Risk appetite is dominating the markets as the week starts as S&P 500 jumped to new intraday record high of 1858.71 overnight before closing at 1847.61, just a point before prior record close. Asia equities followed and, in particular, with Nikkei trading back above 15000 handle, up nearly 220 pts at the time of writing. The currency markets are relatively quiet though. Major pairs and crosses are stuck in prior week's range so far. Aussie is lifted mildly by risk appetite, but is staying below 0.9080 near term resistance so far. The yen also weakened mildly following the strength in Nikkei but is staying in consolidation too.
On the data front, Japan CSPI rose 0.8% yoy in January versus expectation of 1.2% yoy. China conference board leading indicator improved to 1.2 in January. Looking ahead, EU economic forecasts will be a major focus today. Germany will release Q4 GDP final. UK will release BBA mortgage approvals, CBI realized sales. US will release housing price index, S&P Case-Shiller 20 cities house price and consumer confidence.
Treasury yields continued to stay in consolidation after making short term bottoms earlier this month. 10 year yield's recovery from 2.579 is having corrective structure Also, it struggled to take out 55 days EMA. We'd expect another decline in TNX soon through 2.579. Fall from 3.036 is likely correcting the whole move from 1.394. 2.471 support is expected to be violated in the next fall. Such development would likely be accompanied by USD/JPY's break of 100 psychological level.
Dollar index continued to stay in range of 76.68/81.48 as consolidations continued around a flat 55 days EMA. Near term outlook stays neutral and we'd expect some more sideway trading in near term. On the upside, break of 81.48 will confirm rebound from 79.0 has resumed. Secondly it will confirm that fall from 84.75 has completed at 79.00 ahead of the key long term support cluster around there. And that should bring stronger rally to retest 84.75 ahead. Though, break of 79.68 will turn focus back to key cluster support level at around 79, which is important to determine if the up trend from 72.69 (2011 low) has reversed.
