Thursday was a generally calm day as traders appeared to become weary of hearing the constant barrage of bad new and economic data.

Asia showed that it is very much a part of the global problem with South Korea announcing a 5.6% contraction, the Bank of Japan forecast 2 years of deflation and there were rumors that the IMF is on the brink of downgrading Australia's growth outlook for 2009 to a negative number.

Euro Zone industrial orders fell by 26.2% (YoY) while the UK CBI industrial trends survey dropped from -35 to -48, the lowest since 1992. UK banking stocks remain under severe pressure and there are increasing expectations that there will be nationalizations in the sector in the coming months.

There was also a dark cloud over proceedings in the US as Microsoft announced disappointing earnings and a cut in their workforce by 5,000. This sent their shares down 10% and helped push the Dow Jones Index down for the day aided by some extremely poor US housing figures.

The market seems a little punch drunk after events since the start of 2009. It is hard to envisage a situation where traders would be shocked by bad news in the short term.

Session in Asia this morning was extremely subdued with traders preparing for a very quiet week, next week, thanks to the Chinese New Year celebrations. Stocks came under pressure thanks to the falls on the Dow et al yesterday with some position cleaning ahead of the calm and illiquid time next week.

EUR/USD and GBP/USD both began very quietly over Asia time zone but have slowly and steadily succumbed to selling pressure, reputedly from a UK clearer.

Sterling and Euro remain in range this morning as markets await important economic data from Europe today. In the UK, the preliminary 4Q08 GDP is anticipated to have contracted -1.2% following a decline of -0.6% in 3Q08. Two consecutive quarters of contraction will confirm technical recession in UK.

On annual basis, the UK economy is expected to shrink -1.4%, the largest drop since 1991. Retail sales is expected to dropped -0.6 mom in Dec. GBP/USD is bounded in tight range after hitting a 23 year low of 1.3621 earlier this week, drawing support from 2001 low of 1.3680. Markets seem to be waiting for today's data for either a strong breakout or rebound.

To be released later today, Canada's inflation continues to ease in December with the CPI anticipated to come in at -0.4% mom from -0.3% in the previous month. On yearly basis, the gauge should have slowed from 2.0% to 1.4%.

Concerning core CPI, the reading is expected to have dropped -0.2% mom and rose 2.4% yoy. In the January Monetary Report released yesterday, BOC forecasts total CPI will dip below 0% for 2 quarters in 2009 due to decline in energy prices.