The current market dynamics showcase a firming bias for the US dollar ahead of the anticipated CPI report. Among the G10 currencies, sterling stands out as the strongest, bolstered by a resilient labor market report.

Meanwhile, the Nikkei reached new 30-year+ highs today, surging by 3% at one point, the most since November 2022, before settling up nearly 2.9%. Most markets in the Asia Pacific region saw gains, except for Australia and New Zealand. However, Europe's Stoxx 600 is retracing around half of yesterday's 0.55% gain. US equity index futures are down following yesterday's failure by the S&P 500 and Nasdaq to sustain earlier gains.

Gold is stabilizing after hitting a 12-day low near $2012, currently hovering around $2026.
April WTI is continuing its recovery from yesterday, breaking above $77 a barrel for the first time this month.

Asia Pacific
Japanese markets reopened after a long weekend holiday, reporting that producer prices did not decline on a year-over-year basis for the first time since the end of 2022. Japanese producer price inflation peaked in December 2022 at 10.6%, gradually slowing down to a revised 0.2% in December 2023 and remaining steady at 0.2% in January.
The highlight of the week will be the Q4 2023 GDP due early Thursday.
Australia's January employment report is also expected early Thursday.

The dollar strengthened to nearly JPY149.50 during the Europe-North American session overlap and reached almost JPY149.70 today, marking a new three-month high.
The Australian dollar hit a new marginal high yesterday but lacked follow-through buying today, trading mostly between $0.6510 and $0.6530.

Europe
the economic calendar remains light this week for the eurozone, with today's focus on the German ZEW survey, showing continued improvement in the expectations component for February, the seventh consecutive monthly rise.

Although the UK's labor market is gradually slowing, today's report exceeded expectations, supporting sterling's higher high for the third consecutive day, unlike the euro, which is trading in a narrow range below yesterday's levels but above its 200-day moving average.

America 
The US headline January CPI is expected to rise by 0.2% for the third consecutive month. Fed Chair Powell emphasized during the post-FOMC press conference that the Fed is not necessarily seeking better data, but rather good data, with a 0.2%/0.3% headline/core CPI meeting that criteria. Powell also noted that officials are unlikely to be confident that inflation will sustainably reach the 2% target by the March FOMC meeting.

The US dollar traded within last Friday's range against the Canadian dollar in subdued trading conditions.