'The relative stability in core measures suggests that underlying inflation could be basing, but that level of excess supply remain important preventing an increase in inflationary pressures.' - Charles St-Arnaud, Nomura International Plc

Canadian consumer prices advanced more than expected in January, official figures revealed on Friday. Statistics Canada reported its headline Consumer Price Index surged 2.1% year-over-year, after rising just 1.5% in December. On a monthly basis, the index jumped 0.9% in January, following the preceding month's 0.2% fall and surpassing analysts' expectations for a 0.3% rise. In terms of annual inflation, gasoline prices contributed most, climbing 20.6% on a yearly basis in January, the strongest rate since September 2011. In addition, higher energy prices forced transport costs to grow at an annualised pace of 6.3%, while food prices posted a decline of 2.1% compared with a 1.3% drop registered in 2015, though still managing to advance 0.6% month-on-month in January. In the meantime, shelter and goods prices ticked 2.4% and 2.0% higher over the year, whilst services-industry prices edged up 2.3%.

Nevertheless, further increase in inflation is set to rule out any short-term monetary easing by the BoC amid raising uncertainty related to both the US and domestic economic outlooks.

Sunrise Market Commentary

• Rates: Red alert in German and US 10-yr yield
  The German and US 10-yr yields reached key support levels around 0.17% and 2.3% respectively. From a technical point of view, these levels are necklines of a triple top formation. US President Trump's speech on Tuesday night will need to fiscally dovish to prevent a break lower in the US. In Germany, collateral scarcity might be interfering with reality.
• Currencies: Dollar mixed ahead of Trump. USD/JPY nearing key support
  On Friday, USD traders received mixed signals from other markets. USD/JPY is drifting toward the range bottom as markets await clear signal from Trump on fiscal policy. EUR/GBP rebounded again north of the 0.8450 reference. Sterling (Cable and EUR/GBP) still shows no clear trend.

The Sunrise Headlines

• US equities erased losses thanks to a last hour surge which left the three main indices with marginal gains and new all-time closing highs (S&P/Dow). Asian equities trade modestly down with Japan underperforming (-0.9%).
• US Treasury Secretary Mnuchin said Trump's upcoming budget won't touch entitlements, and will focus on ways to produce LT growth by reducing taxes. The tax-reform plan and regulatory relief will lead to a sharp increase in GDP.
• Moody's confirmed Germany's Aaa rating (stable). DBRS confirmed the Irish rating at A (high, stable trend) and the Belgian rating at AA (high, stable trend). S&P affirmed Hungary's BBB- rating (stable) after a Sept.16 upgrade.
• Fitch confirmed Greece's rating at CCC. The government's compliance with the ESM programme conditions is one reason why Fitch believes Greece's European creditors would be prepared to proceed and disburse funds without IMF involvement. Another reason is the desire to avoid a Greek political crisis during an already congested European election year
• Two polls gave Macron 25% support of the French electorate in the first round of the presidential election, 2%-points behind Le Pen and 5%-points more than Fillon. Both surveys show Le Pen losing to either man in the second round.
• Sterling fell against all its major peers this morning after a report said UK Prime Minister May's team was preparing for Scotland to potentially call for an independence referendum in March.
• Today, US durables and EMU confidence data are the main eco releases, together with an Italian BTP auction. Further out this week, Trump's speech on Tuesday night and Yellen's speech on Friday are the focal points for trading

Currencies: Dollar Mixed Ahead Of Trump. USD/JPY Nearing Key Support

Dollar soft ahead of Trump testimony

On Friday, European markets shifted to risk-off modus. Soft comments of US Treasury Secretary Mnuchin on Thursday caused investor caution ahead of Trumps declaration on Tuesday night. European equities and core bond yields declined. The dollar traded also with a slightly negative bias, but the losses were modest. Equities rebounded in the US, but dollar regained hardly any ground. Especially USD/JPY didn't profited, probably as US bond yields held near the ST lows. USD/JPY ended the day at 112.13 (from 112.61). EUR/USD finished at 1.0563 (from 1.0582).

