The Italian National Institute of Statistics (ISTAT) released labour market data on Wednesday. Italy's unemployment rate increased to 13.4% in November from 13.2% in October. That was the highest level since 1977.

The jobless rate among people between the age of 15 and 24 reached 43.9% in November.

Italian Prime Minister Matteo Renzi is pushing through reforms to help the labour market in Italy.

The German the Federal Statistics Office released its labour market data on Wednesday. The number of unemployed people in Germany declined by 27,000 in December, beating expectations for a 6,000 decline, after a 16,000 drop in November. November's figure was revised up from a 14,000 decrease.

Germany's adjusted unemployment rate fell to 6.5% in December from 6.6% in November. That was the lowest level since German reunification in 1990. Analysts had expected the unemployment rate to remain unchanged.

Employment is high in Germany and wages are increasing, while inflation is low.

The U.S. dollar traded higher against the most major currencies after the better-than-expected U.S. economic data. Private sector in the U.S. added 241,000 jobs in December, according the ADP report on Wednesday. November's figure was revised up to 227,000 jobs from a previous reading of 208,000 jobs. Analysts expected the private sector to add 227,000 jobs.

The U.S. trade deficit narrowed to $39.0 billion in November from a deficit of $42.2 billion in October. That was the lowest level since December 2013. October's figure was revised up from a deficit of $43.4 billion. Analysts had expected a trade deficit of $42.3 billion.

The decline of a deficit was driven by falling oil prices.

The Fed will release minutes of its last meeting. Investors expect signs when the Fed will start to hike its interest rate.

The euro traded lower against the U.S. dollar due to the weaker-than-expected inflation data from the Eurozone. The inflation declined to an annual rate of -0.2% in December from 0.3% in November. That was the lowest level since October 2009. Analysts had expected a flat reading.

The decline was driven by falling oil prices.

The inflation excluding food and energy costs increased to an annual rate of 0.8% in December from 0.7% in November.

These figures are adding to pressure on the ECB. Investors speculate that the European Central Bank could decide on its policy meeting on January 22 to purchase government bonds.

Eurozone's unemployment rate remained unchanged at 11.5% in November, in line with expectations.

The number of unemployed people in Germany declined by 27,000 in December, beating expectations for a 6,000 decline, after a 16,000 drop in November. November's figure was revised up from a 14,000 decrease.

Germany's adjusted unemployment rate fell to 6.5% in December from 6.6% in November. Analysts had expected the unemployment rate to remain unchanged.

German adjusted retail sales climbed 1.0% in November, exceeding expectations for a 0.2% rise, after a 2.0% gain in October. October's figure was revised up from a 1.9% increase.

Political uncertainty in Greece still weighed on the euro.

The British pound traded lower against the U.S. dollar in the absence of any major economic reports from the U.K.

The Canadian dollar traded lower against the U.S. dollar after the Canadian economic data. Canada's trade deficit widened to C$644 million in November from a deficit of C$327 million in October. October's figure was revised down from a surplus of C$99 million. Analysts had expected a trade deficit of C$0.2 billion.

The decline was driven by falling oil prices.

Canada's seasonally adjusted Ivey purchasing managers' index fell to 55.4 in December from 56.9 in November. Analysts had expected the index to decrease to 52.3.

The Swiss franc traded lower against the U.S. dollar. The Swiss National Bank's foreign exchange reserves increased to 495.104 billion Swiss francs in December from 462.669 billion francs in November. That is the result of the Swiss National Bank's (SNB) intervention in currency markets last month.

The New Zealand dollar fell against the U.S. dollar in the absence of any major market reports from New Zealand.

The Australian dollar traded lower against the U.S. dollar. In the overnight trading session, the Aussie traded mixed against the greenback. The Australian Industry Group's performance of services index rose to 47.5 in December from 43.8 in November.

The Japanese yen traded lower against the U.S. dollar in the absence of any major market reports from Japan.

Canada's seasonally adjusted Ivey purchasing managers' index fell to 55.4 in December from 56.9 in November. Analysts had expected the index to decrease to 52.3.

A reading above 50 indicates a rise in the pace of activity.

Seasonally adjusted inventories declined significantly to 41.7 in December from 50.8 in November.

Statistics Canada released the trade data on Wednesday. Canada's trade deficit widened to C$644 million in November from a deficit of C$327 million in October. October's figure was revised down from a surplus of C$99 million. Analysts had expected a trade deficit of C$0.2 billion.

The decline was driven by falling oil prices.

Exports decreased 3.5% in November. That was the biggest decline since January 2012. Exports of energy products declined 7.8%, while shipments of metal and non-metallic mineral products dropped 8.3%.

Imports fell 2.7% in November.

