The Yen surged overnight on risk aversion as markets were concerned with geopolitical tensions in Ukraine and the Gaza. The news that a Malaysian airline plane was shot down over eastern Ukraine sent the Dow down -161.39 pts, or -0.94% to close at 16976.81, back below 17000 handle. Asian equities followed and opened lower today but the yen pared back some of the gains. Dollar stayed firm against European majors as commodity currencies. In other markets, Gold rebounded strongly from below 1300 and breached 1320, now trading at 1313. Crude Oil also jumped from around 99 level and is now challenging 104.
In US, St. Louis Fed Bullard said that the "normalization process" may need to start "sooner rather than later" if macroeconomic conditions continue to improve at the current pace. He is expecting a "bounce-back" in Q2 and the economy is on track for 3% growth or better in the second half of the year. Dallas Fed Fisher said earlier this week that he's "more confident" then other FOMC members that the economy is improving. And Fed would likely raise interest rate in early 2015.
Canadian inflation data will be the main focus of today. Headline CPI is expected to rise to 2.4% yoy in June while core CPI is expected to be unchanged at 1.7% yoy. Canada will also release wholesale sales. US will release U of Michigan sentiment and leading indicators. Earlier, Eurozone will release current account in European session.