Risk sentiment improved slightly on Friday night. Boosts to sentiment were the US retail sales report beat expectations (before negative revisions), although consumer confidence slipped, and rumours Janet Yellen (who the market perceives to be a dove) may be promoted to Fed Vice Chairman. The S&P500 made a fresh 2009/2010 high at the open, but closed just below Thursday's level to be flat overall. The CRB index was flat too, although oil (down 1.1% and forming a bearish key reversal day), and gold (- 0.7%) seemed affected by expectations of China tightening and the confidence report. US 10yr notes shed 3bp overall, after an earlier spike on retail sales, and formed a bullish (yields lower) key reversal.

The US dollar fell from 80.20 to 79.70, seemingly rattled by Yellen's rumoured nomination (later confirmed) which could imply extended policy accommodation. EUR rose from 1.3700 to 1.3796. GBP was short-squeezed from 1.5050 to 1.5218. Yen suffered again amid BOJ easing rumours, from 90.60 to around 91.00 in a volatile session. USD/CAD made a 2009/2010 low of 1.0156, helped by a strong employment report. AUD initially rose offshore from 0.9160 to 0.9195 (a post-Jan high), but reversed the gains in NY, and opens this morning at 0.9152. NZD rose to 0.7050, slipping to 0.7020 by the close. AUD/NZD closed weaker at 1.3040.

AUD/USD and NZD/USD outlook next 24 hours: Sunday media reports suggesting a bailout deal for Greece has been done by Eurozone members should be supportive today. AUD should trade above 0.9140 and may attempt 0.9195, while NZD should trade above 0.6990.