Market indications of further gains for risk assets today could be tempered by a jam-packed calendar this week.

On Friday night European and US shares rallied, interest rates rose and crude oil and copper continued their recent march higher. The US dollar edged higher in calm forex trading. These moves indicate the phased approach to China/US trade negotiations continue to reverberate. Asia pacific futures markets imply opening gains for regional stocks this morning.

Data and central bank decisions will give investors much to consider. The Bank of Japan and the US Federal Reserve deliberate on interest rates this week. Interest rate traders are pricing a 90% probability of a 0.25% reduction in US cash rates on Wednesday night, and a further inching into negative cash rates in Japan on Thursday. Investors will weigh the benefits of supportive monetary conditions against the negative policy signal.

Economic release this week could shed light on a pivotal market concern. German inflation, French GDP, Japanese retail sales, China PMIs and US non-farm payrolls all speak to recent indications of slowing global growth. Forecasting potential market reactions is complicated by the impact the information has on central bank action.

Australian inflation on Wednesday is forecast at an annual rate of 1.6% (trimmed mean). Any divergence from consensus could have an immediate impact on the Australian dollar and RBA intentions. Analysts will look for the impact of a recent upswing in house prices in building approvals data on Thursday.

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