A flurry of US economic data including on housing, manufacturing, inflation and GDP will help determine bets on the timing of a Federal Reserve interest rate increase.
Wall Street rallied last week after the Fed signalled interest rates might increase more gradually than policy makers initially expected. While the Fed's open market committee dropped a reference to being "patient" when it came to lifting rates, Fed Chair Janet Yellen stressed that it did not mean the central bank had become "impatient" to do so.
Still, the outlook for more muted rate hikes knocked the US dollar from its highest level in more than a decade.
Most of the meat of the dollar bull-run is done," David Bloom, global head of currency strategy at HSBC Holdings in London, told Bloomberg. "I think the Fed rate hike is in the price. The big motivation behind the dollar bull market has dried up."
But equities remain appealing, even at levels close to record highs. Last week, the Dow Jones Industrial Average rose 2.1 percent, the Standard & Poor's 500 Index rallied 2.7 percent and the Nasdaq Composite Index climbed 3.2 percent to its highest close in 15 years.
"The Federal Reserve's created a situation where there's very little alternative to equities, so the path of least resistance for stocks will be up for a period of time," Robert Lutts, president, chief investment officer at Cabot Money Management in Salem, Massachusetts, told Reuters.
In Europe, the Stoxx 600 Index climbed 1.9 percent last week, moving closer to its record high and bringing its advance for 2015 to 18 percent. Germany's DAX has risen 22.8 percent so far this year, while the UK's FTSE 100 Index has added 8.1 percent. The FTSE 100 on Friday topped 7,000 points for the first time.
Tim Courtney, chief investment officer of Exencial Wealth Advisors, agrees that stocks are the place to be.
"US equities and especially international equities, of all the alternatives, still look like the healthiest alternative," Courtney told Bloomberg. "Until another viable alternative comes about --that doesn't look like it's going to happen until rates start to rise -- stocks should do well
Investors will eye the state of the US housing industry from reports on existing home sales due today, and the FHFA house price index, and new home sales, due Tuesday.
The consumer-price index, due Tuesday, probably rose in February for the first time in four months, according to a Bloomberg survey, as the cost of gasoline increased.
Other reports scheduled for release this week include the Chicago Fed national activity index, due today; PMI manufacturing index, and Richmond Fed manufacturing index, due Tuesday; durable goods orders, due Wednesday; PMI services, weekly jobless claims, and Kansas City Fed manufacturing index; and GDP, as well as consumer sentiment, due Friday.
"Any piece of economic data that speaks to the pace of job creation or inflation will be watched very closely," Art Hogan, chief market strategist at Wunderlich Securities in New York, told Reuters.
Several Fed officials might offer fresh clues too. Today, Cleveland Fed President Loretta Mester will speak in Paris, while Fed Vice Chair Stanley Fischer will talk in New York. St Louis Fed President James Bullard is on a panel in London, on Tuesday, while Chicago Fed President Charles Evans will also speak, in London, on Wednesday.
Bullard will talk in Frankfurt, Germany, on Thursday, while Atlanta Fed President Dennis Lockhart will speak in Detroit, and on Friday Fischer will address a Bundesbank conference in Frankfurt.
The weaker US dollar helped oil post gains for the week, with Brent's front-month May contract adding 1.2 percent while US crude for April advanced 2 percent.
In Europe, fresh data scheduled for release include euro-zone consumer confidence, due today; euro-zone manufacturing and services PMI indices, due Tuesday; Germany's IFO business climate, due Wednesday; and Germany's GfK consumer sentiment, due Thursday.
Talks between Greece and its international lenders will also be closely watched as the clock towards a much-needed agreement on further financial support before it runs out of funds keeps ticking away.