Markets in Asia started the week off quietly as a result of some markets being absent in observance of public holidays. The Nikkei 225 moved above the 29,000-level following on from outperformance amongst Japanese exporters whilst USD/JPY also traded higher on the back of last week’s events. Market participants digested comments from the G7 meetings where leaders professed their unity with the ‘Build Back Better’ initiative.
In the UK, PM Johnson plans to address the nation after the government approved a four-week delay to the removal of the lockdown measures that were scheduled for the 21st of the month. Another review will be carried out in two weeks though is likely to be data dependent. This comes as the nation continues to experience a surge in variant cases despite a strong inoculation drive which has seen over 60mln receive at least one dose. Cable continued to trade rangebound last week with focus also on tension developing with Northern Ireland.
In FX, the DXY benefited from Friday’s session after the dollar reclaimed the 90 handle. Going into the week ahead, market participants look towards the FOMC meeting which could provide further forward guidance on the topic of tapering. It has been clear that the FED are waiting for more convincing data before transitioning away from the current accommodative monetary policy stance and financiers will be watching this event closely for further sentiment and rhetoric in order to outline possible paths for the future. Euro weakened last week following on from the uninspiring tone from ECB president Lagarde who steered clear of taper talk as the central bank continued to reaffirm its commitment to support the economy for as long as required. EUR/USD fell below the 1.2100 mark on the firmer greenback with more volatility to be expected within the coming days.
Commodities & WTI Crude
In the commodity space, Gold dived lower as demand for the greenback strengthened. The precious metal shed just under 1% and has now broken below the last two weekly lows at the time of writing. Crude markets were lifted by the optimistic risk tone as WTI broke above the $71 level for the first time since October 2018.
Here is a breakdown of the high impact data releases this week.
13:15 BOE Gov Bailey Speaks. Markets to watch: GBP Crosses
13:30 PPI m/m, Core Retail Sales & Retail Sales m/m. Markets to watch: USD Crosses
13:30 CPI m/m. Markets to watch: CAD Crosses
19:00 FOMC Economic Projections, FOMC Statement & FOMC Press Conference. Markets to watch: USD Crosses
23:30 BOC Gov Macklem Speaks. Markets to watch: CAD Crosses
23:45 GDP q/q. Markets to watch: NZD Crosses
01:10 RBA Gov Lowe Speaks. Markets to watch: AUD Crosses
02:30 Employment Change & Unemployment Rate. Markets to watch: AUD Crosses
08:30 SNB Monetary Policy Assessment. Markets to watch: CHF Crosses
09:00 SNB Press Conference. Markets to watch: CHF Crosses
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