Dollar and euro are set to be the weakest major currencies in June. Euro will first face the test from inflation data again while dollar will face tests from ISM indices and employment data later in the week. Eurozone CPI is expected to rise from 0.5% yoy to 0.6% yoy in June. Core CPI is expected to be unchanged at 0.7% yoy. Eurozone will also release M3 money supply. ECB launched a package of stimulus measures earlier this month. However, persistently low inflation reading could force ECB into quantitative easing later this year. Meanwhile, ECB executive board member Mersch said over the week end that there is "no enhanced or acute deflationary threat". He noted that what the central saw was a "longer period of very low inflation" only.
In UK, BoE deputy governor Bean said yesterday that the long term interest rates "would go back to 5%" but "it's probably quite a long way down the road". He noted that a "variety of big forces" are acting on the economy, including heavily indebted households, consolidating government debts, weak export partner in Europe, strength of sterling, as well as changes to the financial system. Thus, increases in interest rates would be "at a gradual pace". Mortgage approvals and M4 money supply will be released today.
From New Zealand, building permits dropped -4.6% mom in May while NBNZ business confidence dropped to 42.8 in June. NZD/USD dollar was hammered down by the weak data. From Japan, industrial production rose 0.5% mom in May while housing starts dropped -15% yoy. Looking ahead in US session, Chicago PMI and pending home sales will be released but focus will be on the heavy weight data later in the week. Canada will release April GDP.