Yen crosses are generally higher as stock markets strengthen mildly in thin holiday trading. Nikkei opens the day higher, it is up over 80 pts at the time of writing. That rally in US stocks where DOW rose 40 pts or 0.25%, S&P 500 rose 7.04 pts, or 0.38% and NASDAQ rose 26 pts or 0.64%. While the stock markets rebounded, the extent is not strong enough to be qualified as "return of risk appetite" yet. In particular, NASDAQ is staying in a near term down trend and held below the falling 55 days EMA at 4171 and could head lower, which might in turn drag down other indices. Nikkei is also held below 15000 handle and be bounded in range.
Dollar is also mildly higher against European majors in quiet markets. A development to note is that USD/CHF breached 0.8845 minor resistance which argues that fall from 0.8952 has completed at 0.8742 already. And, the consolidation pattern from 0.8698 is possibly still in progress to extend sideway. EUR/USD is also heading back to 1.3779 minor support and break will have same implication. The dollar index also recovered ahead of 79.27 support and we might seen some more upside to 55 days EMA and above. The index is likely just in range trading between 79.27 and 80.60 and would have a downside breakout later. And we'll stay cautiously bearish in the dollar index as long as 80.60 resistance holds.
On the data front, Australian conference board leading indicator rose 0.3% in February. The calendar in European session is empty but Eurozone will release consumer confidence later in the day. US will release house price index and existing home sales. Canada will release wholesale sales.
Looking ahead, BoE minutes and RBNZ rate decisions are the main focus this week. In particular, RBNZ is expected to continue to tightening cycle and rise OCR by 25 bps to 3.00%. Regarding economic data, while the week is shortened, and the calendar isn't too heavy, there are some rather important data scheduled. That include Australia CPI, CPMI from China and Eurozone, German Ifo, US durables and UK retail sales. Here are some highlights:
- Wednesday: Australia CPI; China HSBC PMI manufacturing; Eurozone PMIs; BoE minutes; Canada retail sales; US new home sales
- Thursday: RBNZ rate decision; German Ifo; US durable goods, jobless claims
- Friday: Japan CPI; UK retail sales