Asian markets have been rising on optimism of economic recovery from US and Germany as reports suggest strength of economy is taking place after Friday's US jobs report showed unemployment declining to 9%. MSCI Asia Pacific index rose 0.2%, Nikkei rose 0.4%, and S&P 500 Futures rose 0.1% after closing last week at the highest level since June 2008 while the Hang Seng was down 0.5%. Financial markets in South Korea and Hong Kong reopened today while China remains closed due to the ongoing Lunar New Year holidays.
The EURUSD gained strength to high of 1.3624 as reports today are forecast to show German factory orders and industrial production this week are poised for gains, AUDUSD gained to 1.0151 even as retail sales rose 0.2% (prev. 0.4%, exp. 0.5%) less than forecast as job advertisements improved 2.4% showing signs of improving labor market where 17,500 jobs were added last month, NZDUSD improved to 0.7719 after the Prime Minister said that the economy will be better this year, USDJPY strengthened to 82.28 on Dollar strength after Friday's jobs data and prospect of stronger data due this week, GBPUSD rose to 1.6145 as data this week could show improvements in industrial production and the BOE holds rate decision meeting.
Forecast for US data this week for consumer borrowing expected to climb by $2.5 billion (prev. $1.3 Billion), small business optimism probably increased to 93.8 (prev. 92.6), German factory orders probably increased 21.3% YoY, industrial production probably expanded 0.2% (prev. -0.7%) which could improve prospects of more signs of positive economic growth and increase in risk sentiment and was further reiterated after the Egyptian ruling party and opposition agreed on some limited steps to resolve the crisis while Hang Seng dropped on concern that Chinese policy makers will take more steps to cool down rising prices by curbing property speculation.
BOJ Governor Shirakawa said that the Japanese economy is recovering and performing comparatively well as compared with other economies and recent data suggests the economy could emerge from the current pause in growth. While the BOJ expects Japan's slowdown to end this quarter, continued deflation will probably prevent it from increasing interest rates until 2013 at the earliest. Shirakawa indicated that the central bank could increase its asset-buying program if the economy deviates materially from projections, then additional purchases are conceivable. GDP growth will probably accelerate each quarter of 2011 after contracting at 1.9% last quarter.
EU investor confidence, German factory orders and US consumer credit form part of today's economic calendar.