Solid risk appetite remained the main theme in the financial markets. The S&P 500 made the fourth straight record closing at 1951.27 while the Dow 30 made its third at 16943.1. Asian equities generally followed with the MSCI AP ex Japan index hitting the highest level since July 2011. Nonetheless, Nikkei faced strong resistance above 15000 handle as it dropped -0.7% to 15012.41. The currency markets are relatively steady though. The Dollar Index recovered overnight but struggles to gather further momentum above 80.6 and it's staying in its near term range. European majors weakened mildly as the week started by are staying in right range above last week's low. The Yen extended the post GDP recovery but it's rally is being limited by risk appetite.
In US, St Louis Fed President James Bullard was bullish about the US recovery path bullish and noted that the macro-economy us much closer to normal. As he told audience at a conference in Florida, "if you get 3% growth for the rest of this year, if you get unemployment coming down below 6%, if you continue to have jobs growth at 200,000, if you continue to see inflation moving back up toward target, I think if we get to the fall of the year and all of those things are transpiring as I'm suggesting they will, that will change the conversation about monetary policy, and there will be more sentiment toward an earlier rate hike". On the other hand, Boston Fed President Eric Rosengren appeared more cautious, indicating that "history shows that monetary policy 'exits' can be unsettled" and the Fed should not hike short-term interest rates until the economy is "within one year" of reaching the Fed's 2 goals of full employment and 2% annual inflation. While both are non-voters, their comments unveiled that the US' recovery outlook remained uncertain.
Released in Asia, China CPI accelerated to 2.5% yoy in May versus expectation of 2.4% yoy. PPI improved to -1.4% yoy versus expectation of -1.5% yoy. Australian home loans was flat 0% in April versus expectation of 0.2%, NAB business confidence was unchanged at 7 in May. Japan tertiary industry index dropped -5.4% mom in April. UK BRC sales monitor rose 0.5% yoy in May.
UK data will be a main focus today with industrial and manufacturing production featured. Swiss will release retail sales. US will release wholesale inventories.