(pare/closed(GMT +2)/change, %)

EUR/USD $1,0713 +1,05%

GBP/USD $1,2413 +2,96%

USD/CHF Chf1,0014 -1,03%

USD/JPY Y112,61 -1,40%

EUR/JPY Y120,64 -0,33%

GBP/JPY Y139,78 +1,61%

AUD/USD $0,7565 +1,19%

NZD/USD $0,7214 +1,57%

USD/CAD C$1,304 -1,03%

07:00 Germany CPI, m/m (Finally) December 0.1% 0.7%

07:00 Germany CPI, y/y (Finally) December 0.8% 1.7%

09:00 Switzerland World Economic Forum Annual Meetings

09:30 United Kingdom Average earnings ex bonuses, 3 m/y November 2.6% 2.6%

09:30 United Kingdom Average Earnings, 3m/y November 2.5% 2.6%

09:30 United Kingdom Claimant count December 2.4 5.0

09:30 United Kingdom ILO Unemployment Rate November 4.8% 4.8%

10:00 Eurozone Harmonized CPI December -0.1% 0.5%

10:00 Eurozone Harmonized CPI, Y/Y (Finally) December 0.6% 1.1%

10:00 Eurozone Harmonized CPI ex EFAT, Y/Y (Finally) December 0.8% 0.9%

13:30 U.S. CPI, m/m December 0.2% 0.3%

13:30 U.S. CPI, Y/Y December 1.7% 2.1%

13:30 U.S. CPI excluding food and energy, m/m December 0.2% 0.2%

13:30 U.S. CPI excluding food and energy, Y/Y December 2.1% 2.2%

14:15 U.S. Capacity Utilization December 75.0% 75.4%

14:15 U.S. Industrial Production (MoM) December -0.4% 0.6%

14:15 U.S. Industrial Production YoY December -0.6%

15:00 Canada Bank of Canada Rate 0.5% 0.5%

15:00 Canada BOC Rate Statement

15:00 U.S. NAHB Housing Market Index January 70 69

16:15 Canada BOC Press Conference

19:00 U.S. Fed's Beige Book

21:00 U.S. Net Long-term TIC Flows November 9.4 21.3

21:00 U.S. Total Net TIC Flows November 18.8

21:30 New Zealand Business NZ PMI December 54.4

21:45 New Zealand Building Permits, m/m November 2.6%

A weaker dollar and jitters about the U.K.'s exit from the European Union helped lift gold to a two-month high on Tuesday, says Dow Jones.

Gold gained 1% to $1,216.38 a troy ounce in midmorning trade, on course for its highest close since Nov. 16, ahead of a speech from Prime Minister Theresa May at 11:45 GMT that is expected to flesh out her plan for bringing the U.K. out of the bloc.

"Depending on how confrontational May's line proves vis-à-vis the EU, gold could be in considerable demand during the course of the day," wrote analysts at Commerzbank.

Mrs. May is set to declare that Britain doesn't want "partial membership" in the EU "or anything that leaves us half-in, half-out," according to excerpts of a speech released by her office.

• Possible Monetary Policy Could Be Affected for Some Time by Uncertainty Over Fiscal Policy, Effects on Economy

• Many Sources of Uncertainty Affecting Trajectory of U.S. Economy, Monetary Policy

• Has Been Speculation About Significant Changes to Fiscal Policy of Late

• Magnitude, Composition, Timing of Any Fiscal Changes as Yet Unknown

• Even Once Any Changes Enacted, Uncertainty Will Remain About Effects on Economy

• Additional Fiscal Demand Will Likely Result in Inflationary Pressures When Economy Close to Full Employment, Inflation Near Target

Business activity continued to grow modestly in New York State, according to firms responding to the January 2017 Empire State Manufacturing Survey.

The headline general business conditions index was little changed at 6.5. The new orders index fell to 3.1, pointing to a small increase in orders, and the shipments index held steady at 7.3.

Inventories edged higher for the first time in more than a year. Labor market conditions remained weak, though less so than in recent months, with manufacturers reporting a slight decline in employment and somewhat shorter workweeks.

Both input prices and selling prices increased more rapidly this month, with the prices paid index climbing to its highest level in nearly three years, and the prices received index also jumping to a multiyear high.

EUR/USD 1.0500 (EUR 2.42bln) 1.0600 (505m) 1.0700 (2.41bln) 1.0800 (281m) 1.0850 (690m)

USD/JPY 115.00 (USD 1.3bln) 116.00 (700m) 117.00 (420m) 117.25 (380m) 118.00 (839m)

USD/CAD 1.3245 (USD 300m) 1.3300 (1.26bln)

NZD/USD 0.7005 (NZD 173m)

"The USD may replace its reflation related bid with safe haven related demand. This scenario suggests the JPY staying correctively strong for now,gaining on many crosses, while GBP and high yielding currencies may be hit as political and currency related concerns increase.

