Consolidation the EURO Bear Enemy

The first Monday after NFP is historically the least volatile day of the month. So far, this first day of North American daylight saving time is holding true to form. However, there are a number of subplots that are very much capable of widening this rather contrived forex trading range. Once the stranglehold of FX options expires, this market will become exposed to more noise.

Regional markets have been very much mixed as investors digest Friday's above expected US Non-farm payroll and the sharp uptick in Chinese CPI over the weekend. Not aiding Euro periphery bond yields was the Fitch Rating credit agency cutting Italy's credit late Friday by one notch to BBB+ with a negative outlook, citing increased 'political uncertainty.' It was very much expected, as this agency plays catch up to where S&P's has been.

Released Chinese economic data over the weekend showed inflation spiking to +3.2%, y/y last month versus the +3% consensus and +2% in January, driven mostly...