US equities recovered mildly overnight to digest this week's sharp losses but treasury yields and yen crosses continued to head lower. The Japanese yen stays strong in Asian session as supported by another day of selloff in Nikkei, which is down over -200 pts, or -1.4% at the time of writing. The dollar also stays generally weak against other major currencies. An important technical development to note is the break of 79.79 support in the dollar index which now argues that the rebound from 79.27 has completed at 80.60 already. That invalidated our bullish view on the index and suggests that the pattern from 81.48 is still in progress. Outlook is turned mildly bearish for 79.27 support ahead. And that could push EUR/USD through 1.3820 resistance for another take on recent resistance of 1.3966. The GBP/USD has already broken corresponding resistance of 1.6683 already. Meanwhile, the greenback is extending recent losses against Aussie and Loonie too.
In US, Minneapolis Fed Kocherlakota urged Fed to have "more of a collective vision" and "communicate as a group" about the conditions for raising rates. He also noted that "below-target inflation signals a significant problem in our economy," and it indicated wastage in resources. And it's a signal of Fed's underperformance to its maximum employment objective too. But, he still expected inflation to return to 2%, "probably on the order of four years." Philadelphia Fed Plosser also said Fed should "refine" the language of forward guidance. Meanwhile, he said that more asset purchase would not help the inflation problem. But he's "not terribly concerned" in the short run as inflation expectations remain well-anchored and he's confident it will return to the 2% target over time.
Focus today is the FOMC minutes for March 18-19 meeting. Watch for discussion and whether there were consensus among policymakers on the timing of rate hike. Fed chair talked about the time frame of six months after QE ends, and it would be interesting to know how others thought. Otherwise, the minutes might not reveal much new information.
Elsewhere, Australia Westpac consumer sentiment rose 0.3% in April, home loans rose 2.3% mom in February. UK BRC shop price dropped -1.7% yoy in March. Germany and UK will release February trade balance in European session. US will release wholesale inventories.