• JP Dec Machine Orders -1.7% m/m vs -16.2% m/m prior; -26.8% y/y vs -27.7% y/y prior
  • JP Jan M3 +0.9% y/y vs revised +0.7% y/y prior
  • JP Dec c/a balance at JPY125.4b vs JPY350b f/c, JPY581.2b prior
  • AU Jan overall Job Advertisements -6.3% m/m s/a, -33.7% y/y


  • German Trade Balance (0700)
  • German C/A Balance (0700)
  • Denmark Trade Balance (0830)
  • UK Final Money Supply (0930)
  • Canada Housing Starts (1315)

Market Comments

It would appear that all hopes are now resting on the passing of the US stimulus bill through Senate and Congress after markets ignored the worst US non-farm payroll numbers in 34 years and instead looked ahead to this week's events. US Treasury secretary Timothy Geithner was supposed to present the details of his financial sector stability plan today, but this has been postponed until 1600GMT Tuesday to allow lawmakers to focus on debating the huge stimulus package ahead of a planned vote on Tuesday. Latest market chatter is that the Treasury's latest financial plan would include an expanded loan facility that will purchase newly-issued and newly-rated commercial mortgage-backed securities and private-label mortgage-backed securities. In addition, efforts to remove toxic assets from banks' balance sheets are expected to be confirmed and increased stakes in banks by the state together with guarantees for banks on certain losses are expected to be included.

There was a host of opinion/commentary available on European interest rates over the weekend as the market's attention switches to the March meeting. ECB's Wellink commented that the central bank was adopting a wait and see attitude on whether interest rates could be lowered further while Bini Smaghi added that cutting rates close to zero would be a pointless exercise if those cuts were not passed on by the commercial banks. Does not look so hopeful for a 'drastic' rate cut of more than 50bp. Meanwhile, IMF's Strauss-Kahn was also of the opinion that there was room for the ECB to cut rates but was uncertain whether this would be useful.

If the market is currently looking for a positives in data releases, there were some minor positive surprises in Japanese data today. The decline in machinery orders slowed to -1.7% m/m in Dec from -16.2% m/m in Nov, although the narrowing of the decline on an annual basis was a less-striking -26.8% y/y vs -27.7% y/y in Nov. Analyst commentaries on the data series were more reticent in calling the 'improvement' a turning point, and as has been noted in recent months, the market showed little reaction.

Later in the week, after (hopefully) all the US plans and packages had been finalized, attention switches to the Bank of England's quarterly inflation report due Wednesday. No doubt the BOE is expected to slash its growth forecasts from the already downbeat 1.3% for 2009 made last November, but also may indicate how quickly it will bring rates close to the zero mark and how soon the quantitative easing, the buying of assets under the GBP50 bln Asset Purchase Facility scheme already announced by the Treasury, would be implemented. Unemployment data also due on Wednesday is expected to dash any positive vibes from the PMI release last week, with median forecasts suggesting a further 88k more jobs lost, though some estimates suggest this could be above the 100k mark. Watch this for signs of a halt to the recent bullish tone to GBP.

Dwindling employment prospects were also evident in a minor report released in Australia, where job advertisements were 6.3% lower than a month earlier in Jan and down a whopping 33.7% from a year ago.

There is a risk that the series of dire economic data from Canada will extend into this week when January housing starts are released later today. This comes hot on the heels of last Friday's disastrous employment report which saw job losses in January more than 3 times that expected.

Apart from the Canada data, there are no scheduled releases for North America today. Attention will be purely focused on developments in the Senate deliberations on the stimulus package.