• Trump ups trade pressure on Canada, Mexico; senior Republicans urge rethink.
• U.S. Feb Markit Comp Final PMI, 55.8, 55.9 previous.
• U.S. Feb Markit Svcs PMI Final, 55.9, 55.9 previous.
• U.S. Feb ISM N-Mfg PMI, 59.5, 59.0 forecast, 59.9 previous.
• U.S. Feb ISM N-Mfg Bus Act, 62.8, 60.0 forecast, 59.8 previous.
• U.S. Feb ISM N-Mfg Employment Index, 55.0, 61. previous.
• U.S. Feb ISM N-Mfg New Orders Index, 64.8, 62.7 previous.
• U.S. Feb ISM N-Mfg Price Paid Index, 61.0, 61.9 previous.
• U.S. considering "material changes" to "Volcker Rule"- Fed's Quarles.
• Trump trade threats alarm German carmakers, hit investor morale.
• Italy's League, 5-Star vie for power after inconclusive vote.
• UK services sector perks up in Feb, keeping BoE on track for May hike.
• South Koreans meet North Korean leader Kim for talks about talks.
• BOJ deputy governor nominee warns against premature exit from easy policy.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia Q4 Current Account Balance AUD, -12.60 bln forecast, -9.10 bln previous
• 00:30 Australia Q4 Net Exports Contribution, -0.60% forecast, 0.00% previous
• 00:30 Australia Jan Retail Sales MM, 0.4% forecast, -0.5% previous
• 03:30 Australia Mar RBA Cash Rate, 1.50% forecast, 1.50% previous
Looking Ahead - Events, Other Releases (GMT)
• 00:00 Fed's Lael Brainard speaks on "Economic and Monetary Policy Outlook" before the Money Marketers of New York University Forum - New York
• 01:30 Fed's Robert Kaplan participates in moderated question-and-answer session
before CERA Week event - Houston, Texas
• 08:00 The Riksdag Committee on Finance will hold an open hearing on monetary policy withGovernor Stefan Ingves and Deputy Governor Henry Ohlsson – Stockholm
• 12:30 Fed's William Dudley participates in USVI Nonprofit Leaders Breakfast Roundtable to discuss economic conditions and recovery efforts in the aftermath of hurricanes Irma and Maria - St. Thomas, Virgin Islands
• 18:00 BoE's Andy Haldane speaks at the launch of a report on how most people feel excluded fromkey economic policy decision-making - London
EUR/USD is likely to find support at 1.2266 levels and currently trading at 1.2332 levels. The pair has made session high at 1.2348 and hit lows at 1.2278 levels. The euro edged higher on Monday after a short-lived sell-off tied to Italy's inconclusive weekend election, helped by the creation of a coalition government in Germany that eased political uncertainty there. Italy's election, which pointed to prolonged political jitters after right-wing and eurosceptic parties did better than expected, was somewhat balanced by Germany's Social Democrats agreeing to join with Chancellor Angela Merkel's conservatives, ending a period of uncertainty in Europe's biggest economy. Taken together, the election outcomes did not to alter investors' view on the strength of the euro zone economy, although the Italian results put political risks in the region back on the radar. Traders will turn their focus to four major central bank meetings this week as well as the U.S. payrolls report due Friday. The Reserve Bank of Australia will meet on Tuesday, while the Bank of Canada will hold a policy meeting on Wednesday. European Central Bank policymakers will convene on Thursday, while their counterparts at the Bank of Japan will meet on Friday. The euro was last up 0.11 percent to $1.2329, erasing losses tied to the Italian election results.
GBP/USD is supported in the range of 1.3754 levels and currently trading at 13840 levels. It reached session high at 1.3877 and dropped to session low at 1.3874 levels. Sterling firmed against the dollar on Monday after Bloomberg reported that British Prime Minister Theresa May had said she was close to securing a transition deal with the European Union. Sterling climbed to as high as $1.3877 after the report was published, its highest since Feb. 28 and up half a percent on the day. The European Union is due to publish guidelines this week, following on from a speech on Friday in which May urged the bloc to be flexible in negotiating their future relationship. Her comments had disappointed markets hoping for a sign that a transition deal would be clinched in the coming weeks. Analysts say Brexit risk remains the dominant factor for the currency. That drove it to its weakest level against the euro since November on Friday. Still, speculators added to their net long positions on the pound last week, data showed on Friday, signalling they are still betting it will rise. The Bank of England has signalled that it could soon start raising interest rates because of relatively strong economic performance to which a survey covering Britain's dominant services sector will give more clues and inflationary pressures. But it has made it clear that rate hikes are dependent on progress in Brexit talks.
