Forex – The Japanese yen rose broadly on Monday

FOREX

Forex – The Japanese yen rose broadly on Monday as investors sought safety after a statement from the Group of 20 countries offered no concrete action to address concerns about slow growth and low inflation.

The yen has fully retraced the previous Friday's decline and was on track to post its best monthly performance against the dollar in more than seven years. Against the euro, the yen was set to record its largest monthly percentage gain in more than a year. Weaker-than-expected data on the Chicago manufacturing sector and U.S. pending home sales data also pushed the dollar lower versus the yen. But it was the G20 statement that drove the yen to a great start on Monday.

The dollar traded at around a one-month high against a basket of major currencies on Wednesday, after encouraging U.S. economic data drove investors to bet that the Federal Reserve may hike interest rates this year after all. With a rebound in oil prices and a rally in stocks stoking risk appetite, the greenback climbed to a two-week high of 113.47. The Australian dollar was the biggest gainer on the day, up almost 1 percent at one point, on figures that showed Australia's economy outpaced all forecasts to grow at the fastest pace in almost two years last quarter.

The dollar recovered from its biggest daily fall in a month in European trade on Friday, with soft service sector employment data keeping markets on edge ahead of official U.S. jobs numbers. The solid payrolls reading of 242k in February vs 190k estimate on Friday would likely support the dollar further, even if some analysts warn that the bullish number will support rises in U.S. interest rates and also has the potential to unnerve stock and bond markets. In addition to the U.S. jobs data, events in China were also in focus with the National People's Congress- an annual meeting of the country's parliament - kicking off on Saturday. Investors will study how China will try to steer a slowing economy as Beijing finalises its plan for development over the next five years.

INDICES

Indices - A gauge of stocks across the globe on Monday posted its fourth straight month of declines, while crude oil notched its first positive month since October. Stocks rose through most of the U.S. session after China's central bank resumed its easing cycle by injecting an estimated $100 billion worth of long-term cash into the economy. However, Wall Street sold off into the close and the global stocks gauge finished in the red. Equity markets so far this year have been strongly correlated with crude oil futures, which earlier this month tanked to decade lows.

A late bounce on Wall Street, backed by a rise in oil prices, helped propel a measure of global equity markets to its highest in nearly two months on Wednesday. The move higher in crude futures, which rose about 1 percent despite a report that showed U.S. stockpiles at a record high, spurred U.S. stocks to a higher close on the day. The Dow Jones industrial average rose 0.2 percent, the S&P 500 gained 0.41 percent and the Nasdaq Composite added 0.29 percent. MSCI's broadest gauge of the world's stock markets rose 0.9 percent to its highest since Jan. 7. European and Asian stocks rose as stimulus measures in China and expected easing in Europe renewed global investors' appetite for risk. European markets closed up for a fifth straight day, backed by the prospect of further monetary easing by the European Central Bank. That five-day growth spurt marked their longest winning streak in five months.

A gauge of stock markets worldwide rose to a two-month high on Friday, posting its largest weekly gain since October, as oil and other commodity prices firmed and strong U.S. jobs growth bolstered confidence in the global economy. The recovery in commodities lifted emerging markets shares, which rose 1.6 percent on the day. MSCI's emerging-market stock metric posted its largest one-week gain since December 2011. U.S. equity indexes rose to their highest levels since early January following the jobs data, which showed strong growth in payrolls and an increase in labour-force participation, though there was a surprising decline in hourly wages. Nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, but average hourly wages dipped by 0.1 percent after a strong 0.5 percent increase in January.

COMMODITIES

Commodities - Gold rose 1 percent on Monday, boosted by lower equities and weak U.S. data, leaving the metal well placed to log its best monthly performance in four years as turmoil in wider markets increased its safe-haven appeal. Gold rose 1.3 percent by 2:56 p.m. EST (1956 GMT) and was on track to finish February up 10.6 percent, its strongest monthly performance since January 2012. Gold rebounded on Wednesday as the U.S. dollar turned lower, shrugging off a turn higher in global shares and better-than-expected U.S. economic data. Spot Gold, lower initially, rose 0.8 percent an ounce by 3:14 p.m. EST (2014 GMT), while U.S. gold futures for April delivery settled up 0.9 percent an ounce. San Francisco Federal Reserve President John Williams said there has been no substantial change in his outlook on the U.S. economy or his opinion on the number of times the Fed should raise interest rates this year and next. Gold prices were flat on Friday, late in a seesaw session that took prices to a 13-month high twice on technical and underlying investment demand, with a sharp drop in between due to forecast-beating U.S. payrolls data.

