RBA: Underutilisation Tight, Hours & Vacancies Moderating

• As Friday’s sell off fades into the background and the rally resumes, the biggest sell off of the year appears to be nothing more than profit taking, a view supported by holdings data showing money managers have reduced positions.
• Overnight, gold resumed its rally up +.49% to US2,896.56 in US trading and despite a slow start in the Asian trading day, suddenly jumped higher to bust through $2,900 to reach $2,909.80.
• Gold has benefited from concerns over tariffs and overnight the President spoke again about tariffs saying, “On Trade, I have decided, for purposes of Fairness, that whatever Countries charge the United States of America, we will charge them - No more, no less!"  He continued saying "I have instructed my Secretary of State, Secretary of Commerce, Secretary of the Treasury, and United States Trade Representative (USTR) to do all work necessary to deliver reciprocity to our System of Trade!"
• The technicals for gold remain the same, with the uptrend still intact and with the risks of an all-out trade war coupled with an signs that inflation isn’t gone in the US,  the near term demand dynamic for gold could see it push through the $3,000 barrier sooner than expected. 

Oil prices are higher today with WTI up 0.8% to $71.31/bbl after a low of $71.13 and Brent steadfy around $75.25/bbl following a trough of $75.05. They rose on Monday driven by news of private talks amongst OPEC members to possibly delay the start of output normalisation again. The USD index is up 0.2%.

• An attack by Ukrainian drones on Russian oil infrastructure has also supported prices. It has resulted in flows from Kazakhstan having to slow. They had been scheduled to run at 1.6mbd this month and next.
• If OPEC again delays its gradual reduction in output cuts due to begin in April, it would be the fourth such postponement. The group had planned to increase production by 120kbd but excess global supply appears to be disrupting the schedule. Bloomberg is saying that Russia’s Deputy PM is denying that talks are underway.
• Market participants are more bearish on oil with prompt spreads narrowing and bullish positions being decreased.
• Later the Fed’s Daly and Barr speak and February US Empire manufacturing and NAHB housing print. There are also UK labour market data, February euro area ZEW and January Canadian CPIs. The ECB’s Cipollone participates in an MNI Connect event.

 *JAPAN 20Y GOVT BOND AUCTION MAY HAVE 99.65 LOWEST PRICE:POLL – BLOOMBERG