TheChek News Flow

Asian equity markets are tracking the optimism on Wall St on Friday, where a robust NFP print was solid enough to confirm healthy labor market and solidify expectations of a Fed hike this week but not too great that would magnify the case for more than 3 hikes this year. In FX, USD/JPY has retreated in line with US Treasury yields after NFP did not produce the blowout seen in the AFP report earlier. EUR/USD however has maintained its momentum toward 1-month high of 1.07 in the wake of more hawkish ECB sentiment last week. GBP traded with a softer tone after press reports that PM May could trigger Article 50 as soon as Tues, March 14th, but also that UK is drawing up contingency plans for the unlikely event it has to walk away from talks with the European Union without a deal.

Nikkei +0.15% Hang Seng +1.13% CSI +0.81% Shanghai +0.67%

Eur$ 1.0704 CNH 6.8928 CNY 6.9063 JPY 114.61 GBP 1.2212 CHF 1.0069 RUB 59.1750 WTI$ 48.28 -0.43%

S&P -0.02% EuroStoxx -0.12% Dax +0.02% FTSE +0.03% SMI +0.20%

*Accell Raised to Add at Bank Degroof Petercam, PT EU27

The euro was up 0.2 percent at $1.0699 EUR=, after rising as high as $1.0701, its highest level since Feb. 9.

Some members of the ECB's Governing Council discussed the possibility of higher interest rates at last week's policy meeting, but talk on the issue was brief and did not receive broad support, said two sources familiar with the discussion.

The euro's gains were limited by expectations that the U.S. Federal Reserve would decide to raise interest rates at its two-day policy meeting ending on Wednesday, after U.S. employers hired workers at a robust pace in February.

The headline figure surpassed expectations and wages also rose, though by less than some economists expected. Overall, the non-farm payrolls report reinforced market expectations that the Fed will hike interest rates this week despite slowing economic growth.

Wage growth rose 0.2 percent, falling short of an expected 0.3 percent increase, which caused U.S. Treasury yields to recede from last week's 12-week highs.

The benchmark 10-year U.S. yield US10YT=RR was last at 2.580 percent in Asian trading, compared to its U.S. close on Friday of 2.582 percent. It was well below Friday's high of 2.624 percent, which was its highest since December.

Fed fund futures prices showed investors pricing in more than a 90 percent chance of an increase in U.S. overnight interest rates, according to CME Group's FedWatch tool.

With a rate increase so broadly priced in to market expectations, investors have moved on to the next question of whether the Fed will be able to sustain its pace of hikes and also increase rates in its June and September meetings.

"Everyone wants to see the economic projections of FOMC members, to gauge whether they will indeed stick to a path of raising interest rates in both June and September," said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

A Reuters poll of 23 primary dealers showed a dozen of them expected the Fed to raise rates to 1.00 to 1.25 percent by its June meeting, while 10 of them expected a rate increase by its September meeting.

As market participants ponder the outlook for future monetary policy moves, day-to-day trading this year has vexed some investors.

"It's hard to pick one specific theme in a market like this," said Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo.

"It's hard to find trends, so I think people are mostly just playing ranges, technicals and momentum," he said.

The dollar edged down 0.2 percent against its Japanese counterpart to 114.66 yen JPY=, below Friday's high of 115.50 yen, which was the highest since Jan. 19.

Speculators had boosted bullish bets on the U.S. dollar in the week through March 7, lifting net longs to their highest level since early February, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. [IMM/FX]

The dollar index, which tracks the U.S. currency against a basket of six major rivals, slipped 0.1 percent to 101.13 .DXY, its lowest since Feb. 28.

Sterling added 0.2 percent to $1.2189 GBP=, moving away from last week's eight-week lows.

The pound lost almost 1 percent against the euro on Friday after the ECB news. The single currency was last up 0.1 percent at 87.83 pence EURGBP=D3 after rising as high as 87.86 pence, its loftiest peak since Jan. 17.

US dual national and Iranian connected to art world and foreign diplomats

An Iranian and a US-Iranian dual national were sentenced to death in Iran on Sunday on charges of founding a “cult” and promoting moral corruption.

The defendants, who have not been named, are believed to be a couple involved in the art industry who were arrested in July last year. They ran a leading art gallery in Tehran, the Iranian capital, and were known to associate with foreign diplomats.

Iran has arrested several Iranians holding dual nationality in recent months in a move analysts suggest is intended to intimidate those associated with foreign businesses or who have social connections with foreigners.

Abbas Jafari Dolatabadi, Tehran prosecutor-general, said on Sunday that the man and woman had been sentenced because they established “a new cult” and made “alcoholic beverages, encouraged vice . . . through throwing mixed parties [and] . . . exhibiting and selling obscene images at gallery”.

He said the man was a US-Iranian dual national who owned a large home in an affluent neighbourhood in Tehran where he kept 4,000 litres of alcohol, which is illegal in Iran.

Two reformist Iranian journalists have also been arrested in recent days. Hengameh Shahidi, who is also a human-rights activist, was arrested on Thursday.

Ms Shahidi had previously spent two years in prison for protesting against alleged fraud in the 2009 presidential elections. Ehsan Mazandarani was arrested on Sunday. He had been released from prison earlier this year after being in jailed in November 2015 on charges of acting against national security.

Pro-reform politicians have speculated that the latest crackdown is linked to May’s presidential election, when Hassan Rouhani, Iran’s centrist leader, will seek re-election. Hardliners in Iran commonly resort to politically motivated arrests to discourage reformists before the polls, they say.

A handwritten letter by Ms Shahidi was released on social media on Sunday in which she claimed she had received warning of her imminent arrest. “I see no reason for my arrest . . . unless it is a pre-election plan for broad arrests of political activists and journalists,” she wrote.