Slow Monday Schedule Offers Little In The Way Of Data

From a calendar perspective, the global financial markets will be off to a slow start this week, with only a few important data releases scheduled.

Action begins at 08:00 GMT with a report on Swiss consumer inflation. Switzerland’s consumer price index (CPI) is forecast to fall 0.2% in January following a flat-line reading the month before. In annualized terms, this translates into a gain of 0.8%.

Portugal will also release its January CPI report on Monday, with the official data set scheduled for 11:00 GMT.

In North America, the only major data release on the economic calendar is the US Monthly Budget Statement for January. The report is expected to show a budget surplus of $108.8 billion, following a deficit of 23 billion in December.

The calendar of events picks up later in the week with key reports on US inflation and Eurozone gross domestic product (GDP). In the meantime, investors can use the lack of fundamental drivers to reflect on recent turmoil in global equities.

In currencies, the US dollar has managed to recover sharply from multi-year lows, as investors continue to bet on an imminent rate hike by the Federal Reserve. The Federal Open Market Committee (FOMC) will hold its next policy meeting in March. The official rate statement will be accompanied by a revised summary of economic projections covering GDP, unemployment and inflation.

The US dollar index (DXY) was down at the start of Monday trading, falling 0.2% to 90.22. After last week’s gains, DXY trimmed its year-to-date loss down to 2%.

EUR/USD

Europe’s common currency experienced a broad pullback last week, dragging prices back toward the 1.2200 handle. The EUR/USD bounced back on Monday, gaining 0.2% to 1.2276. However, the pair is down roughly 150 pips from last week’s highs north of 1.2400. Furthermore, it is down more than 200 pips from the 1 February high above 1.2500. The pair remains in a general uptrend, but appears to have established a new trading range between 1.2100 and 1.2600.

GBP/USD

Cable fell to nearly four-week lows on Friday, as the dollar rebounded sharply against a basket of world peers. The GBP/USD exchange rate briefly fell below 1.3800 but has since clawed back above those levels. It was last seen trading at 1.3836.

USD/JPY

For all its gains against other currencies, the dollar fell to fresh five-month lows against the yen last week week as prices touched 1.0800 for the first time since September. The yen is clearly benefiting from risk-off sentiment following one of the worst weeks in equities since the financial crisis. The USD/JPY was last seen trading at 108.68, where it was down 0.1% from the previous close.