Key overnight events:
- Oil prices traded near its highest closing levels in 8 weeks in New York as a jump in US crude inventories was countered by a decline in oil production. Crude oil futures expiring in April climbed to a high of $35.32/bbl before settling 0.3% lower at $34.57/bbl. The EIA reported that US output fell for a sixth week to 9 million barrels a day, the lowest since Nov 2014.
- The number of Americans applying for jobless benefits climbed unexpectedly by 6,000 to 278,000; the expected number was 270,000.
- Elsewhere, factory orders for January rose by 1.6%, up from the prior decline of 2.9%, but slower than the expected 2.1% increase. ISM non-manufacturing came in at 53.4, better than the 53.1 expected.
- The S&P 500 Index closed 0.4% higher, buoyed by energy and raw-material stocks, as investors await tonight’s non-farm payroll numbers.
- In a note to clients, JPMorgan Chase & Co. lowered its recommendation on global equities to underweight, citing recession risk and “near-empty ammo box of policy makers”, and adding that should a recession hit this year, the S&P 500 could fall to around 1,400.
- Gold rose as much as 2% earlier today, officially entering a bull market.
- North Korean leader Kim Jon Un called for readiness to launch nuclear warheads, Korean Central News Agency reported this morning.
- Spot 1.3861
- The Singapore dollar looks set for its biggest weekly gain in almost 5 months, as USDSGD tested its 2016-low of 1.3860 earlier today.
- Though currently well-supported, a break below the current support level, and the next floor of 1.3728 could be tested.
- Spot 0.7364
- Retail sales in January rose 0.3%, up from 0.0% the prior month, but missing the estimated rise of 0.4%.
- AUDUSD climbed to a high of 0.7374 this morning, heading for its best week since October last year. 0.7385 remains a key resistance level.
- Spot 1.3420
- The Canadian dollar continued its recent strength, as USDCAD traded below the 1.3400 handle to reach a low of 1.3372.
- Support below comes in the form the 200-day moving average at 1.3296.
- Spot 6.5062
- Onshore yuan rises for the fourth day after the PBOC raises its currency fixing by the most in almost 3 weeks.
- PBOC Governor Yi said that the currency is not “strictly” pegged to the basket of currencies used as a reference.
- USDCNH slumped to a low of 6.5037 earlier, the lowest in more than 2 weeks.
- Chinese leaders will gather on Saturday for the annual National People’s Congress; they are expected to temper depreciation expectations for the yuan and set 2016 growth and fiscal deficit targets.
- Spot 8.5842
- USDNOK fell by as much as 1.1% to a low of 8.5662 early today, taking out the 100-day moving average which has been acting as a support over the past week.