· China and the United States are moving closer to a trade deal that would end sparring between the world's two biggest economies.
The greenback gained for a fourth straight day, bolstered by the rise in U.S. bond yields with benchmark 10-year yields hitting one-month peaks last week.The gap between benchmark 10-year yields in the United States and Germany has widened to 257 basis points from 240 basis points at the beginning of the year.
The United States and China appeared to be close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese imports, a source briefed on negotiations said on Sunday, but the timing and details for a deal remained unclear.
The dollar index was up 0.12 percent at 96.64. The Chinese yuan edged up 0.08 percent to 6.7097 to the dollar in offshore trade, close to last week's 7 1/2-month high of 6.6737.
The euro was notably weaker against the greenback, falling 0.32 percent at 1.1338. Some analysts now expect a fresh round of bank funding at a European Central Bank meeting later this week that would boost the dollar.
· "With so much dovishness priced before the ECB meeting this week, Draghi will struggle to exceed market expectations and this may help the euro," said Valentin Marinov, head of G10 FX research at Credit Agricole based in London.
"It's less drag on the growth side," said Mazen Issa, senior FX strategist at TD Securities in New York. Issa cautioned a U.S.-China trade deal may not be enough to stem slowing business activities in Europe and emerging markets.
· China has set its 2019 economic growth target at 6.0 to 6.5 percent, Premier Li Keqiang said in his annual work report on Tuesday, lower than last year’s goal of around 6.5 percent.
The government has set its 2019 target for consumer price inflation at around 3 percent and its budget deficit goal at 2.8 percent of gross domestic product, Li said at the opening of China’s annual meeting of parliament.
Last year, China set a budget deficit goal of 2.6 percent and a CPI target at 3 percent.
China’s 2019 defense spending will rise 7.5 percent from 2018 to 1.19 trillion yuan ($177.49 billion), according to a budget report issued at the opening of the country’s annual meeting of parliament on Tuesday
· Japanese services sector activity expanded in February as new business grew at the fastest pace in almost six years, a business survey showed on Tuesday, a sign that domestic demand remains in good health in early2019.
The Markit/Nikkei Japan Services Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.3 in February from 51.6 in January.
· Oil prices bounced on Monday from last week's losses, boosted by reports that the United States and China could soon reach a formal agreement to end a tit-for-tat trade war that has limited global economic growth.
Crude futures gave up some of their gains around midday as the U.S. stock market slumped on weak construction spending data, but the commodity rallied into Monday's price settlement.
U.S. West Texas Intermediate crude settled 79 cents higher at $56.59 per barrel, posting a 1.4-percent gain on the day. WTI earlier rose as high as $57.
International benchmark Brent crude futures rose 60 cents at $65.67 a barrel, off a session high of $66.34.
· OPEC will probably achieve its goal of draining oversupply from the oil market by April, says Jeff Currie, global head of commodities research at Goldman Sachs.
Currie says OPEC is taking a "shock and awe" approach to cutting oil production.
OPEC needs to lay out its plans to lift the output curbs by May or June in order to prevent another price-crushing oil glut, according to Currie.
Reference: CNBC, Reuters
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