Overnight, Asian equities don't join the rebound in the US on Friday, but the losses are contained. Investors stay in wait-and-see modus ahead of key speech of US president Donald Trump and Fed's chairwoman Yellen later this week. The yen is holding near its short-term highs. USD/JPY is changing hands in the low 112 area, with the 111.60 range bottom within reach. EUR/JPY hovers just north of the correction low (118.25 area). EUR/USD shows no clear trend and is changing hands in the 1.0565 area.

Today, the EMU economic confidence (EC) is expected to rise for a sixth straight month (108.1 from 107.9). January US durable orders might rebound strongly, but it should be largely due to very strong (but volatile) aircraft orders. Core orders excluding transportation are expected up 0.5% M/M. They improved steadily in H2 of 2016, but can they maintain that pace? The impact on USD trading should be of intraday relevance, at best. Early last week, French election worries weighed on the euro, but these eased mid week. Even so, they were the clear driver for USD trading as other markets showed a diffuse, incoherent picture. Core bond yields continue to decline, despite strong eco data. The global equity rally slowed, but US equities are holding at record highs. For EUR/USD, euro softness prevails even as uncertainty on Europe eased last week. The focus of global investors now turns to the speech of US president Trump (Tuesday) and of Fed's Yellen ( late on Friday). We start the week with a neutral bias on EUR/USD. We expect USD/JPY to hold north of the 111.60 range bottom ahead of Trump's speech. However, the US president has to deliver on fiscal stimulus to support the dollar.

Global context. The dollar corrected lower since the start of January as the Trump reflation trade slowed down. Two weeks ago, the dollar bottomed out, supported by Trump's tax promise. However, underlying euro weakness due to political uncertainty in the area is a factor too. We see 1.0874 as solid resistance and favour a sell EUR/USD on upticks approach. The downside test of USD/JPY was rejected. USD/JPY 111.60/111.16 (Range bottom/38% retracement of the 99.02/118.66 rally) remains a key support. The comments of Yellen before Congress (and of other Fed members) were USD supportive, but had no lasting impact on yields. We keep a USD positive bias longer term, but remain more cautious on the upside potential of USD/JPY compared to USD/EUR.

EUR/USD looking for clear guidance as markets await Trump and Yellen.

EUR/GBP

EUR/GBP and cable don't find a clear trend

Friday's risk-off correction was slightly negative for sterling. However, both EUR/GBP and cable held in well-known territory. UK loans for home purchases unexpectedly recovered further (44657 vs 42600 expected), but were ignored as was the case for the Brexit-story. In the afternoon, EUR/USD slightly outperformed cable, providing a cautious support for EUR/GBP. The pair finished at 0.8477 (from 0.8427). Cable finished the session at 1.2462 (from 1.2556).

During the weekend, The Times reported that the UK was preparing for a new Scottish independence vote which might coincide with the triggering of Article 50. Sterling trades slightly softer in Asia this morning. There are no important eco data in the UK today. The House of Lords starts a detailed review of the Article 50 bill. Markets will keep an eye on any headwinds for the PM May's Brexit strategy. For now, we assume that the impact on sterling should be limited. Earlier last week, the (temporary) acceleration of the euro sell-off pushed EUR/GBP to the 0.84 area. However, a sustained break lower didn't occur. As is the case for EUR/USD (and for several other markets), there is currently no clear driver for sterling trading. Longer term, we have a sterling negative view, as the Brexit will negatively impact the UK economy. However, this is no issue at this stage. A sustained break below 0.8450 opens the way for a return to the 0.8304 correction low. We maintain a neutral bias on sterling short-term.

EUR/GBP: attack of the 0.8450 support continue. NO sustained break yet.

