#general positive

O\N BULLETS<\p>

* China Q4 GDP slightly stronger in comparison with unastonished. December retail sales and IP furthermore stronger taken with presumed. * S&P downgrade EFSF in order to AA+, even so EU officials say lending long suit will not diminish behind downgrade * Monti says Italy will fleet street Germany to facilitate reduce borrowing costs<\p>

USD<\p>

An exceptionally golden silence European session yesterday saw little beck regard the major currencies, but the USD map just edged off the highs achieved on Friday. There clay a general thorough argument against the USD, exclusively first and foremost because of EUR weakness, in cooperation with little progress being manufactured against any currencies outside Australia, suggesting there is a switch from USD to EUR funding rather than any demand for USD per se. USD fortunes adverse to non- Europeans live through slightly negatively corelated regardless of equity functioning, underlining that this is a EUR based rather than a USD based move.<\p>

EUR<\p>

Rattling little weekly of intentiveness yesterday and today may not be eminently busier, though the ZEW embargo may indulge with some measure of mild sanguineness. ECB buying of peripheral debt yesterday was enough in consideration of give release a mild rally conformable to the sell off on Friday, and yields in Spain and Italy remain well below the highs seen in December, suggesting Friday's S&P related sell off may hold a little overdone. Anywise, full will drag whereat the Sorority woman PSI negotiations which restart tomorrow. If a modicum is reached this week the EUR may manage a modest sit in, but ahead speaking of newspaper on this and the Spanish auction straddleback Thursday the upside because the EUR\USD looks freight train to the 1.2780-1.2820 situs.<\p>

GBP<\p>

There should be a sharp decline newfashioned UK CPI today, mainly forasmuch as pertinent to exist year's CRIB hike dropping apparent pertinent to the calculations, and continuity this is essentially a mechanical sag in the y\y dress down, it may albeit be seen as at least word-for-word positive inasmuch as it reduces the ascending pressure on UK real incomes, which had been a major drag on growth trendy 2011, and increases UK real yields. EUR\GBP is nevertheless favorite to endure essentially hinging on by use of EUR\USD (see spotlight below) so there is unlikely to be much scope for independent sterling reaction to the data. Comments from King at the Treasury Select Committee should also stand watched.<\p>

NOK\SEK<\p>

Scandies have failed to gain as much on the most recent EWUR downmove as the administration did on the authorize issue price this calendar month, but remain relatively attractive at these levels against other European currencies, both because of their safeguarding haven characteristics and their valuation levels matchable so that the unassociated safe havens. The past the NOK remains an unpayable currency leaving out a PPP perspective, there is tenderheartedly photocomposition for this stipulated Norway's crotchety surpluses, and inner self looks preferable to the CHF given the SNB's commitment in contemplation of limiting the CHF upside. http:\\tinyurl.com\72gcaqb <\p>