The U.S. Commerce Department released the trade data on Wednesday. The U.S. trade deficit narrowed to $39.0 billion in November from a deficit of $42.2 billion in October. That was the lowest level since December 2013. October's figure was revised up from a deficit of $43.4 billion. Analysts had expected a trade deficit of $42.3 billion.

The decline of a deficit was driven by falling oil prices.

Exports decreased 1.0% in November.

Exports to the European Union fell 7.7% in November. Exports to China declined 3.9%, while exports to Japan decreased 9.7%.

Imports dropped 2.2% in November. Petroleum imports reached the lowest level since August of 2009.

Private sector in the U.S. added 241,000 jobs in December, according the ADP report on Wednesday.

November's figure was revised up to 227,000 jobs from a previous reading of 208,000 jobs.

Analysts expected the private sector to add 227,000 jobs.

Official labour market data will be released on Friday. Analysts expect that U.S. unemployment rate is expected to decline to 5.7% in December from 5.8% in November. The U.S. economy is expected to add 241,000 jobs in December.

EUR/USD: $1.2000(E2.3bn)

USD/JPY: Y118.00($1.0bn), Y118.50($608mn), Y119.00($320mn), Y119.50($700mn), Y120.00($1.8bn)

EUR/GBP: stg0.7825(E911mn)

USD/CHF: Chf1.0000($285mn)

USD/CAD: C$1.1700($1.5bn)

The Swiss National Bank's foreign exchange reserves increased to 495.104 billion Swiss francs in December from 462.669 billion francs in November, according to data on Wednesday. That is the result of the Swiss National Bank's (SNB) intervention in currency markets last month.

The SNB capped the franc at 1.20 per euro in September 2011. It had intervened heavily in 2012 to defend the cap.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

07:00 Germany Retail sales, real adjusted November +2.0% Revised From +1.9% +0.2% +1.0%

07:00 Germany Retail sales, real unadjusted, y/y November +2.1% Revised From +1.7% -0.8%

08:00 Switzerland Foreign Currency Reserves December 462.4 495.1

08:55 Germany Unemployment Change December -16 -6 -27

08:55 Germany Unemployment Rate s.a. December 6.6% 6.6% 6.5%

10:00 Eurozone Unemployment Rate November 11.5% 11.5% 11.5%

10:00 Eurozone Harmonized CPI, Y/Y (Preliminary) December +0.3% 0.0% -0.2%

The U.S. dollar traded mixed to higher against the most major currencies ahead of the U.S. economic data. The U.S. economy is expected to add 227,000 jobs in December, according to the ADP employment report.

The U.S. trade deficit is expected to narrow to $42.3 billion in November from $43.4 billion in October.

The Fed will release minutes of its last meeting. Investors expect signs when the Fed will start to hike its interest rate.

The euro fell against the U.S. dollar after the weaker-than-expected inflation data from the Eurozone. The inflation declined to an annual rate of -0.2% in December from 0.3% in November. That was the lowest level since October 2009. Analysts had expected a flat reading.

The decline was driven by falling oil prices.

The inflation excluding food and energy costs increased to an annual rate of 0.8% in December from 0.7% in November.

These figures are adding to pressure on the ECB. Investors speculate that the European Central Bank could decide on its policy meeting on January 22 to purchase government bonds.

Eurozone's unemployment rate remained unchanged at 11.5% in November, in line with expectations.

The number of unemployed people in Germany declined by 27,000 in December, beating expectations for a 6,000 decline, after a 16,000 drop in November. November's figure was revised up from a 14,000 decrease.

Germany's adjusted unemployment rate fell to 6.5% in December from 6.6% in November. Analysts had expected the unemployment rate to remain unchanged.

German adjusted retail sales climbed 1.0% in November, exceeding expectations for a 0.2% rise, after a 2.0% gain in October. October's figure was revised up from a 1.9% increase.

Political uncertainty in Greece still weighed on the euro.

The British pound traded mixed against the U.S. dollar in the absence of any major economic reports from the U.K.

The Canadian dollar traded mixed against the U.S. dollar ahead of Canadian economic data. The Canadian trade surplus of C$0.1 billion in October is expected to narrow to a deficit of C$0.2 billion in November.

The Ivey purchasing managers' index is expected to drop to 52.3 in December from 56.9 in November.

The Swiss franc traded lower against the U.S. dollar. The Swiss National Bank's foreign exchange reserves increased to 495.104 billion Swiss francs in December from 462.669 billion francs in November.

