While Euro weakened mildly overnight, there was no follow through selling and it remained in tight range against dollar and yen. Eyes remain on the development in the situation in Greece. It's reported that finance minister Yanis Varoufakis would ask for a total of EUR 9.9b in short term financing during the Eurozone finance ministers meeting in Brussels on Wednesday. That includes EUR 8b in treasury bills and EUR 1.9 of profits on Greek bonds held by ECB. Another possibility is that Greek would tap part of the EUR 7b bailout loan that Athens said it would reject. Such arrangement would allow a long time for negotiation of the new contract between Greece and its creditors, possibility extending to June to August. Technically, near term focus is on 1.2161 in EUR/USD, 132.37 in EUR/JPY and 0.7403 in EUR/GBP. Decisive break of these levels could trigger broad based selloff in the common currency.
In US, Fed governor Jerome Powell said that “patience is the appropriate term” regarding the timing of the first rate hike even though recently solid job growth was "unthinkable" when he joined Fed back in 2012. He noted that inflation remained too low. In particular wages have been low and "do not suggest any tightness in the labor market yet".
Released in Asia today, China CPI dropped to a five year low of 0.8% yoy in January, much lower than expectation of 1.1% yoy. Some analysts noted that the data indicates weak domestic demand in China with no sign of improvement. PPI dropped -4.3% yoy, also lower than expectation of -3.8% yoy. There are speculations that in response to low inflation and slowdown, the Chinese central bank could have more reserve ratio cuts in the coming months.
Elsewhere, Australia NAB business confidence rose to 3 in January, house price index rose 1.9% qoq in Q4. UK BRC sales monitor rose 0.2% yoy in January. Japan tertiary industry index dropped -0.3% mom in December. Looking ahead, Swiss will release unemployment rate and CPI in European session. UK will release industrial and manufacturing productions. US will release wholesale inventories later in the day.