US indices spent most of the session in the red after poor auto sale data dampened sentiment but gradually squeezed higher to close the session relatively flat with the DJIA finishing lower by 0.06%, the S&P500 closed lower by 0.16% and the NASDAQ 100 shed 0.07%. The subdued trading carried over to the Asian session where equities were slightly more bearish, with the ASX 200 losing 0.4% as financials and telecoms dragged the index lower. The Nikkei 225 shed 1.3% due to a stronger JPY weighing down the exporting sector and automobiles slumping over the drop-in US auto sales.
In FX, the USD Index remained relatively flat overnight as we saw the majority of Asian markets closed for public holidays. The JPY strengthened against it major counterparts as market sentiment seemed to sour and a risk off tone settled in. The GBP was dragged lower by political factors as the UK and EU lock heads over Gibraltar, with the UK claiming any agreement for the UK should cover the island too while the EU`s stance is that Spain would have the right for the final say on the fate of the island. The Australian dollar weekend across the board after the RBA Rate statement disappointed markets with the dovish tone reverberating throughout as the AUUDUSD dipped below 0.7600.
In commodities, crude oil remains range bound between $50 and $51 as further directions sought. Crude is expected to remain sensitive to supply and demand expectations with an expectation of a dip in demand or an increase in supply likely to cause the commodity to dip back below the $50 mark while an expected increase in demand or decrease in supply will see crud look to trade beyond the $51 resistance level. Gold, jumped on the bandwagon of safe haven buying as we saw buyers of the precious metal fend off selling pressure at the $1245 support level before driving it higher beyond the $1255 resistance level. Gold will remain sensitive to global instability and the strength of the USD with a stronger USD or an improvement in risk appetite likely to see the precious metal reclaim 1250 while a drop in the USD or continued global tension will see the precious metal move higher.
Today sees several key releases from all major economies and better than expected releases are expected to bode well for their respective currencies as they appreciate and vice versa if the data comes in worse than expected.