EUR/USD: the currency pair declined to $1.1818

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair rose to Y119.34

The most important news that are expected (GMT0):

13:15 U.S. ADP Employment Report December 208 227

13:30 Canada Trade balance, billions November 0.1 -0.2

13:30 U.S. International Trade, bln November -43.4 -42.3

15:00 Canada Ivey Purchasing Managers Index December 56.9 52.3

19:00 U.S. FOMC meeting minutes

23:30 U.S. FOMC Member Charles Evans Speaks

EUR/USD

Offers $1.2200, $1.2150, $1.2125/20, $1.2100, $1.2000

Bids $1.1800, $1.1700

GBP/USD

Offers $1.5545, $1.5485, $1.5430, $1.5400, $1.5320/00

Bids $1.5100, $1.5000

AUD/USD

Offers $0.8250, $0.8200, $0.8165/60, $0.8100

Bids $0.8035, $0.8000, $0.7950

EUR/JPY

Offers Y146.00/05, Y145.50, Y145.30, Y144.15, Y143.00

Bids Y141.40, Y141.00

USD/JPY

Offers Y121.85, Y121.50, Y121.20, Y120.90/00, Y119.90

Bids Y118.05, Y118.00, Y117.00, Y116.80

EUR/GBP

Offers stg0.7900, stg0.7880/85, stg0.7875

Bids stg0.7800, stg0.7755/50, stg0.7745, stg0.7720, stg0.7700, stg0.7680

Eurostat released its inflation data fort the Eurozone on Wednesday. The inflation declined to an annual rate of -0.2% in December from 0.3% in November. That was the lowest level since October 2009.

Analysts had expected a flat reading.

The decline was driven by falling oil prices. Energy prices dropped 6.3% in December.

The inflation excluding food and energy costs increased to an annual rate of 0.8% in December from 0.7% in November.

The European Central Bank's (ECB) inflation target is close to but below 2%.

These figures are adding to pressure on the ECB. Investors speculate that the European Central Bank could decide on its policy meeting on January 22 to purchase government bonds.

EUR/USD: $1.2000(E2.3bn)

USD/JPY: Y118.00($1.0bn), Y118.50($608mn), Y119.00($320mn), Y119.50($700mn), Y120.00($1.8bn)

EUR/GBP: stg0.7825(E911mn)

USD/CHF: Chf1.0000($285mn)

USD/CAD: C$1.1700($1.5bn)

Japan's Abe: may be able to declare end of deflation if wages rise

(Reuters) - Japanese Prime Minister Shinzo Abe said on Wednesday he may be able to declare that Japan has broken free from a long phase of deflation if companies continue to raise wages.

Abe also said he hopes that by improving the economy Japan will be able to contribute to global growth.

Source: http://www.reuters.com/article/2015/01/07/us-japan-economy-abe-idUSKBN0KG0LV20150107

BLOOMBERG

SNB Interventions Boost Currency Reserves to Record High

The Swiss National Bank's foreign-currency reserves hit a record in December after an appreciation of the franc forced the institution to end a two-year hiatus in interventions.

Holdings increased to 495.1 billion francs ($490 billion) from a revised 462.7 billion francs in November, the central bank based in Zurich and Bern said on its website today. The holdings are calculated according to International Monetary Fund standards at the beginning of every month.

The SNB said on Dec. 18 that it had resumed purchases of foreign currencies after the franc hit its strongest since 2012 amid a weakening of the Russian economy and the prospect of more euro-area stimulus by the European Central Bank. It imposed a negative deposit rate to stave off capital inflows and lowered its target range for three-month franc Libor to reinforce its three-year-old minimum exchange rate of 1.20 per euro.

Source: http://www.bloomberg.com/news/2015-01-07/snb-interventions-boost-currency-reserves-to-record-high-1-.html

BLOOMBERG

Global Crude Falls Below $50 as U.S. Supply Seen Adding to Glut

Oil fell below $50 a barrel in London for the first time since May 2009 amid speculation that U.S. inventories will increase, exacerbating a global supply glut that's driven prices to a five-year low.

Brent futures dropped as much as 2.3 percent for a fifth day of losses. Crude stockpiles in the world's biggest consumer probably expanded by 700,000 barrels last week, a Bloomberg News survey showed before an Energy Information Administration report today. China, the second-largest oil user, won't drive a market rebound in 2015 as its net imports will slow, according to Citigroup Inc.

Source: http://www.bloomberg.com/news/2015-01-07/oil-trades-near-48-as-u-s-stocks-seen-adding-to-global-glut.html

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

07:00 Germany Retail sales, real adjusted November +1.9% +0.2% +1.0%

07:00 Germany Retail sales, real unadjusted, y/y November +1.7% -0.8%

The greenback traded broadly stronger against its major peers ahead of the minutes from December's Federal Reserve policy meeting due later in the day at 19:00 GMT. The minutes may give further indication on the FED's 'patient' approach on rising benchmark interest rates for the first time since 2006.

Earlier in the session data on Eurozone's Unemployment Rate and Harmonized preliminary CPI are due. The figures are expected to show the first annual decline in consumer prices in the Eurozone since 2009 which would add pressure on ECB to start quantitative easing measures rather sooner than later. Mario Draghi's comments last week, that he can't rule out the risk of the deflation in the Eurozone and a possible 'Grexit', Greece's exit from the Eurozone if anti-austerity parties win in the upcoming elections also weigh on the single currency.

