• The USD is trading mixed as equity markets decline and China raises reserve requirements 50bps points, the rise in China's reserve requirements is a prelude to a possible rate hike and generates concern about the sustainability of the global recovery, JPY initially pressured by a statement from a Chinese sovereign fund official that the JPY will continue to fall, JPY recovers supported by a rebound in cross trade and a spike in risk aversion, GBP supported by report a smaller than expected UK trade deficit as exports surged, EUR drifted lower pressured by selling in cross trade to the GBP and JPY sparked by report that China takes measures to curb lending, commodity currencies pressured by a spike in risk aversion as equity markets decline and in reaction to weaker commodity prices, commodities were pressured by China's move to curb credit, AUD pressured by report of weaker than expected housing approvals data, US equities pressured by report of disappointing earnings from Alcoa, crude is trading over one dollar a barrel lower
• Focus turns to today's release of US and Canadian trade balance
• Chinese SWF official says USD has hit bottom, JPY will continue to fall, the SWF official expects China and the US hike interest rates in H2, Moody's officials expressed concern about Kan's appointment as finance minister in Japan, Japan's November current account surplus widens to ¥1.103trln, December money supply rose by 3.1%, JPY higher
• UK December RICS house price balance falls to +30, December BRC retail sales rose by 4.2%, global trade balance narrows to 6.78bln from 7.016bln last month, UK election polls indicate that the Tories are heading for 60 seat majority in parliament, GBP higher
• Australia's November housing finance declined by 5.6%, AUD lower
• VIX (volatility index) at it lowest level since May 2008
• US Personal bankruptcies rose nearly a third in 2009
• US equity markets set to open lower, European equities 1.25% lower, Nikkei closed 81 points lower

Upcoming Events

• US - Tuesday, November trade balance will be released expected at -34.5bln compared to -32.94bln last month
• CAN - Tuesday, November trade balance will be released expected at 0.60bln compared to 0.43bln last month

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