As jitters over Italy’s political situation calmed down yesterday, risk-sensitive assets rallied across the board. Haven bonds and the yen fell, while stocks rose sharply amid hopes that fresh elections may be avoided.
Today has been a little light on the data front with the exception of Canadian employment figures, which were released earlier. Headline employment had been expected to have risen by around 17,800 last month, while the unemployment rate was seen steady at 5.8%. While the unemployment rate did remain at 5.8%, the headline figure disappointed as employment fell by 1,100.
The Aussie could extend its gains next week unless the RBA’s monetary policy meeting minutes on Tuesday convey a surprisingly dovish message or the Australian employment numbers on Thursday disappoint expectations. From the United States, next week’s key data include retail sales on Tuesday and industrial production and some housing market data on Wednesday.