Download entire Sunrise Market Commentary

Australia Q4 corporate profits rise as wages fall

Asia Mid-Session Market Update: Australia Q4 corporate profits rise as wages fall; GBP slides on speculation of another Scotland referendum

Friday US markets on close: Dow +0.1%, S&P500 +0.2%, Nasdaq +0.2%

Best Sector in S&P500: Utilities

Worst Sector in S&P500: Energy

Biggest gainers: FL +9.4%; INTU +6.1%; JWN +5.7%

Biggest losers: SWN -12.0%; HPE -6.9%; RRC -4.5%

At the close: VIX 11.5 (-0.2pts); Treasuries: 2-yr 1.16% (+2bps), 10-yr 2.32% (-7bps), 30-yr 2.96% (-7bps)

Weekend US/EU Corporate Headlines

BRK.A: Reports Q4 Operating EPS (Class A) $2,665 v $2,843 y/y

KATE: Michael Kors and Coach said to be among the suitors to reach second round of bidding for Kate Spade - press

Politics

(UK) UK govt said to be preparing for the new independence vote by Scotland - UK press

(US) Treasury Sec Mnuchin: Pres Trump's first budget will not include any cuts to social welfare programs such as Social Security and Medicare - press

(US) Former Labor Secretary under President Obama, Tom Perez, elected as the new chairman of Democratic Party - press

(US) President Trump nominee for Navy Sec, Philip Bilden, said to withdraw his own nomination - financial press

Key economic data:

(AU) AUSTRALIA Q4 COMPANY OPERATING PROFIT Q/Q: 20.1% (multi-year high) V 8.9%E; INVENTORIES Q/Q: 0.3% V 0.5%E

(NZ) New Zealand Jan Net Migration: 6.5K (record high) v 6.0K prior

Asia Session Notable Observations, Speakers and Press

Asia equities down slightly again as divergence from modest increases in US indices continues; Nikkei225 the biggest decliner on stronger JPY.

USD was under added pressure on Friday while yields on the longer-end of the curve come in more notably; GBP also falls by as much as 80pips on UK press report that Scotland is preparing to call for another referendum when PM May triggers article 50 next month. AUD briefly rises after Q4 corporate profits data.

Australia's corporate profits hit multi-year high as inventories growth comes in below ests; Expectations for higher GDP tempered by decline in the Wages component.

Ahead of US President Trump's address in front of Congress on Tuesday, Treasury Sec Mnuchin says the cabinet will not call for social spending program cuts but will seek sharp increase in defense funding.

China

(CN) China Securities Regulatory Commission (CSRC) chairman Liu Shiyu: Since capital market recovery from 2015 slump has been stronger than expected, China is ready for larger supply of IPOs - press

(CN) China National People's Congress (NPC) leaves corporate tax rate unchanged at 25% - SCMP

(CN) Chinese press citing researchers from State Information Center (SIO) forecast Q1 GDP at 6.6%

(CN) China said to ramp up its naval defense budget due to uncertainty about Trump's plans for South China Sea - press

Japan

(JP) Nearly 60% of poll respondents in Japan had a favorable view of PM Abe's meeting with US Pres Trump - Nikkei

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.7%, Hang Seng +0.1%, Shanghai Composite -0.3%, ASX200 -0.3%, Kospi -0.3%

Equity Futures: S&P500 +0.2%; Nasdaq +0.1%, Dax +0.1%, FTSE100 +0.2%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0550-1.0575; JPY 111.90-112.30; AUD 0.7660-0.7710; NZD 0.7185-0.7210; GBP 1.2390-1.2470

Apr Gold -0.1% at 1,257/oz; Apr Crude Oil +0.6% at $54.31/brl; May Copper -0.3% at $2.69/lb

(IR) Iran Navy Rear Admiral Habibollah Sayyari announces annual exercises to be held in the Strait of Hormuz - press

(CN) PBOC SETS YUAN MID POINT AT 6.8814 V 6.8655 PRIOR

(CN) PBOC to inject combined CNY30B v CNY30B prior in 7-day, 14-day and 28-day reverse repos

(KR) South Korea sells 20-yr bonds; avg yield 2.215% v 2.195% prior

Asia equities / Notables / movers

Australia

QBE Insurance QBE.au +2.9% (FY16 result)

Lend Lease LLC.AU +3.9% (FY16 result)

Austal ASB.AU -2.6% (H1 result)

