Stock indices closed lower after the World Bank lowered its global economic forecast. The World Bank cut its global economic growth forecast for 2015 and 2016 on Tuesday. This decision was driven by disappointing economic outlook in the Eurozone, Japan and some major emerging economies.

The World Bank expects that the global economy would grow 3% in 2015, down from its June forecast of 3.4%. The global growth will reach 3.3% in 2016, down from a June forecast of 3.5%. The global economy is expected to grow 3.2% in 2017.

The European Court of Justice (ECJ) said on Wednesday that Outright Monetary Transactions (OMT) bond-buying programme was legitimate and in line with monetary policy. The opinion was non-binding. A final decision is expected in the next six months.

The OMT programme was has been announced in September 2012. The programme allows the ECB to purchase government bonds of Eurozone members if they request help. The OMT programme has never been used.

The opinion by the ECJ probably paved the way for the launch of bond-buying programme by the European Central Bank.

The European Central Bank President Mario Draghi in an interview to the German newspaper Die Zeit released on January 14, 2015 that "all members of the Governing Council of the ECB are determined to fulfil our mandate". He added that the ECB's options were limited.

Industrial production in the Eurozone rose 0.2% in November, exceeding expectations for a flat reading, after a 0.3% rise in October. October's figure was revised up from a 0.1 increase.

On a yearly basis, Eurozone's industrial production fell 0.4% in November, beating expectations for a 0.9% drop, after a 0.8% gain in October. October's figure was revised up from a 0.7 increase.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,388.46 -153.74 -2.35%

DAX 9,817.08 -123.92 -1.25%

CAC 40 4,223.24 -67.04 -1.56%

Oil prices retreated from a session low, but still continue to show a moderate decline. Support oil had weaker dollar on the report on retail sales. Meanwhile, the growth of prices holding back a report on US crude stocks.

As previously reported, the US retail sales fell in December by 0.9% compared to the previous month. This is the maximum reduction from January 2014. Analysts had expected the rate increase by 0.2%. We also add that in November, according to revised data, retail sales rose by 0.4%, not 0.7% as previously indicated. Drop in sales last month was noted in 9 of the 13 major categories of retail goods, including electronics and clothing. According to experts, Americans prefer to postpone, rather than spend the money saved on the fall in fuel prices. To increase consumer demand in the United States requires further improvement in the labor market, as well as an increase in salaries. By the end of 2014 total retail sales in the US rose by 4%.

As for the report on reserves, it has shown that commercial oil reserves in the US last week rose to 5389 thousand. Barrels - up to 387,782 million barrels. Gasoline inventories rose by 3,171 thousand. Barrels and amounted to 240,334 million barrels. Commercial distillate inventories rose by 2,925 thousand. Barrels, reaching 139,851 million barrels. Economists had expected an increase of oil reserves by 1750 thousand. Barrels, gasoline inventories increase at 3,750 th. Barrels and distillate stocks increase for 2100 thousand. Barrels.

Market participants also analyzed the last monthly report from the US Department of Energy on the short-term prospects for the oil market. According to analysts, this year the average price of WTI crude oil amount to 54.58 dollar against 93.26 dollars in 2014. December forecast assumes that the average price of WTI crude oil this year reached 62.75 dollars. Ministry unveiled forecasts for 2016. It is expected that next year the average price of WTI crude oil amount to $ 71.

In addition, the Ministry of Energy expects the average price of Brent crude oil in 2015 and in 2016 reached 57.58 dollars and $ 75, respectively, against 99.02 dollars last year. December forecast assumes that the average price of Brent crude oil will make 68.08 dollars this year.

Impact on world oil prices also continued to weak outlook from Goldman Sachs. Bank experts expect lower prices for WTI at six months and a year to 39 and 65 dollars per barrel 75 and $ 80 per barrel, respectively. Forecasts for Brent reduced to $ 43 per barrel for six months and $ 70 per barrel for the year to 85 and $ 90 per barrel, respectively. Analysts Societe Generale also worsened the outlook for oil prices in 2015: $ 15 - up to $ 55 per barrel.

The cost of the February futures on US light crude oil WTI (Light Sweet Crude Oil) dropped to 45.90 dollars per barrel on the New York Mercantile Exchange.