Sugar prices on ICE surged in a late-day rally on technical buy signals on Monday, with the spot contract jumping to a five-week high as the market focused on expectations for a modest delivery against the expiring contract. Cocoa prices rallied as spot London options expired, pulling futures up to the active strike levels. Coffee rallied more than 3 percent, in a dramatic turnaround after nearly touching a new low last week. Sugar futures extended gains to an eight-week high on Wednesday, with supplies tightened by drought-hit crops in Thailand and India, and the prospect of increased use of Brazilian cane by the ethanol sector, dealers said. Coffee futures turned higher on Wednesday after buying emerged just above contract lows for the second consecutive day while London cocoa retreated from a four-week high set earlier this week. Sugar on ICE steadied after rising to a 6-week high on Friday, after extending gains in a technically strong market on support from a firmer Brazilian currency and possible delays to the start of the cane harvest in Brazil due to rains. Coffee rose for the third straight day, also buoyed by the stronger Brazilian real, while New York cocoa rose to a two-month high as the British pound firmed against the U.S. dollar.

Henyep Investment (UK) Ltd is a company of the Henyep Financial Group and is authorised and regulated by the Financial Conduct Authority (FCA).

ENERGY

Crude Oil - Oil prices jumped 3 percent on Monday after China moved to boost its slowing economy, a drop in crude output from OPEC and the U.S., and a pledge by Saudi Arabia to limit market volatility, suggesting a 20-month selloff could be hitting a bottom. China, the world's largest oil importer, cut its reserve requirement ratio, the amount of cash banks must hold as reserves, for a fifth time in a year.

Crude prices ended up for a third straight day on Wednesday as buyers shrugged off record high U.S. crude stockpiles to focus on an OPEC plan to freeze production, keeping alive the notion that market has bottomed from a near two-year selloff. OPEC member Venezuela said a total of 15 oil producing countries will attend a meeting planned later this month on freezing output at January's highs. Oil prices briefly dipped on U.S. government data that showed crude stockpiles at record highs for the third consecutive week after rising 10.4 million barrels to 518 million barrels last week.

Oil jumped on Friday, settling 4 percent higher as strong U.S. jobs data and technical factors encouraged buying that revived this week's rally after a one-day pause. Prices also got a boost when industry firm Baker Hughes posted data showing the U.S. oil rig count down eight this week for an 11th straight week of declines. Both crude benchmarks were up about 10 percent for the week, with Brent up a second straight week and WTI a third straight. Oil rose after data from the Labour Department showed a surge in U.S. jobs growth for February. The rally intensified after WTI breached the key technical resistance.

Natural Gas – U.S. natural gas futures settled down nearly 5 percent on Monday, testing the 17-year low hit last week, on forecasts for warmer weather over the next two weeks. After falling over 22 percent over the past four weeks, front-month gas futures on the New York Mercantile Exchange closed down eight cents per million British thermal units, putting the contract into technically oversold territory.

Natural gas futures traded at a fresh 17-year low early Thursday on steady forecasts for warm weather and light heating demand over the next two weeks as the market waits for a storage report expected to show a small draw. After the April front-month fell to a contract low per million British thermal units earlier Thursday, the lowest level since February 1999, gas futures on the New York Mercantile Exchange were down 2.21 percent, per million British thermal units.

U.S. natural gas futures ended up a few cents on Friday in a brief round of short covering before the weekend after earlier sinking to within a penny of a 1995 low. Front-month gas futures closed up 1.6 percent, per million British thermal units. Futures have been on a downward spiral for months - off more than 28 percent since the start of the year - as drillers continue to pull near record amounts of gas out of shale fields despite forecasts for warm weather.