Daily Observations:

The US dollar is poised for its longest losing streak since US President Trump won the election, with gauges of the greenback falling to 1-month lows. Asian equities turned lower, although volatility across most asset classes continue to remain low. Gold’s recovery continued, with the precious metal rising to a 2-week high.

G-20:

  • Finance chiefs of the Group of 20 remained at odds as they met in Germany, with China leading a defence of the existing rules-based system and the US calling for a recognition that trade must be fair.
  • Negotiations were bogged down on Saturday with the US rejecting the latest German compromise on wording over trade, while an earlier German suggestion that accommodated some US concerns was rejected by delegations including France, the UK, Italy, Brazil and the EU.
  • The communique following the summit removed previous pledges to avoid protectionism, as well as an entire section on action against climate change.

US:

  • President Donald Trump has criticised Germany via Twitter, saying Germany owed the US “vast sums” of money for its defense and that it was time for Germany to pay its fair share towards NATO.
  • Industrial production stalled in February, registering no growth from a month earlier, after slipping 0.1% in January; analysts had predicted a 0.2% rise.
  • A sentiment gauge carried out by the University of Michigan gained to 97.6, from 96.3 prior, beating the median estimate of 97.0.
  • The US dollar continued to sell off earlier today, with the Bloomberg Dollar Spot Index sliding 0.1% earlier today, and looks poised to fall for the fourth consecutive session.
  • US yields continue to fall following the Fed’s dovish interest-rate forecast last Wednesday, as the benchmark 10yr Treasury yield fell 4bps back to the 2.50% handle last Friday.
  • The S&P 500 Index slipped 0.1% Friday, as losses suffered by financials stocks negated gains in utilities and telecommunications shares.
  • Minneapolis Fed President Neel Kashkari said little-changed economic data and his belief that job market slack remains pushed him to cast the lone dissent during last week’s FOMC meeting.

Canada:

  • Manufacturing sales in January unexpectedly advanced 0.6% month-on-month; despite slowing from a 2.1% gain in the month prior, January’s gain beat the median estimate of a 0.3% drop.

China:

  • After delivering a sharp warning about North Korea’s nuclear program during earlier stops in Tokyo and Seoul, US Secretary of State Rex Tillerson’s tone was more measured in meetings with Chinese officials including President Xi Jinping. At an event with Foreign Minister Wang Yi, Tillerson twice echoed Chinese phrasing directly, promising a relationship of “non-conflict, non-confrontation, mutual respect and win-win cooperation”.

Singapore:

  • Non-oil domestic exports in February rose 21.5% year-on-year, registering a fourth straight monthly increase, accelerating from an 8.6% rise prior and better than the 12.5% median estimate. On a month-on-month basis, non-oil domestic exports rose a seasonally-adjusted 1.4%, surpassing the 0.1% drop predicted.

Precious Metals:

  • Spot gold climbed to a fresh 2-week high earlier today, rising 0.4% to $1,234.70, following broad weakening in the US dollar and Treasury yields.
  • The resistance at $1,240/Oz should come into play, with bullion poised for some consolidation below said level.
  • Silver for immediate delivery gained this morning as well, advancing 0.3% to $17.4586/Oz.

Oil

  • Crude oil futures expiring in April fell 1.1% to $48.26/bbl earlier this morning, after gaining 0.6% last week.
  • Producers added more oil rigs to US fields last week, extending a drilling surge into a tenth month, Baker Hughes Inc. said.
  • Saudi Arabia is ready to extend cuts if supplies stay above the five-year average, Energy Minister Al-Fali said in an interview with Bloomberg.

USDSGD:

  • Spot 1.3983
  • USDSGD declined below the 1.4000 psychological level, falling 0.3% to 1.3981 and nearing a 1 Mar. low of 1.3975.
  • The next support below is at 1.3900 – the pair’s 200-day moving average.
  • According the Bloomberg news, economists surveyed are forecasting MAS to keep their policy stance unchanged during its April review, which could prop up the Singapore dollar.

AUDUSD:

  • Spot 0.7719
  • AUDUSD gained 0.3% to 0.7725 earlier today, after closing at 0.7704 last Friday, the first time the pair closed above 0.7700 since 10 Nov. last year.
  • The pair has regained some bullish momentum following a correction earlier this month. Further weakness from the US dollar could result in the pair testing 2016 highs around the 0.7800 handle.

USDCAD:

  • Spot 1.3323
  • USDCAD pared some of Friday’s 0.3% gain, falling 0.2% to 1.3321 earlier in its session today.
  • 1.3300 is the support level likely to be tested again soon, after the currency had rebounded off it last week. A further decline back to 1.3200 may materialise if US dollar or crude oil weaknesses continue.

USDCNH:

  • Spot 6.8987
  • The PBOC earlier weakened its daily reference rate by to 6.8998 to the dollar, from 6.8873 last Friday.
  • USDCNH was mostly unchanged, paring earlier gains of 0.1%.

USDJPY:

  • Spot 112.54
  • USDJPY slid to a fresh 2-week low, declining 0.2% earlier to 112.48.
  • With the currency pair closing below its 100-day moving average for the first time since Oct. 10 last year, a retest of February’s low at 111.60 is looking increasingly likely.

GBPUSD:

  • Spot 1.2386
  • Following Friday’s 1.2% rally which saw GBPUSD briefly trading above 1.2400, the currency pair pared some of those gains earlier today, falling 0.2% to 1.2372 earlier.
  • According to analysts at Rabobank, since the MPC has specified that “attempting to offset fully the effect of weaker sterling on inflation would be achievable only at the cost of higher unemployment and even weaker income growth”, markets are priced for a steady BoE policy well into next year, underscoring Governor Carney’s rather dovish tone in recent months.

 

© Jachin Capital Pte Ltd

UEN: 201419754M


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