Japan - Core Machinery Orders Surprise

Japanese machinery orders climbed 9.7% in June, the first increase in the last four months. That figure was higher than expectations, but was mainly boosted by a purchase of equipments to general nuclear power. On the year orders are still down 29.7%.

Japan - Current Account Widens

The Japanese current account surplus more than doubled from a year earlier to 1.15 trillion yen ($11.8 billion), while on a seasonally adjusted basis it widened for a fifth month to 1.799 trillion yen. Exports rose 6.3%, while imports fell 2.2%, helping to boost the trade balance within the current account. If demand is returning for Japanese goods it would be a major boost to a manufacturing base that has been anemic throughout the global recession.

Japan - Eco Watcher Survey Edges up to 22-Month High

The Japanese Economy Watchers Index edged up to a 22-month high of 42.4 in July from 42.2 in June. This however was less than the 43.4 economists had expected. Prime Minister Taro Aso's 25 trillion yen stimulus is keeping sentiments afloat but there is gloom ahead as salaries are being cut and the jobless rate is climbing.

Australia - Home Loans up for 9th Month in a Row

In Australia, low mortgage rates and encouraging government loans pushed home loans up for the ninth month in a row, albeit at a slower pace than economists forecasted. The RBA has kept rates at 3.00% and government grants of A$21,000 for first time buyer. This helped push the number of new housing finance commitments up 1.1% to 65,151, according to the Australian Bureau of Statistics.

Eurozone - Sentix Investor Confidence Improves

The European session had but one important release. July's Sentix Investor Confidence Index rose from a -31.3 in July to -17.0, the highest level since August 2008. The improvement was better than the expected rise to -25.9. The current conditions sub index also rose, from -53.75 to -39. The expectations subindex showed a positive reading of 8, up from a -5.5 in July.

GBP/USD - Worst not Over for the UK

The Cable declined today, continuing the decline that started last Thursday when the Bank of England planned to expand its quantitative easing efforts. This suggested that the worst may not be over. Since Thursday, the GBP/USD pair has declined about 600 pips from the 1.7050 area to the 1.6450 area.

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EUR/USD - Continues to Decline among Risk Aversion

The EUR/USD pair also continued Friday's decline. After reaching a 2009 high last week around 1.4445, the pair declined due to greenback strength. That greenback strength came from better than expected jobs data, but today's euro weakness was due to risk aversion. With the US stockmarket declining broadly to start the week, the pair continued to slide another 100 pips in the New York session.

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USD/CAD - Loonie Lower Vs. Greenback for 4th Day in a Row

The USD/CAD pair continued its rally for the 4th straight day of increase today. Friday's increase was due to USD strength, while today's rally was based on risk aversion. After the congestion pattern to start the week, the pair rose 120 pips in the New York session.

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GBP/JPY - Uptrend Inviolate Despite Reversal

The yen gained today due to the risk aversion as traders seek refuge in the Japanese currency and unwind carry trade pairs such as GBP/JPY and EUR/JPY. For the GBP/JPY pair, today's price action almost completely pares Friday's rally. However this more than 300 pip decline does not violate its most recent uptrend, as it has not created a lower low compared to Friday's action.

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Tonight's Releases

Tonight, the UK releases BRC Retail Sales and RICS House Price Balance. Also, the National Australian Bank releases its business confidence index. Then the Bank of Japan meets to discuss its monetary policy. Japan also releases a measure of household confidence

Tomorrow's Releases

In the next European session, Germany will reveal the final data on consumer price inflation, and a wholesale price index. We will also see British Trade Balance, and the DCLF House Price Index. In the US session, there will be preliminary nonfarm productivity and unit labor cost data. This will be followed by data on wholesale inventories.