Finnish Prime Minister Jyrki Katainen said Saturday he wasn't in a position to comment on who would succeed Jean-Claude Juncker as head of the so-called Eurogroup of euro-zone finance ministers, and that he wouldn't even think about the job if it was full-time post.

Whilst AUD/USD players eventually took out the 1.0350 barrier overnight in the aftermath of shocking PMI releases from the EZ and in particularly Germany, there was not much further follow through. AUD/USD bottomed out at 1.0336 and climbed higher during the NY session in stuttering fashion to close on Thursday at 1.0389.

USD/AXJ is set to open higher across the board after the fallout from the China flash PMI reading continued in early Europe after a shocking run of PMI numbers from EZ countries headlined by Germany.

       Market Briefs

• US Feb Housing Starts 698k vs. 706k (revised from 699k), expected 700k
• US Feb Building Permits 717k vs. 682k, expected 690k
• Fed Bernanke: lessons of history is that central l banks should not move too quickly to reverse monetary accommodation after deep recession, gold standard not feasible
• Fed Powell: regulatory system must do better, Fed can’t shrink balance sheet too quickly and snuff out recovery

The upcoming week is relatively light on the data side but investors will be keen to continue following Fedspeak as uncertainty over the FOMC's policy path rises. Bernanke will be speaking on Tuesday, Thursday and Friday. In other G10 economies, normal service on the political commentary front aside, CPI releases are out in the UK, Eurozone and Canada and policymakers will be looking for more clues over the impact of oil on headline and core prices.

       Japan and 12 other Asian countries will likely agree to double the amount of funds available under a regional currency swap pact from the current $120 billion, international financial sources told The Nikkei on Saturday.
Joining Japan will be China, South Korea and the 10-member Association of Southeast Asian Nations (ASEAN).

USD/AXJ is set to open higher across the board and basically in break out territory after it leaves behind its tight ranges of the last 6 to 7 weeks. It is hard to pin down one particular driver rather there is a host of drivers.

	EUR/USD	USD/JPY	GBP/USD	USD/CHF	AUD/USD	EUR/GBP
RESIST3	1.3192	84.27	1.5869	0.9378	1.0576	0.8490
RESIST2	1.3122	83.93	1.5834	0.9339	1.0562	0.8468
RESIST1	1.3090	83.83	1.5749	0.9332	1.0485	0.8335
====	===	===	===	===	===	===
SUPPT1	1.2974	83.53	1.5606	0.9250	1.0428	0.8296
SUPPT2	1.2955	82.65	1.5531	0.9200	1.0405	0.8277
SUPPT3	1.2931	81.97	1.5517	0.9161	1.0400	0.8264
====	===	===	===	===	===	===
Strategy	SHORT	BUY	SHORT	LONG	SELL	BUY
Price	1.3031	83.55	1.5690	0.9309	1.0473	0.8340
Target	1.2845		1.5535	0.9575
Stop	1.3095		1.5761	0.9190

	EUR/USD	USD/JPY	GBP/USD	USD/CHF	AUD/USD	EUR/GBP
RESIST3	1.3213	83.44	1.5869	0.9339	1.0670	0.8506
RESIST2	1.3192	83.27	1.5834	0.9300	1.0576	0.8490
RESIST1	1.3122	83.10	1.5749	0.9244	1.0562	0.8468
====	===	===	===	===	===	===
SUPPT1	1.3052	82.65	1.5680	0.9200	1.0499	0.8319
SUPPT2	1.2988	81.97	1.5613	0.9141	1.0473	0.8314
SUPPT3	1.2974	81.87	1.5603	0.9126	1.0428	0.8288
====	===	===	===	===	===	===
Strategy	SELL	BUY	SHORT	BUY	SELL	BUY
Price	1.3120	82.65	1.5690	0.9200	1.0555	0.8320
Target			1.5535
Stop			1.5761

U.S. Treasurys are likely to weaken in Tokyo as investors still see room for further downside in the prices of the safe-haven assets. Kazuaki Ohe, executive director at the debt department of CIBC World Markets in Tokyo, says that 10-year U.S. Treasury yields will rise to at least 2.2%, equivalent to the U.S. inflation rate on a CPI basis. "Investors will unload more Treasurys before they start buying them again. They will seize any opportunity to take profits," he says. Overnight in New York, 10-year note slumped to 98 27/32 yielding 2.130%, while 2-year note edged down to 99 26/32 yielding 0.346%.  

The Chilean peso ended weaker against the dollar Monday weighed by the drop in international copper prices and concerns about Chinese demand for the metal.
The peso ended at CLP485.50 to the dollar versus Friday's close of CLP483.10. During the session, the peso traded in a narrow range of CLP483.75 to CLP485.80.

The dollar-positive afterglow from Friday's strong US payrolls report lasted into the Asia session on Monday. EURUSD is now firmly back on the 1.30 handle, and both AUD and NZD are struggling. This is partly due to the absence of overnight drivers given the empty calendar. But there are forces at work too - it is becoming increasingly clear that the psychology around the US dollar is changing. The dollar no longer strengthens only in the presence of risk aversion and now stronger US economic data is just as likely to do the trick. This change in character paves the way for further dollar gains over the coming months as market expectations for further Fed easing recede.

The NZD/USD pair spent much of the week falling as the “risk off” trade came back. The pair did however, bounce from the 38.2% Fibonacci retracement level as the trend continued. The commodity markets will more than likely continue to benefit from the massive amounts of liquidity in the system as central banks continue to march forward with the flooding of Dollars, Yen, and Euros into the system. With this in mind, there is no real sense that the futures markets will fall in any great amount.

The euro fell Friday, weighed by a decision by the International Swaps and Derivatives Association, which declared that Greece's recently-completed debt exchange made investors eligible for payouts on insurance-like contracts designed to protect against losses on Greek sovereign debt. Early Friday, Greece announced that more than 85% of its private creditors had agreed to restructure about EUR200 billion worth of debt.

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