AUS Retail Sales Up 0.1%

Australian retail sales rose in November, backed by sharp reduction in the country's base interest rate, heavy discounts at retailers and falling gas prices. The retail sales trend series increased 0.1%, as Australians bought more food, though they shopped less at department stores. Meanwhile, new home sales fell 1.1% according the Housing Industry Association, a disappointing result considering the reduction in interest rates and the increased money given by government to first-time home owners.

NZ Trade Balance Better Than Expected

The New Zealand trade balance improved in November, beating expectations, as both exports and imports fell on the month, but imports fell by a larger amount. The monthly trade balance amounted to a deficit of NZ$520 million. The value of imports has declined as oil prices have gone down, helping to put the deficit at its lowest level since the June period of last year.

AUD/USD - Aussie Retraces Part of Recent Rally

The Aussie stalled today near the 0.7270 level against the greenback following a climb from 0.6850 we saw the last 4 sessions. Today's intra-day high was the highest the Australian Dollar has been since October 14th and comes against a more long term level of resistance.

AUD/JPY - Aussie Falls vs Yen as European and US Stocks Stumble, Oil Falls

The Aussie was also lower against the Yen in today's trading, reversing the gains seen yesterday. Though stocks were up in Japan and Sydney, which usually favors risk appetite and carry trade, traders in Europe and America sold down their shares and commodities fell sharply. Traders in Europe were taking profits following a strong start of the year, while US stocks faltered in the face of a weak private-sector jobs report. The Aussie slid 200 pips against the Yen.

GER Unemployment Up 18K in December

The German economy saw an uptick in unemployment in December, the first time unemployment rose in almost 3 years. In addition to the pressures on the financial sector from the fallout of the financial crisis, a drop in demand from key trading partners for German exports is squeezing revenue and profit margins for large firms. In response they are cutting jobs, and may reflect the start of a new trend of higher unemployment. The unadjusted unemployment rate climbed from 7.1% to 7.4%, with the seasonally adjusted rate up to 7.6%.

EUR Producer Prices Tumble 1.9% in November

In the Euro-zone, producer prices plunged 1.9% in November, as oil prices tumbled during that month. That pushed the annual rate down to a gain of 3.3% from 6.3% in October, and down from a peak of 9.0% in July. Producer prices can usually be used as a leading predictor of consumer prices, which signals that prices are falling faster than expected.

UK BRC Retail Sales Slows to 0.5%

In the UK, the BRC shop prices index reported annual inflation slowing to 0.5% from 2.7% in November, as prices retreated 2% on the month. The sharp deceleration reflects unprecedented levels of discounting along with a reduction in the value added tax.

EUR/GBP - Pound Continues Gaining on Euro

The Euro-Pound pair, which has been falling fast the last two sessions, consolidated around the 0.9050 level, saw a retracement upward to 0.9170, but then fell again, establishing new support below our consolidation level. By New York trading the Pound was stronger than the Euro, extending its gains.

GBP/USD - Pound Surges 400 Pips vs Greenback

The Pound-Dollar had another sharp gain in today's trading following a retest of the 1.48 level. The Pound surged 400 pips higher, breaking through resistance at 1.50 at the start of the NY session. The Pound is seeing some strength this week as traders believe that the UK economy may start to see some recovery from its recession earlier than anticipated.

US ADP Employment Change Drops By Record in December

Companies in the US cut 693,000 jobs in December, the most since records began in 2001, a private report based on payroll data showed. The decline was larger than expectations and bodes ill for the non-farm payroll jobs report that is on tap for Friday. With the recession picking up steam in the 4th quarter, companies are laying off workers in an attempt to cut down on costs. Employment among smaller firms and medium sized firms, those with less than 500 workers, led the decline the report showed as the recession hits more and more services.

EUR/USD - Euro Gain, Bouncing Up From 1.33

The Euro-Dollar pair rose today, breaking the gains for the greenback we have seen the first two sessions of this week. The jobs data weighed on the greenback, though the pair did find some resistance near 1.3750. It remains to be see if today's action is a retraction or the start of more general strength for the Euro.

USD/JPY - Greenback Falls vs Yen as Stocks Slide Sharply

The poor US jobs data pressured stocks with the Dow Jones index off 250 points in the late NY afternoon. Weak performance from European stocks as well, hurt the Dollar against the Yen. The pair fell 150 pips during the session, about a 50% retracement from the recent 4-session uptrend.
Upcoming Releases

Tonight, Australia will release data on construction, building approvals and its trade balance. Overnight, Switzerland posts its CPI and unemployment Rate.

Overnight, Germany release data on factory orders and trade, the Euro-zone posts its end of the month sentiment indicators along with the unemployment rate.

Tomorrow early in the morning, the Bank of England will decide on interest rates, with expectations currently of a 50 basis point cut. Also tomorrow, the US will release weekly jobless claims data and figures on consumer credit. Canada, meanwhile posts its Ivey PMI.