Asian markets open mildly firmer as Nikkei 225 is trading 50 up at the time of writing while HK HSI is up more than 1%. The forex markets are steady ahead of a event packed and holiday shortened weak. The major focus is the bunch of key data from US including PCE, ISMs and NFP. Fed chair Janet Yellen delivered rather cautious messages regarding rate hikes last Friday. She noted the an initial hike from the current near zero level would happen "sometime this year". But she would "expect the level of the federal funds rate to be normalized only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly." And Fed could pause if "readings of wage growth, core consumer prices, and other indicators of underlying inflation pressures were to weaken" or "market-based measures of inflation compensation were to fall appreciably further", or "survey-based measures were to begin to decline noticeably".
In Europe, ECB and BoE announced in a joint statement over the weekend on extending a deal under which ECB could provide BoE with euros while BoE would also provide ECB with information on UK clearing houses with significant euro-denominated business. The deal would strengthen the financial backing of British clearing houses in their handling of euro-denominated securities. UK chancellor of exchequer George Osborne noted that the step was "vital" to UK's relation with Eurozone and a "reformed EU".
On the data front, Japan industrial production dropped -3.4% mom in February versus expectation of -1.5% mom. Looking ahead, the calendar is rather busy today. Swiss KOF leading indicator, UK mortgage approvals and M43, Eurozone confidence indicators and German CPI will be featured in European session. Canada will release IPPI and RMPI. US will release personal income and spending, PCE and pending home sales.
For the week ahead, non-farm payroll from US will be released on Good Friday. Before, ISM manufacturing will be watched too Euro traders will look into CPI to be released on Tuesday. Sterling traders will look into PMI manufacturing and construction. Aussie will watch building approvals and China PMI manufacturing. Japan will also release quarterly tankan survey. Here are some highlights:
- Monday: German CPI; Swiss Kof; Canada RMPI, IPPI; US personal income and spending
- Tuesday: New Zealand business confidence; German unemployment, Eurozone CPI, unemployment; UK GBP final; Canada GDP; US Chicago PMI, consumer confidence
- Wednesday: Japan tankan; China PMI manufacturing; Australian building approvals; Eurozone PMI manufacturing final; UK PMI manufacturing; US ADP employment, ISM manufacturing
- Thursday: Australia trade balance; UK construction PMI; Canada tarde balance; US trade balance, jobless claims, factory orders
- Friday: US non-farm payroll