Key overnight events:
- US non-farm payrolls rose 242,000 in February, higher than the expected 195,000, while both January and December readings enjoyed positive revisions. However, wages fell by a surprise 0.1%, missing estimates of a 0.2% increase and recording their first drop in a year.
- The S&P 500 Index gained 0.3% to close at 1,999.99 on Friday, posting its third straight week of gains.
- Crude oil futures expiring in April closed 3.9% higher on Friday at $35.92/bbl, the highest since 6th Jan. Bakers Hughes data indicate that US oil rig counts have continued to fall as shale producers stepped up efforts to reduce capital expenditure and preserve cash.
- During the National People’s Congress over the weekend, China announced GDP growth targets of between 6.5% and 7.0% for 2016. 2016’s budget deficit target was raised to 3% of GDP, while CPI target was kept at 3%.
- PBOC Deputy Governor Yi Gang announced yesterday FX reserves held by the central bank include the euro, yen, pound and developing nations’ assets, in addition to US dollars, disclosing for the first time what sort of non-USD assets its reserves are comprised of.
- Spot 1.3795
- USDSGD reached an almost 5-month low of 1.3734 on Friday, dropping more than 2% in a space of 2 days.
- The low made in last October of 1.3728 remains a key support level. A break below it and the next floor could potentially be around 1.3459.
- Spot 0.7415
- AUDUSD broke its key resistance level of 0.7385 on Friday, reaching a 7-month high of 0.7443.
- Some of its gains were pared earlier today after China’s expanded deficit target over the weekend disappointed some investors who were expecting a more aggressive stimulus signal from Australia’s largest trading partner.
- Investors will watch for comments from RBA’s Deputy Governor Lowe tomorrow for signs the currency strength is beginning to trouble policy makers.
- Spot 1.3345
- USDCAD declined to newer lows on Friday, sinking to a low of 1.3313, spurred on by weakness in the US dollar and crude oil’s continued rally.
- It is currently sitting just above the 200-day moving average of 1.3300.
- Spot 6.5064
- The PBOC raised its reference rate to its strongest level since January as data today is expected to show its FX reserves slipped to US$3.19 trillion in February, the lowest level since Dec 2011.
- USDCNH briefly traded below 6.5000 this morning to a low of 6.4974. Its 100-day moving average of 6.5114 was broken on Friday; the next support below lies at 6.4866.
- PBOC Deputy Governor Yi Gang told reporters in Beijing that he doesn’t see possibility of zero or negative interest rates at the moment.
- Spot 8.4953
- USDNOK, fuelled by oil’s rally, dropped to as low as 8.4739 near the end of Friday’s session.
- Moody’s reaffirmed Norway’s AAA rating and kept its stable outlook, adding that the krone will continue to be an effective shock absorber both for Norway’s budget and its non-oil sector.
- An important support level resides at the 8.4000 handle – previous resistance-turned-support, as well as the 200-day moving average.