The near-term direction for assets could well be determined by U.S. data on consumer prices and retail sales this week, with much resting on whether inflation continued to slow in January.
Bruce Kasman, head of economic analysis at JPMorgan, expects core CPI to rise 0.5% and sales to jump 2.2%, underlining the message of resilience from the bumper January payrolls report. Markets have already sharply raised the profile for future tightening by the Federal Reserve, with rates now seen peaking up around 5.15% and cuts coming later and slower.
That shift helped stabilise the dollar, especially against the euro which slipped 1.1% last week and extended the retreat on Monday to a five-week low of $1.0660 . That was well away from its early February high of $1.0987.