Euro Breaks Above $1.10 as Traders Ditch Short Positions Ahead of ECB

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The euro broke above $1.10 on Monday as traders trimmed bets against the euro, hoping to avoid the type of brutal short squeeze that followed the European Central Bank’s December meeting when the central bank meets again later this week.

A breakdown in the historic correlation between the euro-dollar exchange rate and the spread between Treasury and German bunds suggested that the euro’s strength on Monday was largely due to shifts in short-term positioning, said Doug Borthwick, head of currency trading at Chapdelaine & Co.

Treasury yields have risen Monday while those on eurozone and Japanese debt have declined. Typically, this trading pattern would result in a stronger dollar.

The shared currency recently traded at $1.1010, little-changed from its level late Friday in New York, but off a session low of $1.0935 reached early in the day.

ECB President Mario Draghi has repeatedly hinted that the central bank would again expand its easing measures at its March meeting, which is set for Thursday.

Meanwhile, the dollar edged lower against the yen Monday, retreating back below the ¥114 level after pushing higher for most of last week.

The ICE U.S. Dollar index a measure of the currency’s strength against a basket of six rival currencies, was down 0.2% at 97.1360.

Source: MarketWatch

Oil Futures Top $37 to Log Highest Settlement Level of The Year

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Oil futures rallied on Monday, with prices scoring their highest settlement level of the year as traders continue to bet that oil producers will freeze output.

April West Texas Intermediate crude rose $1.98, or 5.5%, to settle at $37.90 a barrel on the New York Mercantile Exchange. That was the highest settlement for a most-active contract since Christmas Eve, according to FactSet Data.

Source : Marketwatch

Hong Kong shares flat despite upbeat mainland markets (Review)

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Hong Kong shares ended Monday roughly flat, ignoring a rally in mainland markets and on the back of rising selling pressure after the benchmark Hang Seng Index rose 10 percent over the past three weeks.

Hang Seng fell 0.1 percent, to 20,159.72, while the China Enterprises Index gained 0.8 percent, to 8,626.31 points.

Hong Hao, managing director of research at BOCOM International, said a Hong Kong rally could resume if appetite for risky assets picks up again.

Energy shares were firm on the back of a sustained rebound in oil prices.

S&P 500 Closes Little Changed as Energy Rally Offsets Tech Slide

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The Standard & Poor’s 500 Index edged higher, tying its longest rally in more than a year, as commodity producers surged with crude oil to offset declines in technology and consumer shares while investors assessed China’s growth prospects.

The S&P 500 advanced 0.1 percent to 2,001.66 at 4 p.m. in New York, with the gauge above its average price during the past 100 days after closing above that level for the first time this year.

China’s leaders failed to announce specific measures to support the world’s second-biggest economy at an ongoing annual legislature meeting, damping speculation of more stimulus. They set an expansion goal of 6.5 percent to 7 percent for 2016, down from last year’s target of around 7 percent, and said they will permit a record-high budget deficit.

Source : Bloomberg

Rally in Energy Stocks Lifts Wall Street Indexes

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Sharp gains in energy and materials stocks lifted the main U.S. indexes, which are now on track to extend their winning streak to five straight sessions.

The S&P 500 index rose 4 points, or 0.2%, to 1,995, with seven of its 10 main sectors trading higher. Apart from the energy and materials sectors, telecoms and health-cares stocks were also trading higher. Technology stocks were the biggest laggards.

The benchmark index has reduced its year-to-date losses to 2% from nearly 10% earlier this year.

The Dow Jones Industrial Average gained 60 points, or 0.4%, to 17,067. The Nasdaq Composite was trading 6 points, or 0.1%, higher at 4,723.

Source : Marketwatch