Deflation tends to increase real yields of low yielding currencies, suggesting USDJPY may drift towards our 112.50 target. However, GBPUSD breaking lower will undermine any bid in EURUSD too. This applies even more when following the Carney argument of seeing a failure of UK-EMU negotiations leading to a disproportional increase in inner EMU financial stability risks. Peripheral spreads quietly workinghigher supports Carney's view.

Meanwhile, Greece could move quickly back into focus should the IMF opt-out require new negotiations with Greece and a new approval by the German Bundestag according to Germany's Schaeuble. Accordingly, there could be a new programme implying additional fiscal measures and further

We used the recent rally in EURUSD to add a short position from 1.0650 to our portfolio. Our arguments for a weaker EUR have not changed. In the absence of further political integration, the ECB may have to remain accommodative to support the struggling periphery even as the core overheats drastic reforms in Greece. The issue becomes even more complicated when we put the views of the incoming US administration into Europe's context".

Copyright © 2017 Morgan Stanley, eFXnews

EUR/USD

Offers: 1.0680 1.0700 1.0725-30 1.0750 1.0785 1.0800

Bids: 1.0625-30 1.0600 1.0580 1.0565 1.0550 1.0520 1.0500

GBP/USD

Offers: 1.2150 1.2175-80 1.2200 1.2225-30 1.2250 1.2280 1.2300

Bids: 1.2100 1.2080 1.2050-60 1.2030 1.2000 1.1975-80 1.1950 1.1930 1.1900

EUR/GBP

Offers: 0.8800 0.8820-25 0.8850 0.8880 0.8900

Bids: 0.8780 0.8755-60 0.8720-25 0.8700 0.8685 0.8665 0.8650

EUR/JPY

Offers: 121.00 121.30 121.50 121.80 122.00

Bids: 120.50 120.00 119.75 119.50 119.00

USD/JPY

Offers: 113.50 113.80 114.00 114.30 114.601 14.80 115.00 115.20 115.50

Bids: 113.00 112.80-85 112.65 112.50 112.20 112.00 111.80 111.50

AUD/USD

Offers: 0.7550-55 0.7575-80 0.7600 0.7630 0.7650

Bids: 0.7520 0.7500 0.7480-85 0.7450 0.7430 0.7400

• Theresa May said she would like to see the UK after Brexit more unified, focused on the outside world

• Would not want to further disintegration of EU

• Brexit is not a rejection of the values ​​that are shared by the United Kingdom and the EU

• Great Britain does not want to build a relationship with the EU, which will be based on partial membership

• Negotiations on Brexit require compromises, mutual concessions

European stock markets traded in the red due to the mining and automotive sectors. Market participants are waiting for British Prime Minister Theresa May's speech about the position of London in the negotiations on the withdrawal from the EU (Brexit), as well as the meetings of the European Central Bank, which will be held on Thursday.

The risks of a recession in the UK over the next 12 months fell to levels seen prior to the June referendum: economists estimate a probability of 20% compared to 30% in December and a record 50% in August.

The composite index of the largest companies in the region Stoxx Europe 600 down 0.4%, to 361.54 points, after falling 0.8% on Monday, which was the most significant fall since November

Price of Rio Tinto shares fell 1.3% in London trading after the publication of mining data.

The stock price of British American Tobacco has decreased by 0.3%. BAT buys Reynolds for $ 49.4 billion, enabling it to become the largest tobacco company in the world.

Meanwhile, Rolls-Royce market value jumped by 5.5%. British Engineering Holding agreed to pay 671 million pounds (over $ 800 million) to regulators in Brazil, the UK and the US as part of the settlement of corruption cases.

Deutsche Lufthansa shares rose 3.8% on reports that Etihad Airways may buy from 30% to 40% of the company.

The capitalization of Deutsche Bank rose 0.4% on rumors that the bank will refuse to pay annual bonuses.

Shares of Swiss chocolate maker Lindt rose by 6.9%, as the company was able to increase sales in Europe, Japan and Brazil..

At the moment:

FTSE 7298.26 -28.87 -0.39%

DAX 11446.39 -108.32 -0.94%

CAC 4848.14 -34.04 -0.70%

Housing market indicators for November suggested a period of modest increasing demand and steady growth in price levels. House prices grew by 6.7% in the year to November, 0.3 percentage points higher than October.

According to the Bank of England's Agents' summary of business conditions, for the final quarter of 2016 (October to December) , housing market activity has recovered following a period of weakness after the EU referendum and stamp duty changes but remains weak in central London.

The ZEW Indicator of Economic Sentiment for Germany has increased slightly in January 2017. The index has improved by 2.8 points compared to December, now standing at 16.6 points.

