Yen Lower On Risk Appetite, Busy Calendar Ahead

Yen weakness remains the main theme is otherwise ranging markets. Asian equities are broadly higher following rebound in US stocks overnight. Citigroup, the 3rd largest US bank, reported profit from trading and lending in 3Q12. This lifted shares in the banking sector and boosted expectations of Goldman Sachs' results due today. In addition, sentiment was helped by comments from New York Fed Dudley and German Chancellor Merkel.

Meanwhile, New Zealand dollar was mildly softer after weaker than expected inflation reading. Nonetheless, most major pairs and crosses are stuck in familiar range. The markets will look into today's long list of economic data from inspirations.

Dudley reaffirmed that the Fed's policy stance will continue even as the economy recovers. Dudley said the 2013 outlook for the US would remain "somewhat cloudy." He also stressed that "if we were to see some good news on growth I would not expect us to respond in a hasty manner…Only as we became confident that the recovery was securely established would I expect our monetary policy stance to evolve to ensure that it remained appropriate to achievement of our objective: maximum sustainable employment in the context of price stability." Meanwhile, St. Louis Fed President Bullard was more optimistic over the growth outlook, saying that the GDP would expand by +3.5% next year and the Fed's current policy should not be regarded as "QE Infinity."

In the eurozone, Merkel emphasized that she wants Greece to stay in the eurozone. She said that leaders are working to avert "uncontrolled developments in the eurozone" that include a Greece exit. The comment is seen as a change in tone towards the Greece issues and markets see that as a sign she'll grant Greece the two year extension on reforms. As the next tranche of funding to Greece will be concluded soon, Prime Minister Antonis Samaras stated that he's confident that "Greece will soon get the next tranche. Its economy needs liquidity like a desert needs rain."

Spain. Mexico's President-elect Enrique Peña Nieto stated after meeting Spanish Prime Minister Rajoy that Spain was "confident" that he would secure an appropriate aid deal. Some analysts also anticipate the debt-ridden country would make formal request as soon as next week.

New Zealand CPI rose 0.3% qoq, 0.8% yoy in Q3, comparing to consensus of 0.5% qoq, 1.0% yoy. The 0.8% yoy reading was indeed the lowest since 1999. The tamer than expected inflation reading triggered some talks of more rate cut from RBNZ ahead. RBNZ lowered the OCR to 2.5% back in March 2011 and signed that there will be no change until late 2013. But markets are pricing in more than 100% chance of another 25bps cut this year.

Looking ahead, the economic calendar is very busy today. CPI and PPI inflation data will be released from UK. German ZEW and Eurozone CPI will also be featured. From US, CPI, TIC capital flow, industrial production and NAHB housing market index will be released.