Global stocks fell on Monday post-G7 meeting over the weekend in Tokyo. The inclusion of the words "downside risks persist" doesn’t please investors who are already feeling kind of nervous. As stocks fall, so do currency carry trades: Japanese yen gained against most other currencies except the Aussie which is getting a boost after the RBA suggested further rate hikes

are possible.

Euro gained against the US dollar Monday but later gave up much of its gains. EUR/USD’s nearest support are around 1.4440, 1.4400-10. ECB’s Axel Weber said the central bank is still concerned about inflation. EuroGroup head Juncker said Eurozone growth remains robust, although Eurozone GDP is likely to slow to just below its potential rate (1.8% vs 2%) this year.

German Finance Minister Peer Steinbrueck said the G7 estimates banks worldwide will suffer writedowns of $400 billion. Financial institutions have marked down about $146 billion of losses since the start of 2007. No wonder stock investors and carry traders are feeling the risk.

Tuesday:

UK CPI, retail price 0930 GMT

German ZEW 1000 GMT

US IBD/TIP economic optimism 1500 GMT

Fed’s Yellen speaks on economy 1605 GMT

NZ PPI 2145 GMT

Japan trade balance 2350 GMT

Posted in Categories: Forex.

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