Forex Today: Risk-off grips Asia, PMIs, Fedspeaks to dominate

A dull Asian affair, with broad based US dollar correction the underlying theme this Friday. While risk-off sentiment re-emerged in Asia after poor Chinese services PMI spooked markets, weighing heavily on the higher-yielding assets such as treasury yields, equities etc. Amongst the Asia-pac currencies, the yen was the biggest gainer, despite mixed Japanese inflation figures, while the Kiwi emerged the weakest.

Next of relevance for the markets remain the German retail sales data, which will be followed by a raft of services PMI reports from the Euro area economies and UK. In the NA session, the US ISM non-manufacturing PMI report will be published. However, speeches from FOMC members Evans, Powell, Yellen and Fischer will emerge the main marketing moving events.

Main topics in Asia

Mixed inflation figures in Japan, Yen non-reactive

Japanese inflation numbers for January (nation-wide) and February (Tokyo) saw a mixed-bag outcome, with overall reads still being far from BOJ's desired 2% target.

China 's Caixin Feb Services PMI misses expectations

China 's Caixin February Services PMI came in at 52.6 vs 53.1 last, while its composite was 52.6 vs 52.2 last.

BOJ reduces bond-buying amid limited selling interest

On Friday, the Bank of Japan's (BOJ) bond buying operation underscored limited selling interest from market players, which had limited impact on the Japanese Government Bond (JGB) yields, Reuters reports.

Fed’s Mester says the central bank is achieving its dual mandate

Loretta Mester, President and CEO of Federal Reserve Bank of Cleveland, while speaking at the Athena Center for Leadership Studies at Barnard College, said the central banks is hitting both US employment and inflation goals.

Key focus for the week ahead                                                  

EUR/USD consolidates minor-recovery above 1.05, awaits PMIs

The bulls appear to have lost ground over the last hours, capping the recovery-attempts in EUR/USD from multi-week lows struck at 1.0495 in the US last session.

UK: February services PMI to come in a bit weaker than consensus - TDS

Analysts at TDS expects that mirroring the downside surprise seen in Wednesday’s manufacturing PMI, they see scope for the February services PMI of the UK to come in a bit weaker than consensus with a decline from January’s 54.5 level to 53.8 (vs consensus of 54.1).

US data preview and review - Nomura

We expect the ISM non-manufacturing index to have somewhat improved in February and forecast a reading of 57.0 (Consensus: 56.5)."

Event risks ahead - Westpac

US: Fed Chair Yellen's speech in Chicago will receive a lot of attention following hawkish remarks by Dudley, Williams and Brainard this week and given March FOMC is only a week and a half away.