ASIA

Asian equities traded higher after last weeks end of week gains, helped by prospects of further bank easing and a rebound in energy stocks. The Hang Seng was up 1.6% as it tracked crudes move above $ 32 and reports that the PBOC is planning CNY 800bln mid-term liquidity support. In Japan we saw the Nikkei 225 trade flat as it continues to test the 17000 level breached in late trade last week despite weaker Japanese Trade Data. USDJPY has made significant gains off of the 116 support zone and further upside is expected to the 120.00 level should the risk sentiment continue to stabilize. Dovish comments out of BoJ president Kuroda, stating that the BoJ is not done easing and that they could intervene at any time, is expected to keep markets on their toes.

EUROPE

Germany has marginally reduced their expected growth rate in 2016 by 0.1 bb to 1.7% as low oil prices add pressure to already soft inflation. This is in line with the ECB`s statement that further action might be imminent as current measures have failed to make an impact. This sluggishness is expected to further underpin the EURUSD making parity look more a more likely as the EU-US monetary policy divergence continues to grow. Today sees the German Ifo Business Climate (expected d at 108.5) being released ahead of Mario Draghi`s speech at the Deutsche Borse later today. Dovish comments by the ECB President could be the catalyst for a EUR sell off.

COMMODITIES

WTI crude experience its largest two day rally in 7 years, to trade above $32 a barrel. This led to equities the world over being lifted, the rally was short lived as oil looks to continue lower today, dragging equities lower and continuing to see weakness in the CAD.