Geopolitical tensions continue to dominate headlines

Monday, March 31, 2014

Asian equity markets had a mixed start to the week as Chinese benchmark equity indices ended the session on the back foot while Japanese indices added modest gains despite weaker economic data. Both the Nikkei and TOPIX extended Friday’s gains despite industrial production posting a surprise drop of -2.3% m/m in February from 3.8% growth the previous month. The strong start to the week ahead of the scheduled sales tax increase was prompted by steady gains on Wall Street on Friday as personal income and spending growth came in as expected for February. Over in China, both the CSI 300 and Shanghai composite edged lower for the fourth consecutive session on thin volume as market participants continued to hold out for hopes of stimulus.  

Spot gold prices remain underpinned by the 200 day MA this morning after pulling back from a six week intraday low on Friday. Geopolitical concerns between Russia and Ukraine remain high on the agenda for many investors but sentiment has been dominated by the outlook for US interest rates in recent weeks. Prices remain resistant to moves above $1,296/oz this morning after losing 3% last week on stronger US durable goods orders and consumer confidence data.

Headlines this week will continue to be dominated by the Ukraine crisis with increasing volatility across risk assets as jittery investors react to further threats of sanctions against Russia by Western powers. Hints of sanctions specifically targeted at the energy complex could offer further support to natural gas and crude oil, magnifying the risk premium.

On the macro front, the Chicago PMI and Dallas Fed manufacturing index expected later today as well as factory orders, unemployment data and non-farm payrolls later in the week which will keep investors engaged and provide further clarity regarding US growth momentum.

Japanese industrial output posts a surprise -2.3% m/m drop in February

JNIPMOM Index Japan Indices Of 2014 03 31 07 22 36

Spot gold prices dropped for the second consecutive week on US rates speculation

XAU Curncy Gold Spot Oz W 2014 03 31 08 03 55



Events for today

1445

US

Mar

Chicago PMI

1530

US

Mar

Midwest Manufacturing

All times UK Local Time

 

Topics: Equities, Gold, PMI
More from: Kash Kamal