• China passes Germany to become world’s number 1 exporter.
  • Chinese Finance Minister Xie Xuren says that China will extend economic policies into 2010 to aid global recovery. An early exit could prove harmful.
  • Bankruptcy looms for Japanese Air Lines (JAL) as the market awaits the outcome of pension cuts accepted by the company’s retirees. The majority has accepted the pension cuts but JAL is till waiting to hear from those already retired as to whether they will accept a cut in their pension. If the company fails to win the support of the retirees it will probably be the nail in the coffin for JAL and they will be forced to file for bankruptcy.
  • Australian Job Market looking up as the number of advertised jobs continues to increase. In December ads increased overall by 6.0 % m/m (Internet +11.6 % Newspapers +5.6 %) from 5.2 % in November.
  • UK Prime Minister Gordon Brown making election plans will attempt to rally his Labour Party later today following last weeks unsuccessful attempt by some party members to have a secret leadership ballot to oust him as their leader. He will later outline his strategy for the party to win the General Election to be held later this year. His theme in the speech later today, and I guess it will be his rally call through the election campaign, is rumoured to be “We can beat them, we must beat them and we will beat them”.
  • St Louis Fed President James Bullard said in remarks on a speech he is to deliver in Shanghai that while the pace of job losses has slowed he still expects to see positive job growth in 2010. Housing markets and consumption have stabilized and also says that “the forces driving the US economy recovery include stronger than expected growth especially in Asia”.

Currencies

  • Asia picked up the same play book from Friday following the weaker than expected jobs data and sold the dollar. In thin trading markets, due to the Japanese National holiday, Euro broke through key resistance levels triggered stops through 1.4480 and continued to strengthen throughout the session, posting a high of 1.4533. Euro eased off toward the latter part of the session on profit taking to a shade under 1.4500.
  • Dollar Yen initially sold off from its 92.60 opening level and has since settled into a tight 92.20 – 92.30 range.
  • Cable range 1.6045 – 1.6105
  • Dollar – Swiss briefly traded higher to 1.0240 before gradually moving lower through the session, as the dollar weakened, to a low of 1.0135
  • Aussie spurred on throughout the session by strong Chinese export data, a strong gold price and an encouraging ANZ advertised jobs report showing continued signs of revival in the jobs market in Australia. Aussie strengthened from 0.9277 to a session high of 0.9317 against the dollar. Kiwi traded a range of 0.7386 – 0.7415.

Rates as at 12.00 am

EUR/USD 1.4497/00 USD/JPY 92.28/31 GBP/USD 1.6086/90 USD/CHF 1.0172/76 USD/CAD 1.0270/74 AUD/USD 0.9304/08 NZD/USD 0.7398/03 EUR/JPY 133.78/81 EUR/GBP 0.9010/14

Gold 1152.00/80

Oil 83.48

Dollar Index 77.24 (-0.415)