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The German defence ministry said that the country had sent its first shipment of much-awaited Leopard 2 tanks to Ukraine. The safe-haven US dollar index fell this morning.
Australia’s retail sales rose by 0.2% to A$35.14 billion in February, topping market expectations for 0.1% growth, which lent support to the AUD/USD forex pair.
US Federal Reserve Bank of Dallas’ general business activity index for manufacturing in Texas declined for a second month in a row to a reading of -15.7 in March, which sent the Nasdaq 100 index lower by around 0.7% on Monday.
Saudi Arabia’s trade surplus shrank to 38 billion Saudi riyals in January, from 55.7 billion Saudi riyals in the year-ago period, exerting pressure on the SAR/USD forex pair.
The Eurozone’s M3 money supply increased by 2.9% year-over-year to €16.1 trillion in February, sending the EUR/USD pair higher in forex trading this morning.
What’s happening: European stocks started the week on a positive note, despite ongoing concerns around the banking sector.
What happened: Concerns over the stability of the banking sector had resulted in turbulence in the equity markets last week.
Some optimism returned after another acquisition news, following UBS Group’s purchase of Credit Suisse, which lent support to European stocks on Monday.
Why it matters: European banking stocks had lost around 3.8% on Friday, following news related to Deutsche Bank. The bank’s shares fell around 8.5% on Friday, after its credit default swaps spiked 200 basis points, the highest since early 2019.
Some optimism returned to the markets on Monday, following news of First Citizens BancShares planning to acquire all deposits and loans of the troubled Silicon Valley Bridge Bank. Shares of UBS Group AG gained more than 1% on Monday, after the Swiss bank agreed to acquire Credit Suisse in a rescue deal. Credit Suisse’s stock also edged higher.
Markets in Europe are on course to close the first quarter on a positive note amid prospects of major central banks nearing the end of their rate hike cycle. Banking stocks are heading to end the quarter flat, amid high volatility.
Sentiment was also supported by economic data. Germany’s IFO survey showed business confidence increasing to its strongest level in a year. The Ifo Business Climate indicator for Germany rose to 93.3 in March, from 91.1 in the prior month, and topped market estimates of 91.
However, shares of companies related to China came under some pressure on Monday, after data showed a 22.9% year-over-year decline in profits for the country’s industrial firms in the first two months of 2023.
The STOXX Europe 600 Index gained 1.05% to close at 444.72 on Monday, with all sectors closing in the positive zone. Auto and healthcare stocks were among the top performers in the session.
London’s FTSE 100 rose 0.90% to close at 7,471.77 points, led by gains in energy and financials stocks. Germany’s DAX 40 and France’s CAC 40 added 1.14% and 0.90%, respectively.
What to watch: Investors will keep an eye on the banking sector, amid concerns of contagion.
Markets also await the release of data on inflation and unemployment rate, due on Friday. Consumer price inflation in the Eurozone is expected to ease to 7.4% year-over-year in March, from 8.5% in February.
Context: Oil prices settled higher on Monday, building on last week’s gains.
Details: Crude oil prices recovered last week amid some easing in concerns related to the global banking sector. Brent crude ended the week higher by 2.8%, while WTI oil added 3.8%.
Oil prices extended gains on Monday after First Citizens BancShares announced plans to acquire all deposits and loans of Silicon Valley Bridge Bank.
Iraq halted some crude exports from its semi-autonomous Kurdistan region, which also provided a boost to oil prices on Monday.
Prospects of an increase in demand from China lent further support to oil prices. China’s crude oil imports are expected to grow 6.2% year-on-year to 540 million tonnes in 2023, according to a research unit of China National Petroleum Corp.
WTI crude oil for May delivery gained $3.55 to close at $72.81 per barrel on Monday, while Brent crude for May delivery climbed $3.13 to reach $78.12 per barrel.
In other energy trading, wholesale gasoline for April delivery gained 9 cents to $2.68 a gallon, while April heating oil added 7 cents to $2.77 a gallon. April natural gas bucked the trend and declined 13 cents to $2.09 per 1,000 cubic feet.
What are expectations: Traders await the API’s data on crude oil stockpiles today, which had risen by 3.3 million barrels in the week ended March 17, after a rise of 1.2 million barrels in the prior week.
Other Markets: US trading indices closed mixed on Monday, with the Dow Jones index and S&P 500 up by 0.60% and 0.16%, respectively, and the Nasdaq 100 down by 0.74%.
| Technical Levels | News Sentiment |
| USD/JPY – 130.74 and 130.87 | Positive |
| USD/CHF – 0.9140 and 0.9147 | Positive |
| Silver – 23.217 and 23.267 | Negative |
| Nasdaq 100 – 12643.44 and 12709.89 | Positive |
| Nikkei 225 – 27477.16 and 27504.66 | Positive |
| Futures at 0400 (GMT) | ||
| EUR/USD (1.0817, 0.17%) | Dow ($32,680, 0.15%) | Brent ($77.41, -0.5%) |
| GBP/USD (1.2320, 0.28%) | S&P500 ($4,013, 0.15%) | WTI ($72.74, -0.1%) |
| USD/JPY (130.67, -0.68%) | Nasdaq ($12,812, 0.18%) | Gold ($1,962, 0.4%) |
France’s manufacturing climate indicator and business climate indicator, Italy’s consumer confidence and manufacturing confidence, Brazil’s Central Bank Copom meeting minutes, US goods trade balance, wholesale inventories, Redbook index, S&P/Case-Shiller home price index, FHFA house price index, Richmond Fed manufacturing index, Richmond Fed services index, Dallas Fed general business activity index, Saudi Arabia’s money supply M3, value of loans, as well as Argentina’s current account.
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