Daily Report: Aussie Firm as Stocks Rally

Return of risk appetite is still the main theme as another week starts. Aussie and Kiwi are generally higher, lifted by rally in Asian stock markets while the Japanese yen weakens. Markets are pretty steady elsewhere with the greenback staying in range against European majors. The economic calendar is rather light today which features Swiss SVME PMI, Eurozone Sentix investor confidence, UK construction PMI and US construction spending. As mentioned before, in early part of Jan, commodity currencies will likely remain firm on stocks rise but such effects would fade as stock complete the corrective rally.

Switzerland's SVME PMI in December is going to show further contraction in the country's manufacturing sector with another record low of 34.5, after plunging to 35.2 in November, as companies continue to cut back production. Eurozone's Sentix investor confidence in January is expected slip to another record low at -44, after falling to -42.3 in December, suggesting much concerns on the nation's economic condition and labor market. In the UK, economists anticipate construction PMI in December to have dropped to 30.5, another weaker reading after 31.8 in November.

In the US, November construction spending is expected to have deteriorated further to 1.3% from -1.2% in October. While the residential component should have dropped sharply as suggested by poor housing starts and housing permits reported earlier.

BoJ Governor Shirakawa said during the weekend that central banks would like to keeping thinking of ways to cope with the "financial crisis " with monetary policy. BoJ is always watching yen's strength closely. San Francisco Fed Yellen said that Fed must ensure it has an "exit strategy to wind down the facilities in a timely and effective way" when they're no longer needed. The Sunday Time's Shadow BoE MPC voted 6-3 to keep rates unchanged at 2.00%.