The foreign exchange market at the beginning of the week has seen relatively quiet price action. USD/JPY is trading in the 144 yen range, while EUR/USD is in the 1.09 range. Despite the stronger-than-expected nonfarm payrolls data from the U.S. at the end of last week, the market didn’t exhibit a one-sided buying spree in the dollar. Instead, it experienced sharp fluctuations and eventually settled back near its initial levels. There hasn’t been any significant change in the trend of the U.S. dollar index’s rise since the start of the year. However, due to the intense back-and-forth movements, short-term positions have likely been considerably adjusted. The market seems to be waiting for the next catalyst.
This week, the U.S. Consumer Price Index (CPI) for December is scheduled to be released on the 11th, followed by the Producer Price Index (PPI) for December on the 12th. With significant events gathering toward the end of the week, the beginning of the week appears to be characterized by a lack of fresh market-moving developments.
Among these developments, the direction of the stock market is a cause for concern. With the solid U.S. employment statistics, the trend of rising U.S. bond yields continues, and the equity market appears to be in a cautious mode. Asian stocks and U.S. and European stock futures have been trading with a weaker tone at the start of the week. The forex market may also experience some yen buying pressure as investors lean slightly towards risk aversion.
Today, there are no major U.S. economic indicators scheduled for release. Regarding speeches and events, a speech by the President of the Atlanta Federal Reserve is on the calendar, but overall, it seems to be a day marked by a scarcity of significant market-moving factors.
Anticipate today to be characterized by a lack of major catalysts, with markets tending to remain range-bound.
