The week begins with markets in a weakly risk-on mood while warily eyeing Wednesday’s upcoming release of US CPI data, which is expected to show an unchanged annualized rate.

1. Markets are already looking ahead to Wednesday’s all-important US CPI data release. The data is widely expected to show a month-on-month increase in inflation, which would leave the annualised rate unchanged at 3.0%.
2. Despite the public holiday in Japan today, there was some market movement during the Asian session, especially in the Forex market, where the New Zealand Dollar has been the strongest major currency while the Japanese Yen has been the weakest, putting the NZD/JPY currency cross in focus. The US Dollar has barely moved. Trend traders will remain interested in being long EUR/USD although there has been very slow movement in that currency pair lately.
3. Crude Oil is rising steadily, partly due to a belief that the Iranian axis is about to launch a major attack on Israel, which has threatened to reply with unprecedented firepower on Lebanon and possibly also Iran if the attack crosses certain red lines. The US administration is desperate to calm tensions and is pushing a ceasefire on Israel and Hamas and seems to be using the tension to sell the ceasefire. This evening has been the most widely anticipated data for any attack to begin.
4. Gold looks weakly bullish above $2,417.
5. Markets can generally be described as having a weak risk-on bias so far today.
6. There are no high-impact data releases scheduled for today, so market action is likely to be quiet.

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