The Japanese yen seemed to be the main beneficiary of today’s Asian session, as traders were still adjusting to Fed Chair Janet Yellen’s message that caution was required in raising interest rates higher than their present 0.50% in the United States. Friday’s strong employment report was insufficient at this point to sway the Fed to change its mind, according to the prevailing market view.
Yellen’s remarks continued to weigh on the US dollar, which traded near a 15-month low versus the Japanese yen at 111.43. Although the stronger yen weighed on the Nikkei (down by 0.25%), other Asian stock markets were mostly in positive territory, boosted by a strong finish on Wall Street on Friday. China was closed due to a national holiday, which made for a more-quiet-than-usual session. Oil continued to be under pressure as doubts grew whether oil producers would be able to agree on an output freeze. This followed comments by the Saudi deputy crown prince that all the main producers, including Iran, Russia and Venezuela, should agree to a freeze in order for Saudi Arabia to join. Elsewhere, Russian oil output rose to its highest in 30 years, data from the country’s Energy Ministry showed on Saturday.
In Australia, the Aussie lost ground versus the US dollar following its failure to hold 8-month highs above 77 US cents on Thursday and Friday the previous week in the wake of Yellen’s speech. The Aussie was last trading at 0.7625. A big miss in retail sales numbers for February (unchanged versus expectations of 0.4% month-on-month gains), led to somewhat higher chances of a rate cut or at least a more dovish statement when the Reserve Bank of Australia holds its meeting tomorrow.
Looking ahead to the remainder of the day, there will be plenty for traders and investors to follow even though the releases might not move the markets much. Starting from Europe, Eurozone Sentix Investor Confidence together with UK Construction PMI will come out first, followed by Eurozone producer prices and unemployment. Later during the US session, February factory orders out of the United States may also attract attention, following a better-than-expected ISM manufacturing survey released on Friday.