The dollar and JPY remained on the back foot in Asia as risk appetite improved in the wake of rising Asian stocks and a number of positive data releases that reflected a broad range of "green shoots" around the globe. Key Asian stock markets including Japan, Hong Kong, Shanghai and Australia rose over 2% after the gains on Wall Street. Aiding positive sentiment was news that Singapore GDP rose over 20.4% Q/Q while in Australia, the National Australian Bank June business confidence index rose to the first positive result since December 2007. In New Zealand, RBNZ Bollard said that New Zealand will recover ahead of the pack. UK surveys released during the Asian session showed RICS house price balance improved to the best level since September 2007 while the British Retail Consortium saw like-for-like sales rose +1.4% y/y in June. A survey by UK's Deloitte also shows that corporate sector confidence in the UK is at a two-year high. Currency gains were hard-won however in Asian trading, having already made substantial progress in NY trading. EUR-USD for instance, was capped ahead of 1.4010 in early trading retreating to 1.3960 before rising to 1.3980 ahead of the London open. Similarly, GBP-USD was capped ahead of 1.6300, resulting in some profit taking and a pullback to 1.6229. USD-JPY, though bid, was only above to rally above 93.20 in the afternoon, with dips in Asia limited to 92.81.
Various "green shoots" data along with analyst Meredith Whitney's upgrade of Goldman Monday, which boosted financial stocks, have fed a rebound in risk appetite and associated movement in asset and currency markets. This backdrop has set the USD and JPY somewhat lower, a theme that looks likely to persist for now, although directional impetus is perhaps lacking. The markets will continue to key off of earnings reports, with Goldman Sachs, Johnson & Johnson, Intel and YUM Brands due out today. There's also key data on tap today, including German July ZEW, U.K. inflation and, in the U.S., June retail sales, PPI, business inventories and the weekly chain store sales. Market participants will be particularly anxious to take the pulse of the consumer. The markets will also be looking ahead to earnings reports from JPMorgan (Thursday), Google (Thursday), IBM (Thursday), Citigroup (Friday), and Bank of America (Friday), as well as Wednesday's data on CPI, industrial production, and the Empire State index, along with the FOMC minutes to the June 23, 24 policy meeting.
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