MacMahon MAH.AU -3.3% (H1 result)

Japara JHC.AU -6.2% (H1 result)

Hong Kong

Fortunet 1039.HK -3.4% (profit warning)

Boer Power 1685.HK -4.6% (profit warning)

BYD Electric 1211.HK +3.4% (FY16 result)

Futures Land Development 1030.HK -7.1% (FY16 result)

On the 4h chart of NZDUSD we can see a nice eight wave cycle in play, with price specifically trading in the second phase of this cycle. If we are on the right track then current upward activity is part of the final leg C, that is trading in final stages. That said we believe upside may be limited in the near-term around the 50.0 or 61.8 Fibonacci ratio, as this three wave A-B-C move is regarded as a temporary correction. As such bearish movement may follow in the next few trading days.

NZDUSD, 4H

Market movers today

In the US, capital goods orders data for January is due out. These figures will give us a first impression of whether investments continue to gain momentum as seen during the second half of 2016.

In the euro area, we face a week with many interesting data releases. Monday kicks off with M3 money supply and private sector loan growth for January. Loans to households increased 2.0% in December, up from 1.9% in November, while loans to non-financial corporations were up 2.3% in December from 2.1% in November. We expect loan growth to the private sector in January to remain around the December levels.

In the UK, focus continues to be on the passing of the EU exit legislation, enabling the UK government to trigger Article 50. The bill is currently in the House of Lords and the socalled committee stage begins on today, where the Lords will discuss and vote on amendments. It remains our base case that the Lords will not delay the bill and the UK remains on track to trigger Article 50 by the end of March, perhaps at the EU summit in Malta on 9-10 March. If the Lords agree the amendments, the bill will go back to the House of Commons for approval and then back and forth between the two chambers until the wording is agreed upon.

In Denmark, the week kicks off with business confidence data. Manufacturing confidence fell slightly in January after climbing strongly in December, so it will be interesting to see which way the wind blows in February. In Sweden, household lending data is due to be released today.

Selected market news

As we await the budget proposal from the White House, a Reuters story reported that it will contain lofty defence spending increases and will among other things establish ‘a more robust presence in key international waterways and chokepoints'. The increase in defence spending is expected to be financed partly by cuts to the US State Department, Environmental Protection Agency and other non-defence programmes. However, as stated by Treasury Secretary Steven Mnuchin in an interview on Sunday, the budget proposal will spare big social welfare programmes such as Social Security and Medicare from any cuts.

President Trump's pick for secretary of the Navy, Philip Bilden, withdrew from consideration yesterday citing government conflict-of-interest rules. In an area where the presidency has placed such high strategical importance, it now leaves Trump without nominees to head both the Navy and the Army, as Vincent Viola withdrew his considerations to head the Army earlier this month.

Following a week with new all-time highs in the major US stock indices, the Asian morning has been off to a sluggish start with Nikkei and Hang Seng trading slightly below par at the time of writing. With most major currencies ‘on hold' as we await Trump's speech on Tuesday, we have seen the downward pressure on EURDKK ease a bit and it is now trading slightly above the central bank's intervention target of 7.4330.

Currency pair USD/JPY

The USD/JPY is probably in a wave 1-2 (blue) unless price breaks below the bottom of wave 1 (blue). A larger ABC (brown) could be taking place within wave 2 (blue). A wave 2 (blue) correction typically last between 100% and 161.8% of wave 1 (see bottom scale).

The USD/JPY is respecting the 88.6% Fibonacci retracement level of wave 2. A break above resistance (orange line) could indicate that the correction is finished.

Currency pair EUR/USD

The EUR/USD is showing a bullish WXY correction (blue/green) within a wave 2 (purple). The wave 2 Fibonacci retracement (purple) levels are potential bouncing spot and reversal levels. A break above the 100% level of wave 2 vs 1 (purple) invalidates it.

The EUR/USD could have completed a bearish ABC zigzag (blue) within an expanded bullish correction via a WXY (green) within wave Y (blue).

