meanwhile the U.S. dollar and the Japanese Yen extended their gains against major currencies.

Gold prices also rose yesterday as investors were seeking a hedge against the current uncertainty over the outlook for global growth and accordingly they headed back to their safe heaven, on the other hand oil prices dropped blow $50 per barrel on pessimism over the outlook for global demand.

Meanwhile Moody’s Investors Services announced yesterday that the number of companies that defaulted on their debt obligations rose in March to the highest level since the Great Depression, leading to increased speculations that the credit crisis will continue to show further destruction in the upcoming period.

Japan released earlier today, the Eco Watchers survey for the month of March, the current conditions index rose to 28.4 from the prior estimate of 19.4 and above median estimates of 20.9, while the outlook index rose to 35.8 from 26.5 reported back in February.

Meanwhile Germany released the trade balance for the month of February, the trade surplus widened to 8.7 billion euros from the prior revised surplus of 7.0 billion, as imports fell 4.2% and exports fell 0.7%.

Meanwhile the current account also widened in Germany during February, as the surplus widened to 5.6 billion euros from the prior revised estimate of 2.3 billion yet was slightly below median estimates of 5.8 billion.

The rising trade surplus doesn’t reflect a strengthening economy but rather signal that domestic demand is indeed weakening, as tightened credit conditions and rising unemployment are indeed weighing down on economic growth in Europe’s largest economy.

Germany will also release the factory orders index for the month of February, factory orders are expected to have dropped by 2.1% following the prior drop of 8.0 percent, while compared with a year earlier factory orders dropped by 36.5% following the prior drop of 37.9%.

The Euro extended its losses against the U.S. dollar for a third day, as the pair dropped to the $1.31 levels and is still expected to drop further today, the pair might be heading towards the $1.30 levels, though we don’t expect a breach for now, but we believe the pair will drop below the $1.30 level over the short term.

Moving across the Ocean, where Canada will release its housing starts for the month of March, housing starts are expected to drop to 130,000 from the prior revised estimate of 134,700.

Meanwhile the U.S. will release the wholesales inventories for the month of February, as the index is expected to drop by 0.7% inline with the prior reported drop back in January.

Finally, the Federal Open Market Committee will release their Minutes for their 17-18 March meeting, in which the FOMC decided to start purchasing long term treasuries, as they aim to reduce long term interest rates through pumping further liquidity into the financial system.

Meanwhile stock markets are still expected to drop further, especially as gloom is still dominating financial markets, meanwhile investors are seeking low risk investments that can protect them against the current uncertainty and rising volatility in global financial markets.