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05/03/2024 - 09:17 UTCThe dollar ended the session with minor loses against most major currencies on Monday, with the dollar index (USDX) ending the day 0.05% lower as the market remains focused on potential variations in line with the flow of incoming data, including the key Nonfarm Payrolls figures from February set for release later in the week. U.S payrolls data are due on Friday, with forecasts pointing to a still-solid rise of 200,000 jobs after January's barnstorming 353,000 jump.
Bets on a June rate cut was marginally lower according to the CME Fedwatch tool, with about 49.5% expecting a cut, down from 57% a day earlier.
In other news, market participants also eyed Bitcoin which rose to a more than two-year peak above $65,000 after a quiet weekend, pushed higher in recent weeks by big flows into cryptocurrency exchange-traded funds, most notably in the United States.
The U.S. main indexes closed lower following choppy trading on Monday, as investors geared up for key economic data and testimony from Federal Reserve Chair Jerome Powell later in the week. The US 500 briefly touched intraday record highs thanks in part to a jump in chip stocks fuelled by hype around the products that underpin artificial intelligence, although this momentum faded heading into the end of the session.
In company news, big-box retailer Target WILL report its latest quarterly results on Tuesday that could give markets an updated glimpse into the state of U.S. consumers.
In the energy front, Oil prices settled lower on Monday, as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the OPEC+ producer group. Both benchmarks posted a sharp decline with WTI ending the session 1.56% lower and Brent ending the day with loses of 0.88%.
Markets were awaiting fresh cues on monetary policy from Federal Reserve Chair Jerome Powell, who is set to offer a two-day testimony before Congress on Wednesday and Thursday. After Powell’s testimony, focus this week is also on key nonfarm payrolls data for February.
The EUR/USD pair started the week with gains ending the session above the mark of 1.0850 while market participants are awaiting to look to critical US labour figures this week as markets gauge the Federal Reserve’s next move.
The Eurozone Sentix Investor Confidence Index rose from -12.9 in February to -10.5 in March, the latest survey showed on Monday, reaching its highest level since April 2023.
This week, central banks loom heavily over the Euro (EUR) and the US Dollar (USD). Fed Chairman Jerome Powell will be testifying before the US Congress’ House Financial Services Committee about the Fed’s Semi-Annual Monetary Policy Report on Wednesday and Thursday. The European Central Bank (ECB) also gives its latest rate call during Thursday’s European market session.
Gold prices hit a three-month peak on Monday, driven by the uncertainty over the global economy and some bets on early interest rate cuts drove a sharp melt-up in bullion. Gold prices rose 1.49% and ended the session above the level of $2114,00 per ounce.
Demand for the yellow metal was boosted by some indicators that the U.S. economy was cooling, while signs of a recession in Europe and Japan, coupled with underwhelming growth forecasts from China, also factored into safe-haven demand.
Further gains in gold were held back by anticipation of more cues on U.S. interest rates, particularly from Fed Chair Jerome Powell this week.
Crude prices posted a decline on Monday, as widely expected decision from OPEC+ to extend its current pace of production cuts until the second quarter offered little support amid ongoing concerns tepid demand.
Russia and Saudi Arabia, who lead the Organization of the Petroleum Exporting Countries and its allies, or OPEC+, committed to maintaining their current run of 2.2 million barrels per day supply cuts until the end of June.
But expectations of tighter supplies have been countered by a jump in non-OPEC production, led by the U.S. and ongoing worries about the waning demand as top oil importer China struggles with an economic recovery.
Attacks on vessels in the Red Sea by the Yemeni Houthis, in solidarity with Palestine, had furthered this notion, with the Houthis sinking a vessel for the first time ever last week.
U.S. stocks were lower after the close on Monday, as losses in the Consumer Goods, Oil & Gas and Consumer Services sectors led shares lower.
At the close in NYSE, the US 30 declined 0.35%, while the US 500 declined 0.22%, and the US Tech 100 declined 0.06%.
Apple received a 1.84-billion-euro antitrust fine received from the European Commission for allegedly stifling competition from rival music streaming services including Spotify by imposing restrictions on its App store.
Atlanta Fed President Raphael Bostic struck a caution tone on rate cuts Monday, the anticipation of the Fed cutting rates sooner rather than later could feed into the "pent- up exuberance," unleashing a fresh wave of demand-led inflation on stronger economic growth and undoing the Fed's progress.
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