Reports circulating on a European wide Greek bailout lift markets!

•  Yesterday's financial calendar was light with no major US announcements other than wholesale inventories which came in at -0.8% worse than expected. Ben Bernanke was scheduled to speak however the severe weather situation in the US was reason to postpone the hearing before Congress which was set to talk about exit strategies. No new date was announced however the prepared testimony will be released at 1500GMT today.
•  In Europe yesterday we saw tight trading in the EURUSD throughout the European trading session with a slight bias to the upside as news reports were suggesting Trichet's flight rescheduling to Europe was to discuss a Greek bailout. Later on in the day headlines were citing that the Euro zone had agreed in principal to aid Greece. The Euro immediately rallied to 1.3840 following the wires. Subsequently the rally faulted as more reports came in from a German Government spokesman saying that those reports are ''unfounded'' but did not deny the talks took place. The EURUSD then drifted back down below the 1.3800 and now the market is waiting to hear on more developments on the matter. CPI in Germany yesterday was 0.8% yy with the trade balance showing a EUR 13.5bln surplus. EURUSD price action was between 1.3641 - 1.3840.    
•  In Japan the Finance Minister Naoto Kan said that FX was behind the stock market fall recently and that no new negative factors have materialized in the Japanese economy. This shows that current JPY levels are uncomfortable for business. In China we saw exports surge by 21% for the month of January year on year, this can only increase pressure on the Chinese government to allow the Yuan to appreciate. Chinas inflation target is now 3% and speculation is increasingly mounting on further tightening measures by the PBoC. The USDJPY price action was between 89.20 - 90.01.
•  Today's financial calendar will be an exciting one as the BoE is set to release its quarterly inflation report. The report includes the BoE 2 year projection for growth and inflation which are the key factors shaping future BoE monetary policy. Ben Bernanke will release his exit strategy testimony at 15:00 GMT, the US trade balance is due and the weekly crude Oil inventories will shake the commodities markets as well today.

 Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.3695 with a preference to enter into long positions at 1.3705
• § The USDJPY pivot point is at 89.30 with a preference to enter short positions at 89.35

 Today's calendar and market movers:

• § United Kingdom BoE Quarterly inflation report is due
• § US Trade balance is due expected at $-35.8 bln
• § US Fed Ben Bernanke testimony on exit strategies is released
• § US weekly Crude Oil inventories is released expected to increase by 1.4 mln barrels

  Equity Markets:

•  US equities closed positive yesterday day with the DJIA and the SP500 closing 1.52% and 1.30% respectively.  The European burses were positive yesterday with the FTSE up 0.38% the DAX and the CAC closing positive at 0.24% and 0.15% respectively.  The NIKEI and the HSI at the time of righting is 0.31% and 0.67% respectively.