USD/CAD is likely to find support at 1.2884 levels and is trading at 1.2991 levels. It has made intraday high at 1.2998 and lows at 1.2956 levels. The Canadian dollar weakened against its U.S. counterpart on Monday after U.S. President Donald Trump used proposed tariffs on steel and aluminum as a bargaining chip in talks to revamp NAFTA.Trump is expected to finalize the tariffs later in the week. He appeared to tie possible exemptions for Canada and Mexico to a "new" North American Free Trade Agreement as well as other steps. Canada is the largest supplier of both steel and aluminum to the United States. Its commodity-linked economy could be hurt if NAFTA were to collapse or if more protectionist trade policies were to lead to a slowdown in global trade. The Canadian dollar was trading 0.8 percent lower at C$1.2997 to the greenback. The currency touched its weakest since July 7 at C$1.2996.Losses for the loonie came after data on Friday showed that Canada's economy grew by an annualized 1.7 percent in the final quarter of 2017, short of the Bank of Canada's forecast of 2.5 percent. The central bank is expected to leave its benchmark interest rate on hold at 1.25 percent at a policy announcement on Wednesday. Domestic trade data for January is also due on Wednesday and the February employment report is due on Friday.
AUD/USD is supported around 0.7710 levels and currently trading at 0.7765 levels. It hit session high at 0.7768 and made session lows at 0.7723 levels. The Australian dollar stayed on the defensive on Monday as rumblings about a world trade war curbed risk appetites and overshadowed the upbeat part of domestic economic data. The Aussie dollar was off 0.18 percent at $0.7759 and uncomfortably near to recent two-month lows at $0.7713. Australia is commodity exporting economy that benefit substantially from free trade, making it vulnerable should U.S. President Donald Trump's threat of tariffs lead to a round of tit-for-tat reprisals. Lost in the noise was Australian data showing strength in vehicle sales, job ads and approvals to build new homes that augured well for continued economic growth this year. Figures due Wednesday are forecast to show Australia's A$1.8 trillion gross domestic product (GDP) expanded by around 0.6 percent in the December quarter. That would see annual growth slow to 2.5 percent, from 2.8 percent, but it would still mark more than 26 years without a technical recession. The Reserve Bank of Australia (RBA) holds its March meeting on Tuesday and is thought certain to keep rates at 1.5 percent and signal it is no rush to hike anytime soon.
European shares recovered on Monday from six-month lows hit last week on fears new U.S. tariffs would trigger trade wars, but were held back by heavy losses in Italy after anti-establishment parties surged in an inconclusive election.|
UK's benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 1.10 percent, Germany's Dax ended up by 1.6 percent, France’s CAC finished the day up by 0.8 percent.
U.S. stocks rallied on Monday as fears of a global trade war ebbed with investors betting that U.S. President Donald Trump would back down on his threat to impose hefty tariffs on steel and aluminum imports.
Dow Jones closed up by 1.39 percent, S&P 500 ended down by 1.11 percent, Nasdaq finished the day up by 1.01 percent.
Treasury yields fell on Monday as prices were bolstered by investors seeking safe-haven bets amid U.S. President Donald Trump's trade war rhetoric.
The 10-year yield was at 2.842 percent, down 1.5 basis points from Friday's close. U.S. 2-year Treasury yields were last at 2.222 percent. The long end was also under pressure with 30-year yields last at 3.119 percent.
Gold prices dropped on Monday as a stronger dollar outweighed the impact of uncertainty created by Italy's election result and fears of a possible global trade war.
Spot gold lost 0.2 percent to $1,319.82 per ounce by 1:38 p.m. EST (1838 GMT), after touching its highest since Feb. 27 at $1,327.86.U.S. gold futures for April delivery settled down $3.50, or 0.3 percent, at $1,319.90 per ounce.
Crude prices rose on Monday along with the U.S. stock market on forecasts for robust oil demand growth and concerns OPEC will not be able to increase its production capacity.
Brent futures were up $1.33, or 2.1 percent, at $65.70 a barrel by 11:55 a.m. EST (1655 GMT), while U.S. West Texas Intermediate crude futures were up $1.40, or 2.3 percent, at $62.65.