EURUSD
- Steady Gains Near 1.0850: EUR/USD is maintaining gains near the 1.0850 level in European trading on Monday. The pair's upward movement is supported by a weaker US Dollar (USD), contributing to the ongoing dynamics in the currency market.
- Focus on ECB Monetary Policy Meeting: Investors are closely monitoring the European Central Bank (ECB) monetary policy meeting scheduled for Thursday. The market consensus anticipates no change in interest rates. The outcome of the meeting and any accompanying statements can significantly influence the Euro's value.
- ECB's Stance on Wage Pressures: The ECB, in its approach to monetary policy, expresses a need for additional data on easing wage pressures before considering changes to its monetary policy stance. This cautious approach is in line with the central bank's data-driven decision-making process.
- Fed Officials' Remarks: Comments from Federal Reserve officials are contributing to the currency market sentiment. Boston Fed President Susan Collins and New York's John Williams have stated that the first rate cut will likely be appropriate later this year. Atlanta's Raphael Bostic expressed expectations for an easing policy this summer.
- US Manufacturing PMI Data: The Institute for Supply Management (ISM) reported a decline in the US Manufacturing Purchasing Managers' Index (PMI) from 49.1 to 47.8 in February. A reading below 50 indicates contraction, and this data point might have implications for the broader economic outlook.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD is holding onto gains, supported by a weaker US Dollar. The upcoming ECB monetary policy meeting is a focal point for investors, with expectations of no change in rates. The ECB's cautious stance on wage pressures aligns with a data-driven approach. Remarks from Federal Reserve officials and disappointing US Manufacturing PMI data contribute to the overall market sentiment influencing the EUR/USD pair.
GBPUSD
- Defending Gains Above 1.2650: GBP/USD is maintaining gains above the 1.2650 level in European trading on Monday. The currency pair is showing resilience in the face of recent market dynamics.
- Support from BoE Chief Economist's Remarks: The British Pound (GBP) is drawing support from remarks made by Bank of England (BoE) Chief Economist Huw Pill on Friday. His hawkish comments, stating that the first cut in the key interest rate is still some way off, have influenced market sentiment regarding the Pound.
- USD Remains Depressed: The US Dollar (USD) is experiencing a depressed state following Friday's disappointing US macro data and less hawkish remarks by Federal Reserve (Fed) officials. The overall sentiment surrounding the USD is impacting the GBP/USD pair.
- Caution Ahead of Key US Economic Releases: Traders are exercising caution and refraining from aggressive directional bets ahead of this week's significant US economic releases. Key events include the closely watched Nonfarm Payrolls (NFP) report on Friday and Fed Chair Jerome Powell's semi-annual congressional testimony scheduled for Wednesday and Thursday.
- Lack of Relevant Market-Moving Data: On Monday, there is no relevant market-moving data scheduled for release from either the UK or the US. This absence of significant data leaves GBP/USD prices subject to the broader dynamics of USD price movements.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD is defending its gains above 1.2650, finding support in the hawkish remarks from BoE Chief Economist Huw Pill. The USD's subdued state, influenced by recent data and Fed comments, contributes to the pair's current dynamics. Traders are cautious ahead of key US economic releases later in the week, and the lack of impactful data on Monday leaves the pair sensitive to USD price movements.
GOLD
- Consolidating Last Week's Gains: Gold price is observed oscillating in a narrow range during the Asian session on Monday, consolidating the robust gains made last week. The precious metal is currently trading in the $2,088-2,089 region, marking its highest level since December 28.
- USD Undermined by Disappointing ISM Survey: The US Dollar continues to be undermined by the disappointing release of the US Institute for Supply Management (ISM) survey on Friday. The lackluster performance of the USD is contributing to the strength of gold prices.
- Focus on Fed Chairman Powell's Testimony: During this week, all eyes are on the two-day testimony of US Federal Reserve (Fed) Chairman Jerome Powell on the semi-annual Monetary Policy Report (MPR) before Congress. Powell's remarks are closely watched for insights into the Fed's policy stance, which can significantly impact gold prices.
- Anticipation for US Labor Market Report: Traders are eagerly anticipating the US labor market report, especially after the previous week's disappointing economic data. The disappointing data reinforced expectations for a potential shift in Fed policy, influencing market sentiments and gold prices.
