Asian stocks declined the most since November as Goldman Sachs' profits failed to beat estimates and China data could see pressures on the Asian region. The MSCI Asia Pacific Index slid 1.2%, Nikkei dropped 1.13%, Hang Seng dropped 1.26% and Shanghai Composite dropped 2.3%. Economic news from China showed that GDP grew at 9.8% (YOY) against expectation of 9.4% growth, inflation was as expected at 4.6% (YoY), industrial production jumped 13.5% (YoY) and retail sales rose 19.1% (YoY). This news has added pressure on the Chinese government to step in and possibly take additional tightening measures and there are speculations that China may increase rates by 1% to 6.81% this year and let the Yuan strengthen 6% after the currency has been trading at 17-year highs.

EURUSD dropped to 1.3460 after rising to 1.3539 yesterday, highest since Nov. 23 after three days of gains as Asian stocks declined on speculation that China will take more steps to cool growth in the economy, boosting demand for the Dollar as a safe haven, USDJPY traded at 82.10. The Dollar strength could be hampered as expectations for today's continuing claims are to rise, weakening the Dollar on faltering labor market in the US showing that jobless claims dropped 20,000 to 425,000 but total claims rose to 3.99 million while on the other hand, existing home sales could rise 4.5% to 4.89 million which could see further strength in the currency.

Today's economic calendar would shift focus to the US with more earnings reports expected and US releases jobless claims, continuing claims and existing home sales data along with Philadelphia Fed manufacturing and leading indicators data. We are expecting earnings data from Morgan Stanley, Google Inc., AMD which could also have an impact on the direction of the US stocks and the Dollar.

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