Overall, the majors moved lower in the Asian session, but to some extent, managed to find a bottom during the early part of the European trading session. The momentum has been weak, as there were no important economic news releases to influence the market during the overnight session. As such, the market has been driven by risk aversion/acceptance, dictated by the U.S. futures.

The Euro (Eur/Usd) fell 80 pips, down to the neutral pivot point (1.2890). From here, the euro struggled to find a direction to trade in during the European session. Currently, the euro is trading just below the 20-day simple moving average, which has held the pair since the beginning of the year.

The German trade balance surplus remained steady at 10.7B in December, the lowest level reached since June 2003. The previous number, for the month of November, was revised to 10.9B. The Sentix reading resumed its downward path, after improving last month for the first time in six months. The index fell 1.7 points from January, to -36.1. The Euro-zone's assessment is in-line with the other important regions.

The Pound (Gbp/Usd) tried, in the first part of the Asian session, to break above Friday's high, but failed to do so. During the latter part of the Asian session, the pair moved lower, down to the neutral pivot point (1.4740). In the European session, the pound strengthened slightly, regaining some of the lost pips.

The Aussie (Aud/Usd) struggled to break below the 50-day simple moving average both in the Asian and in the European trading sessions. In addition, the aussie is now trading caught between the 50 and 100-day simple moving averages, something that could prove very volatile later in the day, if the pair tries to break free from this area.

The Cad (Usd/Cad) broke 50 pips below Friday's low, but the market retraced the move very quickly. From there, the pair rose steadily, gaining about 100 pips by the middle of the European session. In the last few weeks, the cad has traded in a 300-pip range.

The Swissy (Usd/Chf) tried, in the early Asian session, to break below the 1.5880 area, but could not move anywhere lower. Soon after, the swissy started to move higher, following the same direction of trading as in the last period.

The Yen (Usd/Yen) fell to TheLFB S1 (91.00) in the overnight session, 100 pips lower than the Sunday open and managed to bottom, before retracing some of the declines. The yen traded in-line with the S&P futures in the overnight session.

Machinery orders for Japan fell by 1.7 percent in December, which is much better than the 8.6 percent fall that analysts had been expecting. This is third continuous month in which machine orders fell. Japan's current account for the month of December came in at 500 million yen, which was slightly lower than November's 600 million.

European Markets Open Lower As Problems Persist

Current Futures: Dow -72.50, S&P -10.50, NASDAQ -10.75

European Trade: European stocks opened slightly below the break-even line, while Asian markets closed lower, despite posting strong gains intra-session. During the overnight session, U.S. futures continued to point to a lower opening on Wall Street.

A Bloomberg report shows that the U.S. government may be forced to put GM and Chrysler into bankruptcy, in order to recover a $17.4 billion in loans. For now, the U.S. Government needs to stay in line to collect money, after a number of banks were bailed out by the Government, to recover its debt in case the two car manufacturers go into bankruptcy.

If the Government and the private investors do not reach an agreement, the U.S. authorities might be tempted to call for a debtor in possession bankruptcy procedure, which would make the Government the first in-line to see its debt repaid. Currently, GM has a $45.16B debt, while its current market cap is $1.73B. In case the Government has no other choice and would eventually call for the bankruptcy procedures, the labor market will be hit very hard, again.

Remaining in the car-industry, Toyota announced an 83.2 billion yen, or $0.9B, loss in the quarter ending in December, and said that the company had been forced to shed 20.000 jobs, or about 8% of its global work force. Nissan sales fell by 18.6% in the fourth quarter, compared with one year earlier.

The U.K. Ftse fell 0.40 points (0.01%) to 4,291.47, while the German Dax lost 17.57 points (0.38%) to 4,627.06.

Crude oil broke below the $40 benchmark level overnight. Crude oil for March delivery fell $0.70 to $39.60.

Gold has traded in the same range lately even though the dollar has seen some large swings. Bullion for immediate delivery fell $2.10 to $904.50.

Previous Asian trade: Tonight the Nikkei shed 107.59 points (1.33%) to 7,969.03. The Australian S&P/Asx rose 38.70 points (1.12%) to 3,508.60.