- Changing Probability for Fed Rate Cuts: Market sentiment is evolving concerning the Federal Reserve's potential actions. The CME FedWatch Tool indicates that there is currently about a 30% chance that the Fed could begin easing rates in May. The probability of a rate cut in June stands at about 71%, reflecting increased expectations compared to the previous week.
Closing statement: Gold price is consolidating recent gains in the Asian session, supported by the weakened US Dollar following the disappointing ISM survey. The focus for the week is on Fed Chairman Powell's testimony, which is expected to provide insights into the central bank's policy direction. The upcoming US labour market report is also a key factor influencing market sentiment and gold prices, with changing expectations for Fed rate cuts contributing to the evolving landscape.
CRUDE OIL
- WTI Oil Price Around $80.00: West Texas Intermediate (WTI) oil price has edged higher, reaching around $80.00 per barrel on Monday, reflecting ongoing strength in the commodity market.
- OPEC+ Decision to Extend Output Cuts: The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have decided to extend voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter. This decision aligns with market expectations and is aimed at supporting oil prices amidst global economic concerns and increased output outside the OPEC+ group.
- Russia's Additional Oil Output Cut: Russia has announced a significant move to cut its oil output and exports by an additional 471,000 bpd in the second quarter. This decision contributes to the efforts to balance oil markets and has implications for global supply dynamics.
- Geopolitical Tensions in the Middle East: Broader geopolitical tensions and conflicts in the Middle East are providing support to Crude oil prices. The recent sinking of the UK-owned vessel Rubymar by Yemeni Houthi militants in the Gulf of Aden, as confirmed by the US military, marks a concerning escalation in tensions in the region.
- Fuel Demand Boost Expected from Fed Rate Cuts: Easing inflation in the US is anticipated to allow the Federal Reserve (Fed) to start cutting interest rates in June. This potential policy shift is expected to boost fuel demand in the world's largest oil consumer, adding a positive factor to oil market dynamics.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI oil prices are hovering around $80.00 per barrel, supported by OPEC+'s decision to extend output cuts, Russia's additional oil output cut, and geopolitical tensions in the Middle East. The expectation of Fed rate cuts in June, driven by easing inflation, adds to the positive outlook for fuel demand. The oil market continues to be influenced by a combination of supply dynamics, geopolitical events, and expectations regarding central bank policies.
DAX
- Chinese PMIs Setting the Tone: Private sector PMIs from China, particularly the Caixin Manufacturing PMI, set a positive tone for the market on Friday. The Caixin Manufacturing PMI rose from 50.8 to 50.9 in February, contributing to a positive Asian market session.
- German and Eurozone Manufacturing PMIs Decline: The German Manufacturing PMI declined from 45.5 to 42.5 in February, although it was slightly up from the preliminary estimate of 42.3. Similarly, the Eurozone Manufacturing PMI slipped from 46.6 to 46.5, showing a marginal improvement from the preliminary estimate of 46.1.
- Core Inflation Rate Eases in Eurozone: A significant development was the easing of the core inflation rate for the Eurozone from 3.3% to 3.1% in February. The annual rate also fell from 2.8% to 2.6%. These hotter-than-expected inflation figures eased expectations for an April ECB rate hike, putting pressure on the DAX.
- Eurozone Sentix Investor Confidence Index: On Monday, investor interest will be drawn to the Eurozone Sentix Investor Confidence Index. Economists forecast an increase in the index from -12.9 to -10.8 in March, which could influence market sentiment.
- ECB Interest Rate Decision Looms: Investors will closely track ECB chatter throughout the session, especially with the impending ECB interest rate decision. Recent inflation figures have shifted expectations for an ECB rate cut to June, and any further comments from ECB officials could impact market perceptions.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX faced influences from Chinese PMIs, declining German and Eurozone Manufacturing PMIs, and the easing of the core inflation rate in the Eurozone. The anticipation of the Eurozone Sentix Investor Confidence Index and the looming ECB interest rate decision adds to the complexity of market dynamics. Investors are closely monitoring economic indicators and central bank communications for insights into the future direction of the DAX.