20/12

G10 Advancers and Decliners vs USD

NZD 0.48 AUD 0.43 CHF 0.38 GBP 0.32 JPY 0.32 NOK 0.24 SEK 0.12 CAD 0.11 EUR 0.07 DKK 0.06

Global indexes Current level % Change

Nikkei 225 Index 10'216.41 - 0.85 Hang Seng Index 22'517.51 - 0.87 Shanghai Index 2'852.92 - 1.41 FTSE 100 Index 5'871.75 - 0.16 DAX Index 6'982.45 - 0.61 SMI Index 6'538.16 - 0.43 S&P future 1'243.91 + 0.08

World markets Current level % Change

Gold 1'386.70 + 0.82 Silver 29.34 + 0.63 VIX 16.11 - 7.36 Crude wti 88.17 + 0.17 USD Index 80.43 + 0.09

Todays calender Estimates Previous Country / GMT

ECB Current Account, €bn sa Oct --- -13.1 EUR/09:00 Wholesale sales, % m/m Oct 0.8 0.4 CAD/13:00 "Flash" consumer confidence index Dec -9.0 -9.4 EUR/15:00 Currency Tech R 2: 1.3500  R 1: 1.3380  EURUSD: 1.3165 S 1: 1.3125 S 2: 1.3060 R 2: 85.40  R 1: 84.50  USDJPY: 83.90 S 1: 82.85 S 2: 82.35 R 2: 1.5765  R 1: 1.5655 GBPUSD: 1.5535 S 1: 1.5450  S 2: 1.5400 AUDUSD  R 2: 1.0100 R 1: 1.0030 CURRENT: 0.9895 S 1: 0.9835 S 2: 0.9750 Market Brief Asian markets were on a downward slide as South Korea restarted drills in their waters and concerns of threat by North Korea to retaliate and US debts increased as a safe haven bet with Dollar rising. With the USD rising against major currencies on speculation of positive economic growth, the MSCI Asia Pacific index fell 0.7%, Nikkei dropped 0.8%, Hang Seng dropped 1% and Shanghai Composite dropped 2%. There are wide spread concerns of tightening regulations in China as the government may increase interest rates to tame inflation levels with the benchmark index falling 14% this year and expectations for inflation to rise to 5% - 6% in 2011. The EURUSD earlier fell to 1.3125, weakest since Dec. 2 as European stocks fell on Dec. 17 on concern that some EU nations will be unable to repay their debts, after Moody’s cut Ireland’s credit rating by five levels and the ECB said it has “serious concerns” that legislation introduced by the Irish government to fix its banking system threatens the ECB’s ability to run its liquidity operations. The US economy probably expanded 2.8% YOY in Q3 due on Dec. 22 while personal spending increased 0.4% due on Dec. 23 thus leading to Dollar gaining traction among other currencies as USDJPY traded at a high of 84.12, GBPUSD traded at a low of 1.5455 and Gold traded at support of $1385. In other news, the BOE stated that it will start raising interest rates in six months to curb inflation levels by 0.25% every three months from Q2 2011 upto mid-2012 to end 2012 with 2.75% interest rate. BOE policy makers remain divided over the need to curb inflation or increase bond purchases to counteract the effect on the economy of the government’s fiscal squeeze. Inflation accelerated to 3.3% in November, surpassing the government’s 3% limit for a ninth month while expected inflation to be 2.4% by end of 2012. Policy makers also said that the economy will grow 0.6% in Q4 2010 before slowing down to 0.2% by Q1 2011. Today’s economic calendar remains thin with German producer prices and EU current account while tomorrow’s focus would be on BOJ interest rate decision and any accompanying statement.