Daily Observations:

Most Asian stocks gained for a second straight day as a rise in consumer confidence in the US to a 16 year high rekindled optimism in the strength of its economy. The US dollar resumed its rebound off 4-month lows, while gold retreated further below a key resistance level.


  • Wholesale inventories in February rose 0.4% month-on-month, reversing from a prior month drop, and exceeding the median estimate of 0.2%.
  • Consumer confidence this month jumped to 1125.6, the highest level in more than 16 years, from 116.1 in February, and easily surpassing the 114.0 expected by analysts.
  • President Donald Trump will be briefed Thursday by a group of administration officials, including head of National Economic Council Gary Cohn, on various ways to implement comprehensive tax code changes, one of which includes the border-adjusted tax.
  • Fed Vice Chairman Stanley Fischer said the committee’s median estimate for 2 more rate hikes this year “seems about right”, adding that that is his forecast as well, and that risks continue to be “more or less balanced”. He said the failure of last week’s health-care bill may have changed his “internal calculus”, but not the overall outlook.
  • Fed Governor Jerome Powell said he sees the central bank continuing to raise rates gradually if the economy stays on its current course, adding that maximum employment is close while inflation is still a little short, but not terribly.
  • US stocks rose for just the second time in 9 sessions, with the S&P 500 Index advancing 0.7%; all major sectors gained for the day with financials and energy shares leading the way.
  • The USD dollar rallied, with both the Dollar Index and the Bloomberg Dollar Spot Index finding strong support above the 200-day moving averages. The latter snapped a 9-day losing streak to end 0.5% higher in New York.
  • Yields strengthened overnight, with the benchmark 10yr Treasury yield gaining 4bps to 2.42%.


  • Scottish lawmakers voted 60 to 59 on Tuesday to allow First Minister Nicola Sturgeon to request the legal means from the UK authorities to hold the plebiscite by spring 2019 in order to pursue a second independence referendum.


  • Retail trade in February rose 0.1% from a year earlier, missing out on the 0.7% gain predicted.
  • Retail sales last month advanced 0.2% month-on-month, faring slightly worse than the consensus estimate of 0.3%.


  • Sales manager sentiment and confidence of small- and medium-sized enterprises jumped to the highest in almost 2 years, according to earliest private indicators for March. International markets experts see a significantly stronger outlook and a gauge of manufacturing activity based on satellite imagery remains robust.

South Africa:

  • President Jacob Zuma ordered Finance Minister Pravin Gordhan to cancel a roadshow and to return home from London on Monday, sparking rumours that the well-respected Gordhan is on the brink of being fired.
  • If Zuma fires Gordhan, as he told Communist Party officials that he planned to do according to 3 people with knowledge of the matter, he risks a market meltdown and a revolt by opponents in the ruling African National Congress. If he doesn’t, he’d appear weak as he seeks to secure his choice as successor as party leader in December.

Precious Metals:

  • Spot gold retreated after failing to break above its 200-day moving average for the second time in a month, declining 0.6% to $1,247.38/Oz earlier.
  • The last time spot gold rebounded off its 200-day moving average, the precious metal retreated more than 4% back towards the $1,200/Oz support. A strong break higher though could pave the way for a move to the $1,300/Oz resistance.
  • Silver for immediate delivery traded above its 200-day moving average last night, but reversed gains to fall 0.1% to $18.0413/Oz earlier today.


  • Crude oil futures expiring in May added 1.3% in New York and another 0.5% to $48.59/bbl earlier today after Libya reduced output to 560,000 barrels a day following a halt in output from the nation’s biggest oil field.



  • Spot 1.3975
  • USDSGD rebounded off its 200-day moving average for the third day in a row, and was 0.3% higher at 1.3988 earlier today.
  • The general view that the central bank will refrain from easing monetary policy next month has provided renewed demand for the Singapore dollar, and driven the USDSGD pair below the key 1.4000 level over the past week.



  • Spot 0.7644
  • AUDUSD bounced off the 0.7600 handle, gaining 0.7% to 0.7657 this morning, supported by a risk-on recovery today and higher metal prices, in particular, iron ore.



  • Spot 1.3393
  • USDCAD pared overnight declines of up to 0.4%, as a recovery in oil helped prop up the Canadian dollar, bringing the pair back towards 1.3400.
  • The currency pair continues to be bound by its 1.3300 and 1.3400 handles. A break higher and a consolidation on top could open the doors to more gains for the pair.



  • Spot 6.8746
  • The PBOC weakened its daily reference rate earlier today by 0.19% to 6.8915 to the dollar, from 6.8782 yesterday.
  • Offshore yuan weakened for the second straight day, falling 0.1% against the greenback to 6.8782 today.



  • Spot 111.24
  • USDJPY bounced off the 110 handle, gaining 0.7% to 111.32 this morning amid a short-term squeeze.
  • The support-turned-resistance level at 111.60 may be a fresh entry point yen bulls.
  • The risk for USDJPY continues to remain to the downside, after the pair closed below the key 111.60 support last week. The currency pair had spent most of the past months within the 111.60 – 115.60 range, and following a breakout of its lower boundary, could fall further to its 200-day moving average of around 108 over the medium term.



  • Spot 1.2413
  • GBPUSD slumped 1.4% to 1.2377 as investors braced for the start of a 2-year negotiation for the UK to leave the EU. UK PM Theresa May has signed the letter which is due to be delivered to the EU’s Donald Tusk later today.
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UEN: 201419754M

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