The euro started its weekly trade with straight gains against the dollar, while commodities rose and equities as the yen weakened after Bank of Japan introduced new measures to stimulate the economy.
With corporate earnings season on tap and Spanish banks selling more debt at lower borrowing costs, expectations are improving and market confidence is actually building up on the outlook of the global economy.
Eyes are tracking the U.S. earnings season while financials on the Standard & Poors 500 Index are expected to report earnings this week. So far, two-thirds of the companies have reported better-than-expected profits.
In Europe, markets will watch debt-ridden Spain in the second debt sale of the yearThe Madrid-based treasury is selling multi-maturing debt today. Last week, an earlier bond auction fleshed out improving risk appetite among traders.
The single currency set a fresh high at 1.3402 against its U.S. counterpart as of 06:14 GMT2 today, trading now around 1.3382 after German Finance Minister Wolfgang Schaeuble said euro is "over the worst of the crisis."
Mr. Schaeuble brought out slightly better outlook for 2013 last Friday, where he said the worst is over in the euro crisis, applauding Greece for harsh reforms and sounding that France would self-control its problems.
"I think we have the worst behind us. Countries like Greece have recognized that they can only overcome the crisis with hard reform. I hope the progress will continue. We are moving ahead step by step," Schaeuble said.
Asked if France may risk the euro, Schaeuble said "Im sure that France will meet its obligations. The government knows very well that every country has to continually carry out reforms to remain competitive."
The euro was driven to its highest level in eight months last week by European Central Bank President Mari Draghi who re-vowed to protect the single currency, where he beleived 17-nation euro bloc is recovering gradually.
Meanwhile, pressure is piling up over the Japanese yen, which is trading at its weakest levels in almost two years, as the next central bank chief said he is seeking a "bold policy leader." Japans financial markets are shut down today.
Goods news flew from Japan last Friday as Prime Minister Shinzo Abe announced a fiscal stimulus of 10.3 trillion yens in a bid to lift gross domestic product by about 2 percent and boost employment by 600 thousand.
The Japanese government also promised to bolster ties with the Bank of Japan in its latest attempts to tackle intolerable deflation and help the economy, fueling expectations of bolder policy action by the new government.
However, market sentiment is likely to remain subdued with the start of the week, as traders anticipate the Federal Reserve Chairman Ben S. Bernanke to halt speculation over an early exit to the Feds bond-buying program.
The dollar is actually under pressure as markets closely anticipate the Feds policy ahead of Speech by Mr. Bernanke on monetary policy and the recovery from the financial crisis later in the trading hours on Monday.
Fed dove Chicago President Charles Evans told a forum on Hong Kong earlier today that policymakers can exit asset purchases if the U.S. economy creates about 200 thousand jobs a month for several months.
Evans backed stimulus again as he said the U.S. central bank should keep policy accommodative to support the economy while lawmaker reduce government spending to tame the countrys budget deficit.
The U.S. economy is expected to grow by 2.5 percent in 2013 and unemployment rate would be 7.4 percent this year, Evans said. Fed policymakers expected GDP growth of between 2.3 percent and 3.0 percent this year.