Market Roundup
• NY Fed Survey: Inflation Expectations Rebound for Both 1Yr (2.71 vs 2.42% previous) & 3Yr (2.6 vs 2.5% previous).
• USD ticks up vs EUR with Fed meeting in focus; BOJ, RBA, SNB, BoE & Norges also announce decisions.
• Russia eyes global deal on oil output in April, Iran seen exempt.
• Peripherals lead euro zone bond yields lower as ECB boost kicks in.
• ECB's Villeroy says priority to boost financing for real economy.
• Econ activity in Brazil falls for 11th month in Jan, indicating the country's recession deepened at the start of ’16.
• Putin orders start of Russian forces' withdrawal from Syria,Moscow will keep military presence in Syria.
• Brazil’s Wagner: impeachment won't solve Brazil economic crisis.
• Mexico central bank seen holding key interest rate steady at 3.75% on Thursday.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Current Account - Qtrly*Q4 forecast -2.800b, -4.750b-previous
• 21:45 New Zealand Current Account- Annual*Q4 forecast -7.90b, -8.10b- previous
• 21:45 New Zealand Current Account Balance To GDP Q4 forecast -3.2%, -3.3%- previous
• 04:30 Japan Industrial Output Revenue* Jan 3.7%-previous
• 04:30 JP Capacity Utility Index Change* MM Jan -1%- previous
Looking Ahead - Events, Other Releases (GMT)
• 00:30 Australia RBA will release the minutes of March monetary policy meeting
• 02:00 Japan Bank of Japan rate decision
Currency Summaries
EUR/USD is likely to find support at 1.1078 levels and currently trading at 1.1095 levels. The pair has made session high at 1.1130 and hit lows at 1.1077 levels. The pair started to fall from 1.1036 levels in the early European session, it continued its bearish momentum after US market opened and made lows at 1.1072 levels before recovering towards 1.1104.Dollar strengthened against euro on the day as investors tried to get back to neutral positions ahead of this week's two-day Federal Open Market Committee meeting. The euro fell 0.4 percent to trade at $1.1105 also hurt in part by rising stock markets in Europe, which surged more than 3 percent since their close on Thursday after Draghi announced a series of bold easing steps by the ECB. Those steps included an expansion in asset buying and a deeper cut to already negative deposit rates.
GBP/USD is supported in the range of 1.4237 and currently trading at 1.4295 levels. It reached session high at 1.4325 and hit low at 1.4290 levels. Sterling bullish momentum was paused on Monday after Sterling weakened as investors preferred US dollar as investors braced for policy decisions from the U.S. Federal Reserve and other central banks. The Bank of Japan, the Fed, the Bank of England and the Swiss National Bank will all update their policies this week, after the European Central Bank last week cut interest rates, extended its asset-purchase program and pledged new cheap loans for banks. Traders are awaiting the BOE minutes scheduled later in the week, as all eyes will be on BoE Governor Mark Carney tone as traders will be is keenly watching for hints on UK interest rate hike. The pair traded most of the day between 1.4385 and 1.4286 levels. Sterling fell 0.4 percent against the dollar to $1.4332.
USD/CAD is supported at 1.3200 levels and is trading at 1.3267 levels. It has made session high at 1.3307 and lows at 1.3200 levels. The Canadian dollar weakened slightly against US dollar on Monday as crude oil slipped back below $40 a barrel and investors awaited for policy decisions from the U.S. Federal Reserve and other central banks in the coming days. The Canadian dollar, which has appreciated significantly since a Bank of Canada decision in January to hold rates steady, could face pressure if the Fed reaffirms a hiking bias on Wednesday. The dollar rose broadly against major European currencies and commodity-linked currencies as well, rebounding against the higher-yielding Australian, Canadian and New Zealand dollars, which each gained around 2 percent last week as prices for oil, copper and iron ore rose. The currency's strongest level of the session was C$1.3213, while its weakest level was C$1.3307.
AUD/USD is supported around 0.7485 levels and currently trading at 0.7511 levels. It hit session high at 0.7517 and made session lows at 0.7490 levels. The Australian dollar declined from eight-month highs on Monday ahead of RBA minutes ahead of the jobs data later in the week. Traders are keeping a close eye on the RBA, which is set to release its latest policy minutes. The Australian dollar declined towards $0.7485, having touched on Friday its highest since July at $0.7583. A break above would test $0.7655, the 61.8 percent retracement of the $0.8184-$0.6827 move. Meanwhile Investors also are keeping their attention on U.S. Federal Reserve's policy meeting on Tuesday and Wednesday. The central bank's Federal Open Markets Committee is expected to keep interest rates unchanged.
Equities Recap
European equities extended gains on Monday, with auto shares propelled by a positive outlook for the sector and miners helped by a steadying of copper prices below four-month highs.
Britain's blue-chip FTSE 100 index closed up by 0.5 percent, France's benchmark CAC-40 index closed up by 0.2 percent, Germany's DAX ended up 1.6 percent, meanwhile the pan-European Eurofirst 300 index was up by 0.65 percent
Wall Street ended flat on Monday afternoon as losses in energy shares were offset by consumer discretionary gains and investors laid low ahead of a U.S. Federal Reserve meeting.
Dow Jones closed up by 0.08 percent, S&P 500 ended down by 0.13 percent, Nasdaq finished the day up by 0.04 percent.
Treasuries Recap
U.S. Treasury yields rose to record highs on Tuesday after data showed U.S. manufacturing activity rebounded in February in a sign of economic resilience that weakened investor demand for safe-haven government debt.
The benchmark 10-year note rose 4/32 in price to yield 1.960 percent from 1.993 percent on Friday.
The 30-year bond was last up 10/32 in price to yield 2.730 percent, down from 2.762 percent late on Friday.
Commodities Recap
Oil prices fell about 3 percent on Monday on concerns that a six-week market recovery has gone beyond fundamentals as U.S. crude stockpiles continue to build and Iran maintains little interest in joining major producers in freezing production.
U.S. crude futures settled down $1.32, or 3.4 percent, at $37.18 a barrel, while Brent finished down 86 cents, or 2 percent, at $39.53.
Gold turned lower and fell below $1,240 an ounce on Monday, as stock markets and the dollar gained, and investors squared positions ahead of closely watched policy meetings of U.S. and Japanese central banks this week.
Spot gold was down 1.2 percent at $1,233.40 an ounce at 3:19 p.m. EST( 1919 GMT), off an earlier high of $1,260.71.
U.S. gold futures for April delivery settled down 1.1 percent at $1,245.10 an ounce.
