Key overnight events:

  • The S&P 500 Index edged 0.4% higher on Friday, capping a fifth straight weekly gain of 1.4% and turning positive for 2016.
  • Crude oil futures expiring in April slipped 1.9% on Friday and a further 1.5% this morning back below $39/bbl. Rigs targeting oil in US fields rose by 1 to 387 last week, Bakers Hughes Inc said on its website on Friday, marking its first increase this year.
  • The greenback stabilized, with the Bloomberg Dollar Index rising 0.3% after 2 consecutive days of 1% losses.
  • The Fed’s St Louis President James Bullard remarked that he wants US rates to return toward more normal levels, adding that current policy remains “extreme”.
  • The ECB’s Executive Board member and Chief Economist Peter Praet said the ECB can still cut rates if needed as they “have not reached the physical lower bound”, contradicting Draghi’s comments from 2 weeks ago that the ECB was unlikely to cut rates further.
  • The PBOC’s Governor Zhou Xiaochuan commented that financial leverage is too high, adding that he is targeting a yuan that’s not “completely free floating” and that interest-rate liberalization was largely completed last year.



  • Spot 1.3603
  • USDSGD hit an 8 month low of 1.3480 last Friday, but has since pared back some of its losses this morning as it currently trades around the 1.3600 handle.
  • According to HSBC economists, government expenditure may increase to 17.3% of GDP in the year starting 1st April, up from 17.0% in 2015 as government spending continues to become a bigger driver of growth in recent years. The nation will unveil its 2016 budget on 24th March.



  • Spot 0.7585
  • After climbing to a high of 0.7680 last Friday, AUDUSD gave back gains this morning as Prime Minister Turnbull brought forward Australia’s budget to 3rd May and threatened to call a double dissolution election unless the Senate passes key industrial relations legislation.
  • RBA Governor Stevens is due to speak tomorrow and is expected to weigh in on recent AUD strength.



  • Spot 1.3056
  • Retail sales for January beat expectations, rising 2.1% month-on-month and 1.2% month-on-month if automobiles were excluded; expected numbers were 0.6% and 0.4% respectively.
  • Core inflation for February came in at 0.5% month-on-month and 1.9% year-on-year, estimated figures were 0.5% and 2.0% respectively.
  • USDCAD continued to fluctuate about the 1.3000 mark, after Friday’s retail sales rose at the fastest pace since 2010. Canada’s budget is due to be unveiled tomorrow night, and a positive response could result in a breach of the key support at 1.2832.



  • Spot 6.4799
  • China weakened its yuan fixing by the most since 7th Jan, as USDCNH climbed to a high this morning of 6.4803; the currency pair reached 6.4443 on Friday, its lowest this year.
  • In an interview with Caixin, former Fed Chairman Bernanke recommended setting up a less predictable yuan path in order to better manage the currency.



  • Spot 8.3804
  • After cutting its deposit rates by an expected 25bps on Thursday, Norges Bank Governor Olsen stated in an interview that zero is not a lower bound for Norway. He added that should the Norwegian economy be exposed to further significant shocks, policy makers could exploit that opportunity.
  • After breaking below a key support level last week, USDNOK remains below the important 8.4000 handle. Continued buoyant oil prices and USD weakness could drive the currency pair further towards the 8.0000 region.


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UEN: 201419754M

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