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By Alfonso Esparza

This week the central banks from several major economies will step to the plate to try to push their individual agendas. Policy is not expected to change much, but the rhetoric can have long lasting implications.

The Reserve Bank of Australia will publish its minutes from the early March policy meeting on Monday. On March 4 the RBA held the Australian rate steady at 2.5%. This week's minutes are expected to return to the AUD overvalued narrative as more exporters are pressuring the central bank after the currency continues to trade over 0.90. Expect further comments on the Australian employment front. Housing and exports are recovering, but unemployment continues to rise which might delay the RBA to follow in the footsteps of the Reserve Bank of New Zealand and raise rates.

In the last minutes the RBA was puzzled as to the sudden rise in inflation in the last quarter of 2013 and changed its stance to neutral indicating a more stable economy. In regards to unemployment it labeled it a lagging indicator and given the overall recoveries in major economies does not worry the bank too much.

Earlier today the Japanese government continued its upbeat assessment of the economy. The current geopolitical climate has appreciated the yen, undoing some of the work of the Bank of Japan who might me forced to act to reaffirm the First of Prime minister Abe's arrows.

Fundamentally the Japanese economy has benefited from the lower yen and there are signs of industrial and demand recovery. The sales tax which comes into effect next month could have deep implications in what up to now has resulted in a moderate pace of inflation.

The situation in Ukraine, the slowdown of the Chinese economy and the US Federal Reserve new chair's first FOMC have appreciated the JPY. The Japanese government downgraded its biggest trading partners: China and the US. The first due to the slowdown in exports and the second one due to the effects of the harsh winter.

Bank of Japan governor Kuroda speaks on Wednesday and could shed some insights on what the current global economic outlook could mean for the BoJ's 2 percent inflation target and if more action is needed sooner rather than later.

US President Obama imposed sanctions on seven Russian government officials and Ukraine's former president. This set of sanctions bring back Cold War era memories due to their scope. The European Union was in agreement with the US regarding the sanctions and issued its own after the vote in Crimea effectively opened the door for the region to join Russia.

Safe haven appetite and geopolitics have not impacted the EUR/USD due to the fact that commodities were reporting healthy inventories before the crisis. The US Federal Reserve and the European Central Bank have had more of an effect on the pair this year. This week marks the first FOMC under Janet Yellen as chair. She is expected to change some of the rhetoric of her predecessor. In that she might approach more of Greenspan's lack of transparency than the forward guidance championed by Bernanke. Unemployment will not be such a clear cut indicator and Yellen's Fed will probably not commit to a single reading to base its actions.

Germany has posted strong indicators that have been able to offset the rest of Europe's lagging economies. The ZEW which measures the economic sentiment of institutional investors will be released tomorrow. Last month it posted a below expectations figure of 55.7 which is slightly better than the six month low of 52.8 seen last October. The main difference then was that last year those figures were beating expectations upward as the forecast was negative. This time last month the market was expecting a slight decline and the ZEW came in well below the 61.3 forecast. The latest figure will be released tomorrow.

The euro continues to ride higher today after suffering a slight setback as the February's CPI figures. Inflation in the eurozone continues to drop. Year over year came in at 0.7% which put into perspective European Central Bank President Mario Draghi's words about what the strong euro was doing to price inflation. Higher than current levels could spark action from the ECB to avoid the EU falling into deflation.

Source: Forex Global Central Bank Week Kicks Off In Australia