Today’s Economic events
- Japan trade balance 0.04Tn vs. 0.08Tn
- Australia NAB business confidence 3 vs. 5 previously
- German Ifo business climate 107.3 vs. 108.5
- Italy retail sales m/m 0.30% vs. 0.20%
- UK CBI industrial order expectations -15 vs. -10
Coming up
- ECB President Draghi Speech
The market rally from Friday’s session might have brought some cheer to investors but that was short lived as the markets pulled back, erasing some of the gains. In the Asian session, the Japan Nikkei225 Index closed with modest gains of 0.90% while the Shanghai Composite closed with 0.78% gains. Economic data was light during the Asian session and with the Australian markets closed on account of a Bank holiday, the Yen was seen appreciating in early trading. USDJPY is down -0.21% for the day after posting an intraday low to 118.165Yen before retracing some of those losses. The Yen gained broadly across the board after weakening on Friday. The AUDUSD was weak and is currently down -0.33% for the day after initially rallying to an intraday high of 0.7028, while the NZDUSD is down by -0.28% after testing the highs near 0.653.
In Europe, the markets were mixed but broadly flat. The German DAX is up a mere 0.02% for the day while the London FTSE100 was up 0.07% at the time of writing. Data from Europe included the German Ifo business confidence which fell to 107.3 from 108.5 estimates while Italy’s retail sales rose 0.30%, better than the 0.20% expected increase. EURUSD gained 0.13% for the day trading at 1.0815 at the time of writing. The GBPUSD is trading flat with losses of -0.03% after the Cable fell to lows of 1.4235.
[Tweet “WTI Crude Oil prices are down by over -2.0% trading at $28.32 a barrel”]
The markets gave back the gains as Oil prices failed to hold on the strong gains made last week. WTI Crude Oil prices are down by over -2.0% trading at $28.32 a barrel. The declines came about as Saudi Arabia said that it was keeping its investments in the energy sector unchanged while data from China showed a fourth consecutive month of decline on Diesel consumption. Crude Oil prices posted sharp gains on Friday, testing the $30 handle and gave hopes to the market participants that a bottom was forming. However, this morning’s decline saw Oil prices pulling down the equity assets as well. Oil prices remain volatile as news hit the wires that OPEC head is likely to call for an emergency meeting including non-OPEC producers to stem the global oversupply to stabilize Oil prices.
Gold prices fared better, gaining 0.58% for the day after prices were seen pulling back off the intraday highs near $1106.
The NY session is likely to remain quiet with no major releases being scheduled. US equity futures are pointing to a weaker start with the Dow Jones down -0.26% while the S&P500 is down -0.17% in pre-market trading. The remainder of the evening is expected to be quiet with the exception of a speech due from Mario Draghi, which could potentially add an event risk to the EURUSD and could spark another risk on sentiment should he choose to come out with dovish comments.
The relatively light trading seen for the most of the Asian and European session comes ahead of an important week which will see the FOMC, RBNZ and the Bank of Japan meet for their monthly monetary policy meetings. Expectations are for all three Central Banks to stand pat on policy while pushing the decision making to March – April meetings.
