US equities staged a strong rebound overnight, in particular, with NASDAQ closing at new record high of 5106.56, up 73.84 pts, or 1.47%. DJIA also closed up 121.45 pts, or 0.67% at 18162.99 after drawing strong support from 55 days EMA. Similar picture was seen in S&P 500 which closed at 2123.48, up 19.28 pts or 0.92%. There were talks that the rally in stocks were driven by optimism of a Greek deal soon. However, European Commission vice president Valdis Dombrovskis cautioned that they are "working very intensively to ensure a staff-level agreement" but "we are still not there yet". Reuters also quoted an unnamed Eurozone official saying that rumors of Greece close to a deal with international creditors was "nonsense".
Dollar index reached as high as 97.88 before losing some momentum and retreated. The greenback remains the strongest major currencies this week. In particular, USD/JPY took out key resistance level at 124.13, which was a seven year high. Overall, the greenback is expected to target a test on recent high against Euro, Aussie and Canadian. That is, 1.0461 low in EUR/USD, 0.7532 low in AUD/USD, and 1.2834 in USD/CAD. Sterling, on the other hand, stays resilient as supported by cross buying.
On the data front, Japan retail sales rose 5.0% yoy in April, missed expectation of 5.9% yoy. UK GDP revision will be a focus in European session. US will release BBA mortgage approvals too. Swiss will release trade balance while Eurozone will release confidence indicators. In US session, initial jobless claims are expected to drop slightly to 272k in the week ended May 23. US will also release pending home sales. Canada will release IPPI and RMPI.