Currency pair GBP/USD

The GBP/USD failed to break above long-term resistance (brown) and showed a strong bearish turn instead. The wave count is therefore now showing a completed wave C (blue) and price could continue with the bearish momentum and break below support (blue).

The GBP/USD showed bearish momentum which has been labelled as a 5 wave (orange) sequence as a wave 1 (blue). Price could now build a retracement within wave 2 (blue) but a break above the 100% level invalidates it.

Key Points:

• Euro impacted by political unrest as Far-Right party gains ground in France.
• Watch for the EU CPI Flash Estimate result.
• Euro parity proposition still likely in medium term.

The Euro declined steadily throughout most of last week to touch a low of 1.0492 before recovering a portion of losses to close the week out around the 1.0556 mark. Much of the initial selling came following mounting concerns of political instability in Europe with increased risk of victory by Marianne La Pen’s far right wing party in France. Subsequently, it makes sense to review the salient events that led to the decline and to assess what is potentially on the horizon for the pair.

Last week saw a relatively steady depreciation for the Euro Dollar, which sent it to new lows at 1.0492 before it clawed back some of the losses to close around the 1.0556 mark. Much of the initial selling was spurred by mounting political risk within the European Union. In particular, the odds of a victory by the far-right French candidate Marianne La Pen are increasing and this is over shadowing the current EU PMI results. Subsequently, the Euro was under pressure for most of last week but the pair did receive a much needed boost when the US initial jobless figures showed an uptick to 244k. Regardless, the sentiment swing was only temporary and the pair still declined late into the week.

In fact, the move towards the extreme right in Europe has been a gradual process over the past few years largely in response to the refugee and economic crisis that the continent has faced. However, the move has been solidly opposed by the very many left wing pressure groups and it is likely that any eventual election of a far right party, such as Marianne Le Pen’s, will result in mass demonstrations and economic shutdowns throughout much of France. This of course poses a sharp threat to the Eurozone economy given that, along with their current problems, the last thing they need is political turmoil.

Looking ahead, the coming week has plenty of fundamental economic information for the market to digest. In particular, the EU CPI Flash Estimate will play a relatively key role in determining the near term trend. Inflationary pressures have been relatively lacklustre within the Eurozone of late but the current buoyancy of oil is likely to start having an impact on CPI gains. In addition, there is a bevy of US economic indicators due for release but the market will focus strongly upon the unemployment claims data, which showed an uptick last week, as a gauge of FOMC action next month. Subsequently, some volatility could be apparent around the release of the labour market data which is likely to impact the Euro Dollar.

From a technical perspective, last week’s dip to a new low of 1.0492 was indicative of the current risk-off market. However, our initial bias for the week ahead remains neutral given that RSI has flattened within neutral territory and price action appears to have formed a short term temporary bottom. However, the medium term suggests that the decline from 1.0713 is still in progress and further downside action is likely. Support is currently in place for the pair at 1.0530, 1.0400, and 1.0364. Resistance exists on the upside at 1.0678, 1.0758, and 1.0872.

Ultimately, the Euro Dollar is likely to face ongoing volatility in a similar manner as the greenback experienced during Trump’s ascension. However, the week ahead is likely to focus less upon the current political turmoil and more on some of the underlying economic variables such as the EU CPI Flash Estimate. Regardless, the Euro may very well be heading to parity in the medium term, especially if there is further political unrest.

Key Points:

• Upsides are available but just how far the rally can extend is unclear.
• Last week's performance leaves the AUD well positioned to surge.
• Both technicals and fundamentals are going to be vital this week.

The AUDUSD has been trending higher for some time now and many are beginning to question where it willend up. Some analysts have the pair pegged to hit the 0.80 handle before reversing once again but the 0.77 level also seems to be providing ample resistance as well. As a result, it's worth taking a look at the AUD's most recent week and also what the bias could be for the week to come.

