before the Xavier University and Financial Executives International -- Cincinnati Chapter meeting, in Cincinnati, Ohio
• N/A EU Economic and Financial Affairs Council meeting in Brussels
• N/A ECB Vice President Luis de Guindos to participate in ECOFIN meeting in Brussels
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Monday, as uncertainty regarding the outcome of U.S.-China trade talks this week boosted greenback. The key focus this week is the latest round of trade talks as U.S. negotiators prepare to press China on longstanding demands that it reforms how it treats American companies' intellectual property. The euro was down 0.39 percent at $1.1276. An index that tracks the dollar versus a basket of six major currencies was down 0.48 at 97.10. Immediate resistance can be seen at 1.1337 (5 DMA), an upside break can trigger rise towards 1.1396 (11 DMA).On the downside, immediate support is seen at 1.1300 (Psychological level), a break below could take the pair towards 1.1265 (Lower Bollinger Band).
GBP/USD: The British pound declined against the dollar on Monday, as weak GDP data and uncertainty about Brexit talks weighed on pound. Gross domestic product growth in the final quarter of 2018 fell to a quarterly rate of 0.2 percent from 0.6 percent in the previous quarter, in line with the average forecast. Brexit negotiations continue to hang over the pound and will likely dominate trading in the coming sessions. The pound fell more than 0.58 percent to as low as $1.2841, its weakest since Jan 21. Immediate resistance can be seen at 1.2960 (9 SMA), an upside break can trigger rise towards 1.3018 (11 DMA).On the downside, immediate support is seen at 1.2792 (Lower Bollinger Band), a break below could take the pair towards 1.2772 (Ichimoku Cloud Top).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, as lower oil prices and resurgence in U.S.-China trade frictions weighed on Canadian dollar. The price of oil fell as an uptick in U.S. drilling, a shutdown caused by a fire at a major U.S. refinery and concerns about U.S.-China trade talks all overshadowed support from OPEC-led supply restraint. At (2000 GMT), the Canadian dollar was trading 0.2 percent lower at 1.3301 to the greenback. The currency traded in a range of 1.3261 to 1.3318. Immediate resistance can be seen at 1.3331 (Feb 8th high), an upside break can trigger rise towards 1.3398 (Higher Bollinger Band).On the downside, immediate support is seen at 1.3246 (5 DMA), a break below could take the pair towards 1.3188 (9 DMA).
USD/JPY: The U.S. dollar strengthened against the yen on Monday, as investors adopted a wait-and-see approach as they tracked developments in U.S.-China trade talks. U.S. negotiators this week will press China on longstanding demands to reform how it treats U.S. companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. The dollar gained 0.6 percent versus the yen to 110.40.Strong resistance can be seen at 110.47 (50 DMA), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 108.45 (9 DMA), a break below could take the pair towards 107.97 (Jan 14th low).
Equities Recap
European shares bounced back on Monday as new-found optimism among investors about the new round of trade talks between Beijing and Washington lifted bourses from one-week lows.
The UK's benchmark FTSE 100 closed up by 0.9 percent, FTSEurofirst 300 ended the day down by 0.86 percent, France’s CAC finished the up by 1.1 percent. Germany's Dax finished the day up by 1.1 percent .
Wall Street languished near the starting gate on Monday as investor hopes over U.S.-China trade talks were muted by concerns about possible congressional gridlock and a diminished 2019 earnings outlook..
Dow Jones closed down by 0.29 percent, S&P 500 ended up 0.08 percent, Nasdaq finished the day up by 0.15 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Monday as investors awaited data on Wednesday that will show inflation pressures in January, and as investors focused on trade talks between the United States and China.
Benchmark 10-year notes fell 8/32 in price to yield 2.661 percent, up from 2.632 percent on Friday. The yields have fallen from 2.799 percent on Jan. 18 and are down from a seven-year high of 3.261 percent in October.
Commodities Recap
Gold prices fell on Monday as investors preferred the safety of the dollar in the face of mounting concerns that the U.S.-China trade dispute could slow global growth.
Spot gold was 0.4 percent lower at $1,308.75 per ounce at (2005 GMT).U.S. gold futures settled down 0.5 percent at $1,311.9 per ounce.
Oil prices fell about 1 percent on Monday as worries surrounding the resumption of U.S.-China trade talks overshadowed support from OPEC-led supply restraint.
Brent crude futures lost 49 cents, or 0.8 percent to $61.61 a barrel by (1753 GMT).U.S. West Texas Intermediate (WTI) crude fell 65 cents, or 1.2 percent, to $52.07 a barrel.
