The Japanese yen surges broadly in Asian session, in particular with USD/JPY moving up 103.90 support. The greenback is pressured against other major currencies today as the post NFP selloff continues. The much weaker than expected NFP report triggered speculations that Fed could slow down the pace of tapering of asset purchase. Before the NFP report, markets are expecting Fed to dial back monthly purchase by USD 10b at every FOMC meeting and end the program by the end of the year. Two Fed hawks, St. Louis Fed Bullard and Richmond Fed Lacker, have already tried to talk down the significance of the NFP disappointment over the week. And a major focus this week is how others would respond to the question. The Fedspeaks to watch include Philadelphia Fed Plosser and Dallas Fed Fisher on Tuesday, Chicago Fed Evans on Wednesday and San Francisco Fed Williams and Fed chairman Bernanke on Thursdays.
Talking about Fed, US president Obama said he will nominate former Bank of Israel head Stanley Fischer to replace Janet Yellen as Fed's vice chairman. Fisher was also the chief economist as the World Bank and deputy managing director of IMF. Yellen was already confirmed to lead Fed when Bernanke steps down at the end of this month. Lael Brainard will be nominated as Fed governor and she served as undersecretary for international affairs at treasury during Obama's first term. Jerome Powell is also renominated for a second term. Economists generally expected the three new officials, to be confirmed by Senate, would support Yellen's approach. That is, keeping monetary policy lose to fight unemployment and boost growth.
On the data front, the economic calendar is rather light today. Australia home loans rose 1.1% in November, inline with expectations. BoC will release business outlook survey later today while Fed will release monthly budget statement. Looking ahead, here are some of the key events to watch:
- Tuesday: UK CPI, PPI; Eurozone industrial production; US retail sales
- Wednesday: Swiss retail sales; Eurozone trade balance; US PPI; empire statement manufacturing; Fed's Beige Book
- Thursday: Australia employment; ECB monthly bulletin, CPI; US CPI, jobless claims; TIC capital flow, Philly Fed survey, NAHB housing market index
- Friday: Swiss PPI; UK retail sales; US new residential construction, industrial production, U of Michigan sentiment