Starting with last week's performance, the Aussie Dollar spent most of last week trending steadily higher in reaction to a number of weaker US fundamental results. Namely, the Market Flash Manufacturing PMI came in at only 54.3 and the Jobless Claims increased to 244K. Any positive US data was offset by the 0.5% uptick in the Australian Hourly Earnings result and remarks from the RBA's Lowe signalling that he believed interest rates had bottomed. However, news that Deutsch bank had forecasted an AUD rally up to the 0.80 mark also added to the overall buying pressure. Unfortunately, these gains were short-lived as a strong Michigan Consumer Sentiment result of 96.3 was all it took to send the pair reeling as the week closed.

As a result of last week's performance, the AUDUSD is in an interesting position. Specifically, the pair has some room to move higher but it is also beholden to the zone of the resistance around the 0.77 handle which seems intent on remaining in intact. Consequently, we will have to look at both the technicals and the fundamentals to establish a bias for the week to come.

On the technical front, the AUD looks to be firmly in an uptrend with the 12, 20, and 100 day EMA's being about as bullish as they possibly could be. Additionally, whilst the rally is moderating somewhat, the Parabolic SAR readings and the ADX oscillators are both signalling that this uptrend remains fairly robust. Interestingly, the RSI is still neutral which seems to indicate that gains may also be more sustainable that initially thought, despite them likely being capped by the 0.77 handle once again.

As for what lies ahead in the news, there is quite a lot of economic data on offer but the major item to monitor is the Australian GDP result. Specifically, the quarterly data is due to be released and, whilst it is currently forecasted at 0.7%, the market will be wary of another negative outcome which would put the nation into a technical recession. Indeed, these fears will be mounting in the wake of Lowe's remarks, in which, he mentioned that Australia was unlikely to reach its 3% GDP growth target. However, a sufficiently positive result could be just the thing needed to spark a rally capable of pushing past the 0.77 handle.

Ultimately, upsides are present for this pair but just how large these are is much less certain. As a result, monitor both the technical and fundamental factors mentioned above as they will be invaluable in staying ahead of the rather unpredictable AUD.

Global Markets:

• Asian stock markets: Nikkei down 0.85 %, Shanghai Composite fell 0.30 %, Hang Seng rose 0.10 %, ASX 200 lost 0.30 %
• Commodities: Gold at $1257 (+0.10 %), Silver at $18.43 (+0.10 %), WTI Oil at $54.25 (+0.45 %), Brent Oil at $56.60 (+0.50 %)
• Rates: US 10-year yield at 2.34, UK 10-year yield at 1.08, German 10-year yield at 0.18

News & Data:

• Australian Inventories Q4 0.3% (QoQ) (Prev 0.5%)
• Australian Company Operating Profit Q4 20.1% (QoQ) (prev 1.0%)
• PBoC Fixes USDCNY Reference Rate At 6.8814 (prev fix 6.8655 prev close 6.8700)

CFTC Positioning Data:

• EUR short 58K vs 47K short last week. Shorts increased by 11K
• GBP short 66K vs 67K short last week. Shorts trimmed by 1K
• JPY short 50K vs 51K short last week. Shorts trimmed by 1K
• CHF short 9K vs 11K short last week. Shorts trimmed by 2K
• CAD long 25K vs 19K long. Longs increased by 6K
• AUD long 33K vs 24K long. Longs increased by 9K
• NZD long 3K vs long 3K last week. No change.

Markets Update:

The Pound came under pressure overnight amid renewed speculations about another Scottish independence referendum. GBP/USD started the new trading week around 1.2460 and fell to a low of 1.2390 ahead of the Tokyo open. The pair later recovered to 1.2430.

Other than that, the US Dollar had a rather mixed performance. The Australian Dollar was the strongest overnight, despite the risk-off sentiment in equity markets. AUD/USD rose from 0.7665 at the open to a high of 0.7705. Meanwhile, EUR/USD began the trading week at 1.0555 and rallied to 1.0575 later in the session.

USD/JPY came under pressure along with the Nikkei and fell to 111.90. However, the pair managed to recover to 112.30. Resistance is now seen at 112.55 and 112.90.