"The slight increase of the ZEW Indicator of Economic Sentiment is mainly due the improved economic situation across European countries. The fairly good preliminary figures recorded for the development of the German GDP last year, as well as for the industrial production of the eurozone in November 2016, came as a surprise to many. This improvement in expectations can thus also be seen as a leap of faith for 2017," comments ZEW President Professor Achim Wambach,PhD.

The annual rate of producer price inflation continued to grow in December 2016, although mainly as a result of falling prices a year ago, as growth was relatively flat on the month.

Factory gate prices (output prices) rose 2.7% on the year to December 2016 and 0.1% on the month, which was the sixth consecutive period of annual growth and the eleventh of monthly growth.

Prices for materials and fuels paid by UK manufacturers for processing (input prices) rose 15.8% on the year to December 2016 and 1.8% on the month.

The Consumer Prices Index (CPI) rose by 1.6% in the year to December 2016, compared with a 1.2% rise in the year to November.

The rate in December was the highest since July 2014, when it was also 1.6%.

Price movements for the majority of the broad groups of goods and services acted to increase the rate between November 2016 and December 2016.

The main contributors to the increase in the rate were rises in air fares and the price of food, along with prices for motor fuels, which fell by less than they did a year ago.

CPIH (not a National Statistic) rose by 1.7% in the year to December 2016, up from 1.4% in November.

Credit standards for loans to enterprises broadly stabilising.

Continued easing of credit terms and conditions across all loan categories.

Easing impact of TLTROs on credit standards increased.

According to the January 2017 bank lending survey (BLS), credit standards (i.e. banks' internal guidelines or loan approval criteria) for loans to enterprises tightened somewhat in net terms in the fourth quarter of 2016 (a net percentage of 3%, compared with 0% in the previous quarter), driven mainly by developments in the Netherlands. This was the first net tightening since the fourth quarter of 2013 and was broadly in line with expectations in the previous survey round.

Today the Bank of Japan has published its decision to maintain its economic outlook in six of the nine regions of the country. Only 3 of the region differ from their preliminary assessment. Central Bank raised its estimate of Tohoku, Kanto-Koshinetsu and Tokai. All three regions have revised upward its estimates for private consumption. In addition, the decline in emerging economies died down a bit, which is likely to increase demand for the products of Tohoku region and Kanto-Koshinetsu. Meanwhile, the remaining six regions reported that their assessment about the pace of economic improvement remained unchanged.

According to data released today by the Ministry of Economy, Trade and Industry of Japan, industrial output, seasonally adjusted, rose in November 1.5% after flat in the previous month.

Shipments grew by 1%, which was slightly higher than the previous growth of 0.9%. At the same time, inventories fell by 1.6%, which was revised to 1.5% in the preliminary data.

On an annual basis, industrial production rose in November by 4.6%, after rising by 1.4% in the previous month. The data also showed that the capacity utilization rate increased by 3.0% on a monthly basis.

The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.6%. Investment housing commitments rose 1.7%, while owner occupied housing commitments was flat.

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 2.2%.

In trend terms, the number of commitments for owner occupied housing finance fell 0.1% in November 2016.

In trend terms, the number of commitments for the purchase of new dwellings rose 0.7%, the number of commitments for the construction of dwellings rose 0.2%, and the number of commitments for the purchase of established dwellings fell 0.2%.

EUR/USD

Resistance levels (open interest**, contracts)

$1.0780 (2217)

$1.0745 (2213)

$1.0703 (254)

Price at time of writing this review: $1.0661

Support levels (open interest**, contracts):

$1.0541 (1263)

$1.0488 (2433)

$1.0422 (3270)

Comments:

- Overall open interest on the CALL options with the expiration date March, 13 is 53315 contracts, with the maximum number of contracts with strike price $1,1500 (3335);

- Overall open interest on the PUT options with the expiration date March, 13 is 62630 contracts, with the maximum number of contracts with strike price $1,0000 (4911);

- The ratio of PUT/CALL was 1.17 versus 1.18 from the previous trading day according to data from January, 13

GBP/USD

Resistance levels (open interest**, contracts)

$1.2412 (334)

$1.2316 (528)

$1.2221 (222)

Price at time of writing this review: $1.2115

Support levels (open interest**, contracts):

$1.1987 (2202)

$1.1890 (3233)

$1.1792 (1011)

Comments:

- Overall open interest on the CALL options with the expiration date March, 13 is 17747 contracts, with the maximum number of contracts with strike price $1,2800 (3018);

- Overall open interest on the PUT options with the expiration date March, 13 is 21484 contracts, with the maximum number of contracts with strike price $1,1500 (3223);

- The ratio of PUT/CALL was 1.21 versus 1.25 from the previous trading day according to data from January, 13

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.