Daily Observations:

Asian stocks remained mixed ahead of key central bank meetings this week. Equity gains in Shanghai, Hong Kong and Seoul were offset by losses in Sydney, Tokyo and Singapore. Treasury yields traded near their highest level this year, while gold slid back to its $1,200/Oz support level.


  • President Donald Trump said it could take several years for health insurance prices to start to drop under an Obamacare replacement plan he is promoting, creating a rocky transition period that could pose a risk for members of Congress up for re-election next year and Trump’s own bid for a second term in 2020.
  • Stocks and the US dollar traded in tight ranges overnight ahead of a week packed with crucial central bank meetings such as in the US, UK and Japan, economic data releases as well as political risk in Europe.
  • The S&P 500 Index ended virtually unchanged, with gains in the materials and utilities sectors offsetting losses incurred by health care and consumer staples shares.
  • The US dollar maintained near Friday’s lows, with the Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, paring an earlier decline of as much as 0.2% to end its session relatively unchanged. The gauge was 0.1% higher in early Asian trade today.
  • US Treasuries fell; the benchmark 10yr yield rose higher for the tenth time in 11 sessions, ending the session 6bps higher at 2.63%, above the 2.60% level Bill Gross said would herald the start of a bond bear market should it hold for a week.
  • US financial firms should partition their investment banking activity, putting it into a separate “intermediate holding company” with its own board, management and capital, Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig said Monday, adding that the companies could even have a special class of stock. Such a proposition could meet Trump’s campaign promise to bring back a Depression-era law that separated investment banking from consumer lending.


  • The UK Parliament has passed the Brexit bill, paving the way for the government to trigger Article 50 as soon as today and begin talks with the EU.
  • Scotland is headed for another vote on independence, opening a new front in the Brexit battle and raising the prospect of the UK breaking up after leaving the EU. Scottish First Minister Nicola Sturgeon said on Monday she plans to start the legal process for a referendum to be held by the spring of 2019.


  • February’s NAB business conditions and business confidence gauges both fell, from 16 to 9 for the former, and from 10 to 7 for the latter.
  • RBA Assistant Governor Michele Bullock said Australia could curb mortgage lending to investors as the impact of earlier measures wanes and Sydney and Melbourne house prices keep surging.


  • February retail sales rose 9.5% year-on-year on a year-to-date basis, missing economists’ forecast of 10.6%, and slowing from a prior month’s gain of 10.4%.
  • Industrial production climbed 6.3% from a year earlier in January and February combined, versus the median estimate of 6.2% by analysts, and accelerating from last month’s 6.0% rise.
  • Fixed-asset investment increased 8.9% during the same period.

Precious Metals:

  • Spot gold declined 0.6% back to the $1,200/Oz level earlier today, erasing a previous-day gain of 0.3%. Gold seems to have found some footing around the $1,200/Oz handle, ahead of the Fed’s rate decision and Dutch election this week.
  • Interestingly, the last 2 times the Fed raised rates, gold reacted negatively in the run-up to the announcement only to rally afterwards.
  • The $1,200/Oz level coincides with bullion’s 50% retracement of its rally from the lows during December to the high attained at its 200-day moving average during end-February.

  • Silver for immediate delivery pared its previous session’s gain as well, falling 1.2% to $16.8997/Oz.


  • Crude oil futures expiring in April rebounded off the $48/bbl handle overnight to close 0.2% lower at $48.40/bbl. Futures edged lower earlier today, falling 0.3% to $48.26/bbl.
  • Data released by the Energy Information Administration tonight is forecasted to show US stockpiles increased by 3 million barrels for a tenth week of gains.
  • OPEC is due to release its month report today that will show production figures for February, while Kuwait wants to extend the 6-month OPEC-led deal to cut output beyond June.



  • Spot 1.4158
  • USDSGD rose 0.2% earlier today to 1.4158, amid implied volatility of the pair lingering at 4-month lows.
  • In a noted to clients, UOB said it expects the Singapore dollar to depreciate to 1.4800 by year-end owing to divergence in monetary policy between the US and Singapore.
  • USDSGD failed to hold above its 100-day moving average and 1.4200 handle last Friday, declining 0.6% to end the week off at 1.4126. The pair maintained losses earlier today and was mostly unchanged from Friday’s close.
  • The key support at 1.4000 remains.



  • Spot 0.7558
  • AUDUSD declined 0.4% to 0.7550 following a drop in the NAB business confidence gauge from its highest level in more than 3 years.
  • The recent correction in commodities, and more specifically iron ore, have contributed to AUDUSD’s downtrend since the start of this month which saw the pair decline by as much as 2.2%.



  • Spot 1.3440
  • USDCAD extended its recent downward correction, edging 0.1% lower to 1.3431 overnight.
  • Following a better-than-expected jobs report last Friday, the Canadian dollar found some support after weakening for 9 straight sessions.
  • Key levels to look out for include 1.3600 to the upside and 1.3400 on the support-side.



  • Spot 6.9028
  • The PBOC earlier set weakened its daily reference rate by 0.19% to 6.9118 to the dollar, from 6.8988.
  • USDCNH rose 0.2% to 6.9055, and looks poised to test its 2-month high of 6.9319 over the near-term.
  • According to a Bloomberg news report, China has got the yuan in a sweet spot; the nation’s authorities have let the currency rise enough against the dollar to put a spanner in President Trump’s assertion that China deliberately undervalues its exchange rate, but yet at the same time, it has weakened against a trade-weighted basket of currencies, giving China a competitive edge in exports.



  • Spot 114.80
  • USDJPY erased yesterday’s drop, recovering 0.4% back to the resistance at the 115 handle.
  • More sideways movement is expected ahead of key central bank meetings in the US and Japan this week.



  • Spot 1.2203
  • GBPUSD gained 0.4% yesterday following news that PM May could trigger Article 50 as soon as today. The pair added a further 0.3% last night before erasing gains back to the 1.2200 handle as the future of the UK was thrown into doubt after Scottish First Minister Sturgeon said she intends to lay the groundwork for a new vote on Scottish independence.


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