• The USD is trading lower as the impact of China tightening fades, GBP is supported by hawkish comments from BOE's Sentance, Sentance said UK interest rates may have to increase this year, EUR trades higher despite report of weaker than expected German 2009 GDP with support from Asian central bank demand, commodity currencies rebound as equity markets stabilize in Europe and the US, JPY traded lower pressured by the diminished fear that China's monetary tightening will derail global growth, JPY also pressured by BOJ ease speculation
• Focus turns to today's release of US Treasury budget and Feds Beige book
• Reuters reports that the BOJ may ease monetary policy if government pressure for BOJ ease continues and the economy weakens, JPY lower
• UK November manufacturing output was unchanged, industrial output rose by 0.4%, BOE''s Sentance says CPI did not decline as much as expected, nearing point where stimulus is enough, not time for withdrawal, may have to increase interest rates this year, GBP higher
• German 2009 GDP at -5%, revised from 4.8% estimate, EUR higher
• Feds Plosser says the economy is emerging from recession, Fed may have to hike interest rates as economy continues to improve, must hike rates before jobless as at acceptable levels
• The Fed made $52bln in profit on government securities bought to try and stabilize the financial system, the profits will be returned to the Treasury
• The number of job seekers still outnumber the number of available jobs in the US by 6 to 1 according to the Labor Department, job openings are at record low and have dropped 50% in two years
• US Chamber of Commerce warns of double dip recession because of Dem polices of taxes and new regulations
• The White House says the stimulus plan has saved up to 2mln jobs
• US equity markets set to open slightly higher, European equities mixed, Nikkei closed 144 points lower

Upcoming Events

• US - Wednesday, December Treasury budget will be released expected at -92bln compared to -51.7bln last month and the Fed's Beige book
• CAN - Wednesday, no major Canadian economic data is due for release today

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