Euro Jumps on Trump Adviser Comments as Gold Gains. The euro rose after a trade adviser to U.S. President Donald Trump said Germany is benefiting from a “grossly undervalued” currency while controversy around the White House’s immigration policy drove haven purchases of gold.

The common currency extended gains after the Financial Times reported the comments by Peter Navarro, building on an earlier advance after euro-area growth and inflation beat forecasts. Gold climbed for a third day as investors hedged political risk over Trump’s ban on travel from some Muslim-majority nations. The dollar reached its lowest level since early December.

As enthusiasm dimmed for Trump’s fiscal easing promises, quickening inflation in Germany, Spain and France underscore rebounding global growth that could help focus investors on fundamentals. The Federal Reserve’s policy decision on Wednesday may offer more insight into the state of health of the world’s largest economy.

“We’ll get back to the Trump economic program, and the implications for Fed policy, before too long,” according to Kit Juckes, global strategist at Societe Generale SA.

What’s coming up in the markets:

• The lower house of Parliament will begin on Tuesday to debate a 137-word bill that gives Prime Minister Theresa May permission to start the legal mechanism by which the U.K. will leave the European Union.
• The Fed, like the BOJ, is expected to leave lending rates where they are, though its statement will be parsed for any reading on Trump’s impact on the world’s largest economy.
• Trump plans to announce his nomination to the Supreme Court Tuesday, a move likely to dominate headlines and perhaps delay the presentation of further details on spending policies.
• Apple Inc., Facebook Inc. and Amazon.com Inc. are among the major U.S. companies due to report results this week. Of the S&P 500 names to report so far, 73 percent have topped profit estimates.

Currencies

• The U.S. Dollar Index dropped 0.3 percent, poised for its lowest level since Nov. 15.
• The euro gained 0.6 percent to $1.0747.

Stocks

• The Stoxx Europe 600 Index added 0.2 percent, rebounding from its deepest declines since the U.S. election.
• S&P 500 futures fell 0.2 percent, its third day of declines.

Bonds

• European bonds fell. The yield on German 10-year bunds rose two basis points to 0.46 percent, while Gilt yields increased one basis point to 1.45 percent.
• Treasury 10-year note yields were little changed at 2.49 percent.

Commodities

• West Texas Intermediate crude rose 0.4 percent to $52.83 a barrel, after losing more than 1 percent during each of the previous two sessions. Crude is heading for a monthly drop of 3.3 percent as signs that U.S. supply is expanding offset OPEC’s production curbs.
• Gold added 0.7 percent to $1,203.64 an ounce, and is heading for its biggest monthly rally since June.
• Bloomberg Commodity Index set for first monthly loss since October.

Source – Bloomberg

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