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One year on from the market lows, the markets were relatively benign in trading as a lack of economic data failed to provide any real directional bias. Volumes were light, with 7bn shares exchanging hands, the second lowest amount of the year, as traders appeared to sit on the sidelines.
The Financial Times has reported that [...]

Gold Slumps On China Speculation
* UK BRC Retail Sales (Feb) rose +2.2% y/y.
* France’s Trade Deficit (Jan) was better than expected at EUR -3.681bn.
* Switzerland CPI (Feb) ticked down to+0.9% y/y (1.0% expected, 1.0% prior).
* UK Trade Deficit (Jan) came out at a lower than anticipated GBP -7.987bn (7.00bn expected) but last month’s reading revised [...]

The price of oil stayed above the $80 level as data showed that net long positions are at their highest levels since January. The catalysts for the moves up are a weaker dollar, political unrest in Nigeria, and Chinese intention to build up oil reserves. Note that oil has traded above, and more importantly stayed [...]

Sterling continued to trade lower following the release of the latest RICS data and poor retail sales numbers. Only 17% of respondents reported rising house prices, the smallest percentage in six months, and well below expectations of 30%. UK retail sales numbers rose 2.2% in February, highlighting an air of caution amongst consumers. The third [...]

China’s Comments Will Haunt Gold Buyers
FX markets were nervously quiet in Asian session, just waiting for a directional catalysis. Initially, the deputy governor of the PBoC and the head of the SAFE, Yi Gang, at a press conference in Asia, provided some detailed and honest comments regarding China’s foreign exchange and reserve policy. These comments [...]

China’s chief foreign exchange regulator said that they may have limited appetite for buying gold in the international markets, preferring to buy domestic gold from Chinese producers.
Despite being the world’s largest gold producer, there was a school of thought that they may be tempted to buy gold of the IMF, who have made 191 tonnes [...]

China Adds Clarity to Potential Exchange Rate Flexibility
* Japan Jan leading index rose 2.4 points, coincident index up 2.5 points.
* UK Feb RICS house price balance jumped to 17 vs. 30 exp lowest since Aug “09, prior Jan reading 31.
* UK Feb BRC like-for-like retail sales 2.2% y/y vs.Jan -0.7%, lowest in survey history, while [...]

Greek PM Papandreou Comments Rattle EUR/USD
* Switzerland unemployment rate (Feb) fell to 4.4% in line with expectations (4.5% prior).
* Switzerland retail sales (Jan) surged +4.4% y/y as expected, but prior reading was revised down to 4.4% from 4.7%.
* EU Sentix investor confidence index (Mar) posted a slightly better than expected -7.5% (8.8% expected, 8.2% prior).
* [...]

The Dow rallied 2.3% last week, as the improving jobs market buoyed global indices. Friday’s non-farm payroll release showed 36,000 jobs were lost in February, much better than was anticipated. Despite not showing a positive number, traders have taken this as a sign of the improving state of the economic landscape in the US, one [...]

Pressure on Greece and EUR Ease
Risk appetite has been cautiously creeping back into FX markets at the start of this trading week. While a one day doesn’t make a trend, the broader environment is shaping up to support a sustained rally in risk sentiment.
First of all, the passing of the new austerity measures by [...]