Upcoming Events:

• 10:00 GMT – Euro Zone Consumer Confidence
• 10:00 GMT – Euro Zone Business Climate
• 13:30 GMT – US Durable Goods Orders
• 15:00 GMT – US Pending Home Sales
• 16:00 GMT – FOMC Member Kaplan speaks
• 21:45 GMT – New Zealand Trade Balance
• 23:50 GMT – Japan Industrial Production
• 23:50 GMT – Japan Retail Sales

The Week Ahead:

Tuesday, February 28th

• 00:00 GMT – Australian HIA New Home Sales
• 00:00 GMT – Australian ANZ Business Confidence
• 00:30 GMT – Australian Current Account
• 07:45 GMT – French CPI
• 07:45 GMT – French GDP
• 10:00 GMT – Italian CPI
• 13:30 GMT – US GDP
• 14:45 GMT – US Chicago PMI
• 15:00 GMT – US CB Consumer Confidence
• 15:00 GMT – US Richmond Manufacturing Index
• 20:00 GMT – FOMC Member Harker speaks
• 20:30 GMT – FOMC Member Williams speaks
• 21:00 GMT – US President Trump speaks
• 22:30 GMT – Australian AIG Manufacturing Index

Wednesday, March 1st

• 00:30 GMT – Australian GDP
• 01:00 GMT – Chinese Manufacturing PMI
• 01:00 GMT – Chinese Non-Manufacturing PMI
• 01:45 GMT – Chinese Caixin Manufacturing PMI
• 08:45 GMT – Italian Manufacturing PMI
• 08:50 GMT – French Manufacturing PMI
• 08:55 GMT – German Manufacturing PMI
• 08:55 GMT – German Unemployment Change
• 08:55 GMT – German Unemployment Rate
• 09:00 GMT – Euro Zone Manufacturing PMI
• 09:30 GMT – UK Manufacturing PMI
• 13:00 GMT – German CPI
• 13:30 GMT – US Core PCE Price Index
• 13:30 GMT – US Personal Income
• 13:30 GMT – US Personal Spending
• 13:30 GMT – Canadian Current Account
• 14:45 GMT – US Manufacturing PMI
• 15:00 GMT – US ISM Manufacturing PMI
• 15:00 GMT – Bank of Canada Interest Rate Decision
• 15:30 GMT – US Crude Oil Inventories
• 18:00 GMT – FOMC Member Kaplan speaks

Thursday, March 2nd

• 00:30 GMT – Australian Building Approvals
• 00:30 GMT – Australian Trade Balance
• 06:45 GMT – Swiss GDP
• 08:15 GMT – Swiss Retail Sales
• 09:30 GMT – UK Construction PMI
• 10:00 GMT – Euro Zone CPI
• 10:00 GMT – Euro Zone Unemployment Rate
• 13:30 GMT – US Initial Jobless Claims
• 13:30 GMT – Canadian GDP
• 23:30 GMT – Japanese CPI
• 23:30 GMT – Japanese Household Spending

Friday, March 3rd

• 01:45 GMT – Chinese Caixin Services PMI
• 07:00 GMT – German Retail Sales
• 08:45 GMT – Italian Services PMI
• 08:50 GMT – French Services PMI
• 08:55 GMT – German Services PMI
• 09:00 GMT – Euro Zone Services PMI
• 09:00 GMT – Italian GDP
• 09:30 GMT – UK Services PMI
• 10:00 GMT – Euro Zone Retail Sales
• 14:45 GMT – US Services PMI
• 15:00 GMT – US ISM Non-Manufacturing PMI
• 18:00 GMT – Fed Chair Yellen speaks

Daily Pivots: (S1) 138.80; (P) 140.28; (R1) 141.15; More...

GBP/JPY dips notably today but stays in range of 138.53/142.79. Intraday bias remains neutral first. Overall, price actions from 148.42 are seen as a corrective pattern. Below 138.53 will bring deeper fall, possibly through 136.44 support. But strong support could be seen at 50% retracement of 122.36 to 148.42 at 135.39 to bring rebound. Above 142.79 will turn bias back to the upside for 144.77 and above.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern with a test on 122.36 low next. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement at 167.78.