Key overnight events:
- Crude oil futures expiring in April continued its recent recovery, shrugging off an early session 2.5% loss and reaching an intraday high of $35.17/bbl, before finally closing 0.8% higher.
- The Energy Information Administration said fuel plants processed 16 million barrels a day of crude last week, the highest level for this time of year in data going back to 1989. Gasoline inventories fell, but US crude inventories rose to its highest since 1930.
- ADP employment for February was 214,000, higher than the expected 190,000, providing optimism for non-farm payrolls due for release tomorrow night.
- The Fed Beige Book showed modest growth throughout most of the US, though wage growth was mixed.
- Underpinned by energy producers and positive ADP numbers, the S&P 500 Index gained 0.4% to extend its advance for the week to 2%.
- Spot 1.3929
- Singapore’s purchasing managers index for February came in at 48.5, worse than the 48.9 expected, registering its lowest reading since Oct 2012.
- USDSGD traded below its 200-day moving average of 1.3976 for only the second time since Sep 2014. It currently looks poised to test the next support level of 1.3861, its year-to-date low.
- Spot 0.7305
- AUDUSD soared to a new 2016 high of 0.7321 this morning, as the Australian dollar continues to gain strength following yesterday’s stellar GDP numbers.
- The currency pair’s ascent has resulted in a breakout above its 200-day moving average of 0.7252. The last time AUDUSD traded above the 200-dma was back in Sep 2014.
- The important resistance level of 0.7385 looks set to be tested and, if broken, could signal a possible trend reversal.
- Spot 1.3419
- USDCAD rose to a high of 1.3499 last night, but pared all of its gains this morning. The strong rejection at the 1.3500 handle confirms the significant breakout that occurred last week.
- 1.3291 is the next support level below.
- Canada’s recent GDP numbers, which were better than expected, could be enough to persuade BoC Governor Poloz to stand pat at next week’s interest decision on 9th Mar, Bloomberg reports.
- Spot 6.5452
- Onshore yuan advances for the 3rd day after the PBOC raised currency fixing by the most in 2 weeks this morning. USDCNH declined as much as 0.2% as a result.
- The Caixin China Services and Composites PMIs came in at 51.2 and 49.4 respectively, both lower than prior month’s figures of 52.4 and 50.1.
- Reuters reported that China plans to target M2 money growth of 13% this year, a signal that further easing in monetary policy is likely.
- Spot 8.6650
- USDNOK rose to 8.7211 last night, only to pare almost all of its gains soon after, as it continues to consolidate just above its 100-day moving average of 8.6507.
- A triangular wedge pattern has formed over the past few weeks, and the future direction for the currency pair could be determined by either a break above the 8.7608 resistance or a forceful major move past below the 8.6000 handle.