Headlines:

• Japan in the spotlight to start the new week
• Japan PM Takaichi says won’t resort to debt issuance to fund food sales tax suspension
• US futures dip lower as tech shares wobble again
• It’s a pivotal week for the US Dollar as traders turn their focus to the US NFP report
• Is the worst over for silver? The answer may lie in the upcoming US NFP and CPI reports
• A testing moment for the precious metals recovery on the charts
• Bitcoin takes a light knock in fall back under $70,000
• A trifecta of key US economic releases will play out this week
• China calls on banks to reduce US Treasuries exposure amid “market volatility” – report
• ECB policymaker Kocher says existing policy stance is appropriate
• Eurozone February Sentix investor confidence 4.2 vs 0.0 expected

Markets:

• Japanese yen holds higher after verbal intervention by Tokyo officials
• Takaichi trade in focus after ruling LDP party claims ‘supermajority’ in election
• US dollar pressured lower across the board in mixed markets
• Precious metals stay in focus; gold up 1% to $5,010 while silver up 3% to $80.28
• Equities wobble after steady showing early on, tech shares lagging
• European indices hold slight gains while US futures drop; S&P 500 futures down 0.2%, Nasdaq futures down 0.5%
• Bitcoin dips back below the $70,000 mark; down over 2% to $68,983
• 10-year Treasury yields up 2 bps to 4.228% as China calls on local banks to reduce exposure

It’s a mixed start to the new week with plenty of action to note already. The main story over the weekend was from the land of the rising sun, as Japan elections saw Takaichi strengthen her mandate and position as prime minister. The ruling LDP party claimed a ‘supermajority’ and that solidified her status as a fiscal dove. Of note, it’s all but a given now for Takaichi to push through with the food sales tax suspension for two years – one that will leave a ¥5 trillion annual hole in Japan’s finances.

USD/JPY took a tumble in Asia but amid verbal intervention from Tokyo officials, managed to turn things around. The pair is hovering around 156.40-60 levels mostly in European trading, down around 0.5% on the day. The track back isn’t much despite heightened risks of actual intervention though. That considering the Takaichi trade remains in full swing and looks poised to pressure the Japanese yen from a structural perspective.

As the yen holds firmer, the dollar is the one trailing behind to start the week. The greenback is lower across the board with EUR/USD seen up 0.5% to 1.1875 and GBP/USD up 0.3% to 1.3647 currently.

It points to still mixed sentiment on the dollar as of late, with commodity currencies also gaining modest ground so far today. USD/CAD is down 0.5% to 1.3615 while AUD/USD is up 0.4% to 0.7045 on the day.

In other markets, precious metals are also still in the spotlight with gold and silver showing more tentative signs of extending the recovery bounce. Gold is trading above $5,000 with silver above $80, keeping with the bounce since Asia. There was a slight dip mid-way through the session, as risk sentiment took a bit of a knock, but that was short-lived for precious metals.

The knock came on two fronts with equities falling while Bitcoin also dropped further after early losses. US futures dipped as tech shares fell but are recovering just a little bit more now. S&P 500 futures were steadier before falling by 0.5% and then now seen down just 0.2% on the day. Meanwhile, Nasdaq futures fell by as much as 0.8% but are now down just 0.5% with tech shares continuing to stay on edge.

As for cryptocurrencies, Bitcoin fell below the $70,000 mark early on before extending declines to just under $69,000 on the day.

It’s a big week coming up for markets, not least with a trifecta of key US economic data releases featuring retail sales, non-farm payrolls, and inflation data. So, strap yourselves in. It’s going to be a hectic and fun week in markets.

This article was written by Justin Low at investinglive.com.