The forex markets are generally staying in tight range so far this week. Sterling is trying to rally against other major currencies and reached new seven year high against Euro. But there is no follow through buying against dollar. The yen is also stuck in sideway pattern and even GBP/JPY is limited by last week's high of 184.19. Nonetheless, we're noticing some weakness in Aussie and Canadian dollar. Gold breached 1200 handle but is recovery back above this level. Meanwhile, crude oil stays a bit soft and is holding below 50 level. We'd see a test on 0.7625 in AUD/USD and 1.2697 in USD/CAD later this week.
In Eurozone, after some delay Greece finally unveiled f the list of reforms that would exchange for the four months extension approved by Eurozone creditors. The main points of the proposal include creation of a fairer tax system, combating tax evasion, tackling corruption, targeting fuel and tobacco smugglers, labor reforms and housing guarantees and freed medical care. Eurozone ministers are expected to review the proposal today. Some analysts noted that the delay showed the internal struggle in the new Greek Syriza-led government to meet the creditors demand and fend off internal dissension.
In US, DJIA and S&P 500 closed mildly lower overnight as markets await Fed chair Janet Yellen's testimony later this week. Dollar index is also held within recent range below 95.48. There are speculations that Yellen could strike a hawkish tone in the testimony to Congress and Wednesday and Thursday. Some pointed out that the latest minutes were relative neutral as many committee leaned towards holding rates unchanged for a longer time. But that stellar job report in January could have altered such views. We'll keep an eye on whether dollar index would stage a break out later this week.
As for today, Japan corporate service price index rose 3.4% yoy in January. New Zealand inflation expectation dropped to 1.8% in Q1. German GDP final, Eurozone CPI final will be released in European session. US will release S&P Case Shiller 20 cities house price and consumer confidence.