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Currencies

The dollar’s safe-haven appeal faded on Monday after risk sentiment in the broader markets picked up following a well-received speech from Federal Reserve Chairman Jerome Powell. A broad retreat in emerging market currencies, notably the Turkish lira, earlier this month had been a key source of strength for the greenback. The euro was little changed at $1.1624 after going as high as $1.1654, its strongest since August 2nd. The single currency had advanced more than 0.7 % on Friday. The Canadian dollar strengthened against its U.S. counterpart on Friday, recovering from an earlier one-week low, the Canadian dollar was trading 0.4 % higher at $1.3031 to the greenback. The dollar was down 0.15% at 111.06 yen. The Chinese yuan extended is rally in the onshore market to as high as 6.8061 per dollar, its strongest since Aug. 8. The yuan had surged about 0.8 % in onshore trade on Friday after the People’s Bank of China said it was adjusting its methodology for fixing the yuan’s daily midpoint, amid broad dollar strength and ongoing trade tensions between Washington and Beijing. The Aussie dollar hovered at $0.7326 having bounced 1% on Friday from a trough of $0.7238. It faces stiff resistance at last week’s top of $0.7333.

Rates

U.S. Treasury prices gave back earlier losses on Friday after Federal Reserve Chairman Jerome Powell made the case for further rate increases. Benchmark 10-year notes fell 2/32 in price on the day to yield 2.828%, after rising to 2.850% before Powell’s speech. The notes have held in a range between 2.822% and 3.016% since the end of May. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.6286% compared with a U.S. close of 2.629%. The yield curve between two-year and 10-year notes flattened to 20 basis points, the flattest since 2007.

Precious Metals

Gold prices held steady on Monday after seeing their best gain in over a year the session before. Spot gold was up 0.1 % at $1,206.34 per ounce. It had climbed 1.7 % on Friday in its biggest one-day %age gain since May 2017. U.S. gold futures were down 0.1 % at $1,212.70 an ounce. Among other precious metals, spot silver edged up 0.1 % to $14.81 an ounce, while platinum was down 0.3 % at $787.99. Palladium was flat at $936.50 an ounce after touching a one-month high of $940.50 earlier in the session.

Oil Prices

Oil prices dipped slightly on Monday on concerns that a U.S.-China trade dispute will erode global economic growth, although looming U.S. sanctions against Iran’s oil sector kept crude from falling further, traders said. International Brent crude oil futures were at $75.75 per barrel, down 7 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were down 9 cents at $68.63 a barrel.

Global Equities

The benchmark S&P 500 stock index clinched its longest bull-market run on Friday, closing above its previous January high. The S&P had last reached a new closing high on Jan. 26, then retreated more than 10%, a correction that lasted until Feb. 8. Friday’s new closing high confirmed that the index’s bull run remained intact. The Dow Jones Industrial Average rose 133.37 points, or 0.52%, to 25,790.35, the S&P 500 gained 17.71 points, or 0.62%, to 2,874.69 and the Nasdaq Composite added 67.52 points, or 0.86%, to 7,945.98. Asian shares rose on Monday, boosted by record Wall Street highs on Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.1%, while Japan’s Nikkei stock index gained 0.9%. Seoul’s Kospi index advanced 0.3%. In China, the Shanghai Composite index added 1.4% and the blue-chip CSI300 index rose 1.9%.

Regional Updates

Saudi Arabia’s stock market outperformed by a large margin on Sunday, led by petrochemical stocks, as Middle Eastern bourses reopened after a one-week break for the Muslim festival of Eid Al Adha. The Saudi stock index rose 1.4%, although trading volume was the lowest this year as some individual investors had not yet returned from holidays. Dubai’s index gained 0.4% as top bank Emirates NBD, which had been sliding because of its exposure to Turkey through an acquisition currently underway, rebounded for a second straight trading day, adding 2.3%.

In Abu Dhabi, the index added 0.5% after Abu Dhabi Commercial Bank jumped in the final minutes of trade to close 2.3% higher. United Arab Bank soared 13.2% but trading volume was very low. Qatar’s index rose in early trade but closed 0.03% lower as real estate firm Ezdan, the most heavily traded stock, sank 3.3%.

Other regional stock markets were much more subdued, even though the MSCI emerging market index climbed 2.7% last week as Turkish markets stabilised after plunging because of the country’s currency crisis.

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