The financial markets are gearing up for a significant week as attention turns to Japan's final Q4 GDP Growth Rate, expected to be at the forefront of economic discussions. Concurrently, analysts keep a close eye on Household Spending figures, anticipated to play a secondary yet crucial role in the economic narrative. Meanwhile, the US markets will focus on upcoming jobs data, which could provide fresh insights into the country's economic trajectory.
In Japan, the GDP Growth Rate will take center stage, with economists and investors alike scrutinizing the figures for any signs of economic resilience or weakness. The Household Spending data will also receive considerable attention, as it often serves as a barometer for consumer confidence and economic vitality. In addition, Westpac’s Consumer Confidence gauge and NAB’s Business Confidence figures are slated for release, offering further insights into the economic landscape.
On the currency front, Monday saw the EUR/USD unable to sustain its upward momentum, failing to extend its recent rebound. In contrast, the Greenback showed signs of revival, buoyed by safe haven demand that supported further appreciation of the Japanese yen. This demand led USD/JPY to drop well below the 147.00 support level for the first time since early October. The rally in GBP/USD encountered formidable resistance around the 1.2950 region, while the US Dollar Index (DXY) managed to reclaim the 104.00 zone.
Gold prices continued their downward trend for the third consecutive day, adding to the current leg lower. Similarly, American reference WTI prices resumed their downtrend, falling back below the $67.00 mark. The AUD/USD pair also experienced a decline, breaching the 0.6300 support level.
The moderation in the core index is likely to reflect some giveback in specific categories that experienced significant surges in January. Analysts suggest this could lead to a more balanced inflation outlook in the coming months, providing some relief to consumers and policymakers alike.