Europe
European markets traded mostly lower on Monday with a meeting between the German and Greek leaders unlikely to reconcile the discontent surrounding a letter from Greece indicating it will be impossible to service its debt under current arrangements.
Greek Prime Minister Alexis Tsipras was meeting with German Chancellor Angela Merkel on Monday, but insiders have already warned the purpose is more relationship-building than generating any meaningful results. With relations fairly strained between the Greek and German finance ministers, the importance of improving relations is not to be underestimated if Greece is to have any hope of getting more aid to help make its debt payments.
Profit-taking was evident in most European indices after another week of gains leading into and following a speech from ECB Head Mario Draghi and the latest data on ECB asset purchases.
UK
UK markets made new all-time record highs again on Monday despite a report from think tank Open Europe forecasting dire economic consequences of a “Brexit” as the index largely tracked commodities higher.
The FTSE 100 made new highs above 7,000 led higher by Standard Chartered (LONDON:STAN) after an analyst upgrade and supported by the basic materials sector that got a lift alongside oil and metal prices.
In a sense both the move higher in Standard Chartered and the commodity complex were triggered by the loss of strength in the US dollar. Emerging markets stand to fair a lot better with a weaker dollar, helping StanChart who specialise in the region whereas commodity prices tend to rise as the dollar falls, which helps mining and oil companies.
BG Group (LONDON:BG) shares traded higher after the company announced it is investing over $1bn with Woodside Petroleum exploring for oil in Myanmar.
SVG Capital (LONDON:SVI) shares traded higher after the private equity company announced a 10% return on its portfolio in the thirteen months through January.
US
US stocks were building on the first week of gains for March aided by a fall in the US dollar and Oil price gains and an increase in monthly new home sales.
Fed speakers Mester and Bullard confirmed expectations of rate hike this year but these comments were largely overlooked by stock and commodity markets that appear to be pricing in a longer time before the first rate hike.
FX
The US Dollar was down against most major currencies with emerging markets outperforming as the Brazilian Real and South African Rand gained most on the prospect of dollar-weakness aiding the prospective economies.
The British pound was one of the sole losers to the US dollar after disappointing industrial trends data showed a two-year low in factory exports, hit the by the stronger pound.
A pickup in Eurozone consumer confidence helped the euro to new move back towards its peak from last Wednesday during the FOMC meeting.
Commodities
Comments from the Saudi oil ministry initially sent crude oil lower but in a demonstration of strength, oil prices reversed and moved higher for the remainder of the session. The Brent - WTI spread widened to back over $10 with the supply glut more obvious in the United States as inventories swell despite the falling rig count.
Copper prices exploded again, re-taking $2.80 per lb for the first time since the start of the year. The move higher appears largely dollar-related and will be exposed by Chinese PMI data released tomorrow.
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