v US ISM Manufacturing, personal spending and personal income all unexpectedly slow;

v EUR remains lower after yesterday's heavily subscribed LTRO offering; funding constraints have eased, but the Eurozone economy continues to show signs of deterioration;

v JPY continues to grind lower against most of its counterparts after a report showed the influx of foreign investment slowing as risk appetite rebounds.

The USD is mixed this morning, paring early declines after US economic data fell short of expectations thus bolstering demand for the dollar's safe-haven status. US Personal spending expanded at a slower pace than expected, gaining only 0.2% versus the forecast for 0.4%. Meanwhile, personal income also gained by less than anticipated, posting a 0.3% rise after last month's 0.5% expansion. ISM manufacturing also unexpectedly declined this morning with the gauge dropping to 52.4 versus the forecasted gain to 54.5. The figure is at odds with recent regional data releases, but while auto sales and exports pushed higher, input costs are holding back further gains. Weekly jobless claims continued their slow grind lower, registering 351k this morning, down from 353k last week. While the improved readings are reflective of slow healing in the labor market, consumers remain apprehensive to open their wallets. As such, much attention will be paid to next week's all-important nonfarm payrolls and unemployment reports.

The EUR slowed its weekly declines this morning, but remains toward the lower end of its recent ranges against the dollar as investors are skeptical that the region will avoid further economic slowing. A study released this morning showed that the three-month cumulative sum of investment in the Eurozone bonds and money markets fell in December for the first time in a year. The ECB's LTRO operations have temporarily replaced those investment inflows, but further support from the central bank appears unlikely at this point. Nevertheless, the injection of relatively cheap ECB funding has given the Eurozone's struggling member nations a reprieve as sovereign debt yields fall. Italian 2-Yr government bond yields fell after the ECB offering yesterday to the lowest levels since November 2010. A report released this morning also showed that Eurozone unemployment continued to grind higher, rising to 10.7% from 10.4% in the previous reading. While funding concerns will likely continue to ease in the near term, the underlying economic deficiencies within the currency bloc will ultimately weigh on the EUR.

The GBP is higher this morning against both the USD and EUR as British policymakers become more outspokenly hawkish. BoE member Martin Weale told reporters this morning that he expects relatively high levels of inflation to continue for the foreseeable future, reducing the room the central bank has to increase stimulus further. A report also showed that UK property prices unexpectedly rose last month, suggesting that the British economy may be able to rebound before slipping back into recession.

The JPY is flat against the dollar, but generally lower versus most of its other counterparts as decent economic data saps demand for the yen's relative safety. While the ISM report out of the US fell short of expectations, China announced a pickup in its manufacturing industry for a third-straight month. Meanwhile, a Japanese government report showed that the inflow of foreign investments into short-term Japanese assets tumbled from JPY 925B in the previous reading to just JPY 75.7B as market risk sentiment improves.

The Commodity Currencies are collectively stronger this morning as gaining risk appetite supports the high-yielding currencies. Raw goods are generally higher with oil remaining above $107/bbl, gold rebounding to $1716/oz and copper rising to $391/lb. The CAD gained to a fresh five-month best against the USD this morning, supported by the higher price of oil, Canada's main export, and the generally improved outlook for the global economy. Similarly, the high-yielding AUD and NZD are benefitting this morning after the unexpected gain in manufacturing in China, the primary destination for Australian and New Zealand exports. The MXN is higher this morning after officials upped their inflation forecasts for the months ahead, prompting investors to increase bets that the central bank may raise interest rates in the near term.





































10-Year Treasury Yield:




 $ 1,719.20

 $ 10.10


 $ 392.80

 $ 4.85

Crude Oil: 

 $ 107.22

 $ 0.14





This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.