FOREX
Forex – The dollar edged up on Monday after multiple Federal Reserve officials in separate appearances sounded a hawkish tone, suggesting U.S. interest rate increases were a "live" possibility at the central bank's upcoming meeting in April.
The U.S. central bank surprised investors last week by lowering its outlook for rate increases in 2016 and sounded a note of caution on the fragile global economy. That triggered heavy selling from traders betting on a stronger dollar. The dollar's strength was also buoyed by a slide in sterling on rising 'Brexit' fears. The British pound sank more than half a percent on concerns that a split in the ruling Conservative Party is deepening ahead of June's referendum on European Union membership.
Worries about Prime Minister David Cameron's ability to keep his Conservative party together and keep Britain in the European Union jumped after Iain Duncan Smith, a leading voice for the UK to exit the EU, resigned from the cabinet late on Friday.
The dollar rose to a one-week high against a basket of currencies on Wednesday as Federal Reserve officials talked up the likelihood of more interest rates later this year, perhaps as early as April. The dollar index, which tracks the U.S. currency against six major rivals, rose about 0.4 percent, the highest level since March 16. The greenback also rose broadly against oil-linked currencies as crude futures fell more than 3 percent. The Canadian and Australian dollars, as well as the Mexican peso,, each fell by more than 1 percent.
The dollar eked out a modest rise on Thursday for its fifth straight day of gains, the longest in almost a year, although it came off highs in late trading after weak U.S. economic data. Against the yen, the dollar posted its largest one-day percentage gain in nearly two weeks, rising 0.4 percent against the Japanese currency. The euro hit an eight-day low, having lost nearly 1 percent so far this week, with attacks in Brussels on Tuesday bruising sentiment. Sterling rose against the dollar for the first time this week, as the pound benefited from U.K. retail sales numbers that exceeded expectations.
INDICES
Indices - Global equity markets edged lower on Monday as the dollar strengthened and U.S. Treasury yields rose on hawkish commentary from several Federal Reserve officials. The stronger dollar weighed on European equities, with the pan-European FTSEurofirst stock index closing down 0.25 percent to start a week shortened by the Easter break. U.S. stocks were little changed as investors looked for fresh catalysts after a five-week rally that pushed the benchmark S&P 500 into positive territory for the year..
The Dow Jones industrial average rose 0.12 percent, the S&P 500 gained 0.1 percent, and the Nasdaq Composite added 0.28 percent. MSCI's index of world shares shed 0.14 percent.
Global equity markets fell and the dollar advanced on Wednesday as hawkish comments by Federal Reserve officials put investors on guard for the possibility of more U.S. interest rate hikes this year than currently anticipated. The FTSEuroFirst 300 index of leading shares closed down 0.11 percent as MSCI's index of world shares lost 0.8 percent. The Dow Jones industrial average fell or 0.45 percent, to, the S&P 500 lost 0.64 percent; the Nasdaq Composite dropped 1.1 percent.
World markets declined on Thursday and the dollar added to a recent string of gains after another U.S. Federal Reserve official talked of higher U.S. interest rates before long. U.S. crude settled down 0.83 percent at $39.46 a barrel The oil pullback has pressured U.S. and European equities this week, with the pan-European FTSEurofirst 300 index and S&P 500 suffering their worst drop in six weeks.
European stocks ended up on Friday but slightly lower for the week. MSCI's index of stocks in major developed markets gained 1.4 percent this week and stocks in emerging markets jumped 3.2 percent in their third straight weekly advance.MSCI's index of world shares, down 0.57 percent on the session, was off 1.4 percent for the week.
COMMODITIES
Commodities - Gold fell on Monday for a third day, with demand for bullion hurt as the dollar arrested three weeks of declines, after hawkish comments from U.S. Federal Reserve officials renewed expectations of U.S. interest rate hikes. Spot gold was down 0.9 percent an ounce at 3:43 p.m. ET (1943 GMT), while U.S. gold futures for April delivery settled down. Spot gold fell about two percent on Wednesday, one of its deepest declines of the past year, as the dollar strengthened following hawkish comments by Federal Reserve officials on the path of U.S. interest rates. Bullion tumbled to its lowest in a month, reversing the gains made the previous day when investors sought "safe haven" assets after deadly bomb attacks on Brussels. Gold rebounded after touching a four-week low on Thursday, but prices were still poised for their biggest weekly loss since November as the prospect of more U.S. interest rate rises has bolstered the dollar.
Raw sugar futures climbed on Monday to the highest in more than a year, bolstered by currency gyrations, increasing expectations that a world supply deficit will be bigger than previously thought,. Arabica coffee and cocoa on ICE Futures U.S. fell. Sugar futures rallied to a 17-month high on Tuesday on currency gyrations and expectations of tightening supplies, and Arabica coffee recovered the previous day's losses. Cocoa futures fell, under pressure from an improving outlook for mid-crops in West Africa and gains in the U.S. dollar against other major currencies. Raw sugar futures plunged over 5 percent on Thursday, stemming a four-week rally and toppling from the previous day's 17-month peak as investors booked profits ahead of the long weekend and a strong U.S. dollar and weak commodities markets weighed. Cocoa and coffee on ICE Futures U.S. also succumbed to a broad-based selling spree that sent the bellwether Thomson Reuters/Core Commodity Index l ower.
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ENERGY
Crude Oil - Crude oil slid for a second session on Monday, falling further from last week's 2016 highs on concerns over a supply glut after the U.S rig count rose for the first time since December. U.S. energy firms last week added one oil rig after 12 weeks of cuts, according to data by industry firm Baker Hughes. The addition, coming after oil rigs had fallen by two-thirds over the past year to 2009 lows, showed the fall in crude drilling stabilising after a 50 percent price rally since February.
Oil prices tumbled 4 percent on Wednesday, with U.S crude settling below the key $40 per barrel mark after a sixth straight week of record highs in stockpiles that traders warned could cut short the market's two-month long rally. Weak equity markets also sapped the strength in oil while a strong dollar weighed on demand for crude from users of the euro and other currencies. The U.S. government's Energy Information Administration (EIA) said crude stockpiles rose 9.4 million barrels last week - three times the 3.1 million barrels build forecast by analysts in a Reuters poll.
Oil prices steadied on Thursday, paring losses after a renewed drop in U.S. oil rigs, but analysts and traders said there could be another selloff in the coming week if U.S. crude stockpiles hit record highs again. Earlier in the day, U.S. crude futures slid 4 percent, extending the bearish sentiment induced by Wednesday's stockpiles figure.
Natural Gas – U.S. natural gas futures on Monday fell more than 4 percent to the lowest level in a week on weather forecasts calling for warmer weather and less heating demand as traders exited long positions entered during a short-covering rally over the past two weeks.
The latest U.S. weather model forecast switched from cooler, below-normal temperatures over the next two weeks to warmer near-normal levels. After gaining more than 14 percent over the past two weeks, front-month gas futures on the New York Mercantile Exchange closed down 7.9 cents per million British thermal units.
U.S. natural gas futures on Wednesday fell nearly 4 percent to the lowest level in two weeks on the latest forecasts for warmer weather over the next two weeks that was expected to reduce heating demand. Front-month gas futures on the New York Mercantile Exchange closed down 6.9 cents per million British thermal units.Natural gas futures on Thursday edged higher ahead of the Easter holiday weekend, following the first storage build of the year that was smaller than expected. The U.S. Energy Information Administration said utilities added 15 billion cubic feet of gas to storage in the week to March 18.That was a little less than analysts' 20 bcf forecast in a Reuters poll and compares with draws of 4 bcf a year earlier and a five-year average draw of around 24 bcf.
