Pound Rises From 5 1/2-Year Low

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The pound rallied from its lowest level in 5 1/2 years as traders awaited signals from the Bank of England about the path of interest rates amid speculation the recent selloff has gone too far.

Sterling also rebounded from Friday’s one-year low against the euro and climbed versus most of its 16 major peers. How far this advance has to run may be determined by a slew of economic reports due this week, including data on inflation, wage growth and retail sales. BOE Governor Mark Carney will give his thoughts on the outlook for the U.K. for the first time this year on Tuesday, while fellow Monetary Policy Committee member Gertjan Vlieghe is speaking late Monday.

Britain’s currency has declined 3 percent versus the dollar in 2016 as global market turmoil sparked by China and concerns Britain may vote to leave the European Union drive investors away.

The pound rose 0.1 percent to $1.4270 as of 4:55 p.m. London time, after sliding to $1.4248, the lowest level since May 2010. It strengthened 0.4 percent to 76.28 pence per euro, its biggest gain in a week and up from 76.95 on Friday, the weakest level since Jan. 21, 2015.

Source : Bloomberg

Brent Near 12-Year Low as Iran Comeback to Swell Glut

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Brent crude traded near a 12-year low in London, briefly dipping below $28 a barrel, after the lifting of international sanctions on Iran paved the way for increased supply amid a global glut.

Futures were little changed after earlier dropping as much as 4.4 percent in London to the lowest since November 2003. Iran is beginning efforts to boost output and exports by 500,000 barrels a day now that restrictions have ended, Amir Hossein Zamaninia, deputy oil minister for commerce and international affairs, said Sunday. Saudi Oil Minister Ali al-Naimi dismissed supply concerns with a forecast that prices will recover.

Brent capped a third annual loss in 2015 as the Organization of Petroleum Exporting Countries effectively abandoned output limits. Iran, which was OPEC’s second-biggest producer before sanctions were intensified in 2012, is trying to regain its lost market share and doesn’t intend to pressure prices, officials from its petroleum ministry and national oil company said this month.

Brent for March settlement fell as much as $1.27 to $27.67 a barrel on the London-based ICE Futures Europe exchange and was at $28.99 as of 11:19 a.m. London time. Front-month prices declined 14 percent last week for a third weekly drop. The European benchmark crude was at a discount of as much as $2 to West Texas Intermediate for March, the most since 2010.

WTI for February delivery fell as much as $1.06, or 3.6 percent, to $28.36 a barrel on the New York Mercantile Exchange. The contract slid $1.78 on Friday. Total volume traded Monday was more than double the 100-day average. Prices have lost 22 percent this year.

Source: Bloomberg

Asian Stocks Set for More Losses as Traders Brace for China Data

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Asian index futures signaled further losses for the region’s stocks, with a swathe of data on China’s economy expected to be the focus of Tuesday trading. The yen maintained declines following a rebound in some high-yielding currencies.

New Zealand shares opened marginally lower, while contracts on Japanese equities foreshadowed a fourth straight day of losses, after global stocks slid to their lowest level since July 2013 on Monday, with U.S. markets closed for a holiday. The yen was steady following a retreat of more than 0.2 percent with the euro, while Australian 10-year bonds were little changed for a second day. Brent oil settled at a 12-year low last session, after breaching $28 a barrel on Iran’s plans to bolster crude output following the removal of international sanctions. China’s yuan climbed a third day ahead of the economic data.

China’s slowdown has soured sentiment toward Asian equities since last year’s August rout.

New Zealand’s S&P/NZX 50 Index dropped 0.2 percent as of 7:36 a.m. Tokyo time, following Monday’s 1.1 percent decline, while futures on the S&P/ASX 200 Index in Sydney fell 0.6 percent.

In Japan, Nikkei 225 Stock Average futures were down 0.2 percent to 16,830 in Osaka, amid a 0.3 percent rally in yen-denominated index contracts traded in Chicago. Futures on the Kospi index in Seoul declined 0.3 percent.

Hang Seng Index futures retreated 0.3 percent in most recent trading, with those on the Hang Seng China Enterprises Index, a gauge of mainland equities listed in Hong Kong, signaling a drop of 0.2 percent. The measure slid to its lowest level since October 2011 on Monday. FTSE China A50 Index futures gained 1 percent following a 0.4 percent climb in the Shanghai Composite Index last session.

As well as the Chinese data dump, investors are bracing for an update on Japanese machine tool orders and the Hong Kong jobless rate. Trading in Treasuries will resume as American markets restart following the public holiday.

Source: Bloomberg

European Stock Plunge Deepens in Volatile Trading as Banks Slump

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A decline in bank shares dragged European stocks down for a third day, with the Stoxx Europe 600 Index extending a one-year low.

The benchmark equity measure dropped 0.4 percent, closing at its lowest level since December 2014. The Stoxx 600 climbed as much as 1.2 percent after the market opened and later fell 0.8 percent. Lenders completed their biggest three-day drop since August, tumbling 7.5 percent in the period.

A third week of declines left the Stoxx 600 more than 20 percent below its April record, meeting the common definition of a bear market. On Monday, trading in its shares was about 18 percent greater than the 30-day average.

Worries over global growth and an oil rout took over sentiment, sending European equities back to where they were before the region’s central bank announced it would start its quantitative-easing program. In 2016 alone, the Stoxx 600 has lost 10 percent. The VStoxx Index, a measure tracking volatility in euro-area shares, reached its highest level since September last week.

The declines took the Stoxx 600’s valuation below 14 times estimated earnings for the first time since last January, while the multiple for the Standard & Poor’s 500 Index fell to 15.3. Futures on the gauge slipped 0.1 percent on Monday, with U.S. markets closed for a holiday.

Source : Bloomberg

Asian Stock Rout Deepens as Japan, Australia Bear Markets Loom

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Asian stocks fell, with Japanese and Australian shares on the cusp of joining China in a bear market, as a continuing collapse in oil prices heightened concern over the strength of the global economy.

The MSCI Asia Pacific Index lost 0.9 percent to 119.05 as of 4:06 p.m. in Hong Kong, extending this year’s slide to 9.8 percent. Japan’s Nikkei 225 Stock Average declined 1.1 percent after plunging as much as 2.8 percent in early trading, while Australia’s S&P/ASX 200 Index slipped 0.7 percent. Both are down 19 percent from their 2015 peaks, approaching the 20 percent level that would send them into bear markets.

Oil is below $30 a barrel for the first time in 12 years as global growth worries roil equity, bond and currency markets. Investors awaited 2015 gross domestic product estimates from China on Tuesday as it struggles to boost a slowing economy and money managers debate how many times the Federal Reserve will raise interest rates this year.