The forex markets are generally steady as the week starts with mild weakness in dollar and yen. Asian equities were broadly higher as China stocks hit seven year high. But Nikkei closed slightly lower by -36.7 pts at 19983, below 20000 handle. European indices also opened mixed. Gold recovered some of last week's sharp losses but there is no clear momentum for a challenge on 1200 handle again yet. Crude oil is also mildly lower and is back pressing 57 handle. Overall, the markets lack clear theme today and we'd probably see dollar extends last week's fall.
ECB governing council member Erkki Liikanen said over the weekend that if interest rates remained very low for a long time, there is a "risk" of asset buddles. And he urged the ECB to pay attention to it and set regulatory and supervisory rules to avoid such risks. According to a Bloomberg survey, more than two-thirds of economists respondents expected ECB will continue the quantitative easing program through September 2016 as planned. Most expected ECB won't taper the monthly purchase while some said the central bank will wind down the program gradually with end-date ranging from end of 2016 to end 2017.
In Japan, Prime Minister Shinzo Abe's adviser Kozo Yamamoto said that he's "worried the BoJ's attitude is wavering" and BoJ governor Haruhiko Kuroda is being affected by "a den of conspirators". Yamamoto urged Kuroda to "show that he will do whatever it takes to get the economy out of deflation in attitude and in deeds". And he complained that Kuroda was too "optimistic in words" when he said prices remained on track for 2% target.
On the data front, German import price rose 1.0% mom in March. US CBI trends total orders will be released in an otherwise empty economic calendar. Looking ahead, data from UK and US will catch most attention, in particular GDP and manufacturing PMI. Eurozone inflation will also be watched. Three central banks will meet including Fed, RBNZ and BoJ. Here are some highlights:
- Tuesday: UK GDP, BBA mortgage approvals; US consumer confidence, S&P Case Shiller house price
- Wednesday: New Zealand trade balance; Swiss UBS consumption indicator; German CPI; Canada IPPI, RMPI; US GDP, FOMC
- Thursday: RBNZ; UK Gfk consumer confidence; BoJ; Swiss KoF; German unemployment, Eurozone CPI; Canada GDP, personal income and spending, Chicago PMI
- Friday: China PMIs; Australia PPI; UK PMI manufacturing; US ISM manufacturing