US dollar under scrutiny; market awaits ADP and JOLTs data, J. Powell’s testimony

Tech stocks

US indices fell on Monday, led by tech stocks;Apple shares shed 3% in yesterday's session after the market learned that iPhone sales in China fell 24% year-on-year in the first six weeks of 2024. Its Chinese competitor, Huawei, saw unit sales rise by 64% in the period, according to the same report. Tesla shares were also down after production halted at its German gigafactory. Production is not expected to resume until next week after a suspected arson attack severed both power lines feeding the plant.

The Reserve Bank of Australia

In Australia, the latest growth data show that the balance of risks in the economy is shifting from inflation to growth, which reinforces bets that the next The Reserve Bank of Australia (RBA) move could be a rate cut. The Australian economy expanded 0.2% in the fourth quarter, missing forecasts of 0.3%. That compared with an upwardly revised 0.3% expansion in the prior quarter. Annual growth slowed to 1.5%, down from 2.1% the previous quarter and the lowest since early 2021. High borrowing costs have done a great job of curbing demand. In Q4, household spending did not add to economic growth. Spending on essentials rose by 0.7% but was offset by a 0.9% fall in discretionary spending.

German trade surplus

In Germany, the trade surplus widened to €27.5 billion, helped by a rise in exports of 6.3% month-over-month (MoM).

S&P Global UK Construction PMI

In the UK, at 9:30am, S&P Global UK Construction Purchasing Managers (PMI) is seen rising to 49 for February from 48.8 in the prior month, the slowest contraction in UK construction since August last year. But it also means that the sector would remain in contract for the sixth month in a row.

Jeremy Hunt

In his Spring Budget, Chancellor of the Exchequer Jeremy Hunt expected to give a £10bn personal tax in the form of a 2p cut in NI payments and scrap the so-called "non-dom" status, giving overseas people a tax break.

The US dollar

The USD could be tested later today with the release of two job-related indicators in the US. First, at 1.15 p.m., ADP employment change. US private businesses are forecast to have hired 150,000 workers in February, after 107,000 job creations in January. Then at 3 p.m.: job openings and labor turnover survey (JOLTs) job openings. The number of job openings is thought to have dropped to 8.895 million in January, 131,000 fewer than in December. The greenback is also likely to react to Jerome Powell's testimony to Congress.

The Bank of Canada

The Bank of Canada is expected to leave rates on hold today. The monetary policy voting members are expected to reference patience in a worsening outlook for the Canadian economy, with many saying that weakening economic conditions are setting the stage for rate cuts in the coming months. Rates are expected to be left at the current five percent, with many forecasters anticipating the first rate cut to come in around June.

Legal & General

Legal & General reported an operating profit of £1.67 billion for 2023, below expectations and in what the insurer calls a "challenging" economic environment." Operating profit was forecast at 1.75 billion pounds, according to a company-supplied consensus poll. L&G says it is on course to achieve its five-year targets.

Tullow Oil

Tullow Oil posted a net loss of $110 million in 2023. Revenue came in at $1.63 billion, lower than a year ago. Profit before tax dropped to $96 million, compared to $442 million a year ago.