After the BOJ on Friday, the Japanese yen continues to be the number one focus in the currency market at the moment. It is once again lower today with USD/JPY up 0.5% to 141.85 currently and nearing the 21 July high at 141.95. I shared some thoughts on that earlier here.
Don't forget that it is also month-end today and there could be some heavy flows coming in later in the session, especially in and around the London fix. Citi says that the month-end rebalancing this time around favours selling in the dollar, especially against the yen. But it's tough to say whether that was already done ahead of the BOJ last week.
Meanwhile, the aussie is holding slightly higher today as it is helped by a more positive reception to China stimulus news and a steadier yuan mostly. AUD/USD is up 0.4% to 0.6675 but is still caught in a tough spot after last week's plunge lower.
In other markets, equities saw a strong end to last week but some of that optimism is being moderated today. The Nasdaq closed Friday up by 1.9% but futures are down 0.3% on the day currently. S&P 500 futures are also down 0.2% so that is pointing to some light moderation ahead of Europe.
In terms of data, euro area inflation is the one to watch on the day. But it shouldn't tell us anything we don't already know from the German, French, and Spanish readings last week. That being headline annual inflation is expected to ease slightly more but core annual inflation is estimated to remain high. And if the ECB really wants to read into the latter, it could for September. But at this juncture, they're likely not to.
0600 GMT - Germany June retail sales
0600 GMT - Germany June import price index
0800 GMT - Italy Q2 preliminary GDP figures
0800 GMT - SNB total sight deposits w.e. 28 July
0830 GMT - UK June mortgage approvals, credit data
0900 GMT - Eurozone July preliminary CPI figures
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