The Australian dollar fell against the greenback on Wednesday despite an upbeat AIG Services Index. The Index published yesterday at 23:30 GMT rose from a reading of 43.8 in November to 47.5 in December gaining 3.7 points.

New Zealand's dollar lost some of its yesterday's gains against the greenback trading at USD0.7740.

The Japanese yen traded weaker during the Asian and fell from a 3-week high against the U.S. dollar being currently quoted around USD119 as Asian stocks stabilized and dampened investors demand for a haven.

EUR/USD: the euro continued to slump against the greenback

The most important news that are expected (GMT0):

(time / country / index / period / previous value / forecast)

07:00 Germany Retail sales, real adjusted November +1.9% +0.2%

07:00 Germany Retail sales, real unadjusted, y/y November +1.7%

08:00 United Kingdom Halifax house price index December +0.4% +0.3%

08:00 United Kingdom Halifax house price index 3m Y/Y December +8.2%

08:00 Switzerland Foreign Currency Reserves December 462.4

08:55 Germany Unemployment Change December -14 -6

08:55 Germany Unemployment Rate s.a. December 6.6% 6.6%

10:00 Eurozone Unemployment Rate November 11.5% 11.5%

10:00 Eurozone Harmonized CPI, Y/Y (Preliminary) December +0.3% 0.0%

13:15 U.S. ADP Employment Report December 208 227

13:30 Canada Trade balance, billions November 0.1 -0.2

13:30 U.S. International Trade, bln November -43.4 -42.3

15:00 Canada Ivey Purchasing Managers Index December 56.9 52.3

15:30 U.S. Crude Oil Inventories December -1.8

19:00 U.S. FOMC meeting minutes

23:30 U.S. FOMC Member Charles Evans Speaks

EUR / USD

Resistance levels (open interest**, contracts)

$1.2107 (1708)

$1.2025 (3158)

$1.1967 (680)

Price at time of writing this review: $ 1.1872

Support levels (open interest**, contracts):

$1.1823 (2377)

$1.1785 (2708)

$1.1742 (1525)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 70160 contracts, with the maximum number of contracts with strike price $1,2500 (6645);

- Overall open interest on the PUT options with the expiration date January, 9 is 63362 contracts, with the maximum number of contracts with strike price $1,1900 (6467);

- The ratio of PUT/CALL was 0.90 versus 0.95 from the previous trading day according to data from January, 6

GBP/USD

Resistance levels (open interest**, contracts)

$1.5400 (848)

$1.5301 (1763

$1.5204 (336)

Price at time of writing this review: $1.5131

Support levels (open interest**, contracts):

$1.5096 (934)

$1.4999 (409)

$1.4900 (224)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 31224 contracts, with the maximum number of contracts with strike price $1,5850 (4020);

- Overall open interest on the PUT options with the expiration date January, 9 is 23327 contracts, with the maximum number of contracts with strike price $1,5500 (2692);

- The ratio of PUT/CALL was 0.75 versus 0.77 from the previous trading day according to data from January, 6

* - 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.

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

EUR/USD $1,1888 -0,37%

GBP/USD $1,5150 -0,63%

USD/CHF Chf1,0100 +0,33%

USD/JPY Y118,40 -1,03%

EUR/JPY Y140,77 -1,40%

GBP/JPY Y179,36 -1,69%

AUD/USD $0,8082 +0,01%

NZD/USD $0,7760 +0,98%

USD/CAD C$1,1835 +0,63%

(time / country / index / period / previous value / forecast)

07:00 Germany Retail sales, real adjusted November +1.9% +0.2%

07:00 Germany Retail sales, real unadjusted, y/y November +1.7%

08:00 United Kingdom Halifax house price index December +0.4% +0.3%

08:00 United Kingdom Halifax house price index 3m Y/Y December +8.2%

08:00 Switzerland Foreign Currency Reserves December 462.4

08:55 Germany Unemployment Change December -14 -6

08:55 Germany Unemployment Rate s.a. December 6.6% 6.6%

10:00 Eurozone Unemployment Rate November 11.5% 11.5%

10:00 Eurozone Harmonized CPI, Y/Y (Preliminary) December +0.3% 0.0%

13:15 U.S. ADP Employment Report December 208 227

13:30 Canada Trade balance, billions November 0.1 -0.2

13:30 U.S. International Trade, bln November -43.4 -42.3

15:00 Canada Ivey Purchasing Managers Index December 56.9 52.3

15:30 U.S. Crude Oil Inventories December -1.8

19:00 U.S. FOMC meeting minutes

23:30 U.S. FOMC Member Charles Evans Speaks