February futures price for North Sea Brent crude oil mix fell $0.38 to $ 46.33 a barrel on the London Stock Exchange ICE Futures Europe.

The U.S. dollar traded mixed to lower against the most major currencies after the weaker-than-expected U.S. retail sales. The U.S. retail sales unexpectedly dropped 0.9% in December, missing expectations for a 0.2% increase, after a 0.4% gain in November. November's figure was revised down from a 0.7% rise.

Retail sales excluding automobiles fell 1.0% in December, missing forecasts for a 0.1% gain, after a 0.1% gain in November. November's figure was revised down from a 0.5% increase.

The decline was driven by gasoline station sales.

The U.S. business inventories rose by 0.2% in November, in line with expectations, after a 0.2% gain in October.

The euro traded higher against the U.S. dollar, recovering its losses after the ruling of European Court of Justice (ECJ) on Wednesday. The ECJ said that Outright Monetary Transactions (OMT) bond-buying programme was legitimate and in line with monetary policy. The opinion was non-binding. A final decision is expected in the next six months.

The OMT programme was has been announced in September 2012. The programme allows the ECB to purchase government bonds of Eurozone members if they request help. The OMT programme has never been used.

The opinion by the ECJ probably paved the way for the launch of bond-buying programme by the European Central Bank.

The European Central Bank President Mario Draghi in an interview to the German newspaper Die Zeit released on January 14, 2015 that "all members of the Governing Council of the ECB are determined to fulfil our mandate". He added that the ECB's options were limited.

Industrial production in the Eurozone rose 0.2% in November, exceeding expectations for a flat reading, after a 0.3% rise in October. October's figure was revised up from a 0.1 increase.

On a yearly basis, Eurozone's industrial production fell 0.4% in November, beating expectations for a 0.9% drop, after a 0.8% gain in October. October's figure was revised up from a 0.7 increase.

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

The New Zealand dollar traded higher against the U.S. dollar in the absence of any major economic reports from New Zealand. In the overnight trading session, the kiwi traded mixed against the greenback. Falling oil prices weigh on the kiwi.

The Australian dollar traded higher against the U.S. dollar. In the overnight trading session, the Aussie traded lower against the greenback in the absence of any major economic reports from Australia. Falling oil prices weigh on the Aussie.

The Japanese yen traded mixed against the U.S. dollar. In the overnight trading session, the yen traded higher against the greenback due to risk aversion.

Japan's preliminary machine tool orders fell to 33.8% in December from 36.6% in November.

Gold prices today rose markedly, reaching with 12-week high, as the sharp fall in the stock markets and commodity markets prompted investors to buy the metal as a safe haven. Also affected the course of trading weakening of the US currency.

"Gold retreats slightly due to the elimination of positions in commodity markets in general," - said a trader in Sydney, adding that the precious metal will meet technical resistance at $ 1,244. "Prices could rise due to instability in the stock markets, but it will not be easy. In the near future quotations may fall to $ 1,220, then return to growth."

Concern in the financial markets has intensified after the World Bank has lowered growth forecasts for 2015 and 2016, while noting that the improvement of the US economy and low fuel prices could not compensate for the disappointing results in Europe and China. In 2015, the world economy will grow by 3% compared with an earlier forecast of growth of 3.4% in June. Meanwhile, the lender raised its forecast for US economic growth this year to 3.2% from 3% in June. According to forecasts, the euro zone economy will grow by 1.1% in 2015 compared with 1.8% expected in June earlier. China's growth was 7.1% compared to 7.2% projected in October and 7.5% in June. Japan's economy will grow by 1.2% compared to 1.3%, as mentioned in June. WB also reduced the forecast of world economic growth in 2016 to 3.3% from 3.5%.

As for the dollar, it has now reached a four-week low against the yen, which was associated with the release of disappointing data on US sales. It is learned that US sales in the retail trade and restaurants fell by a seasonally adjusted 0.9% in December compared with a month earlier. It was the largest monthly decline since January 2014. Excluding sales of gasoline purchases fell 0.4%, while expenses decreased by 1% except for the volatile categories of vehicles. Economists had expected overall sales to grow by 0.2%, while sales excluding autos will rise by 0.1% in December. For the entire 2014 sales were up 4%. It was a bit weaker than the 4.1% growth in 2013 and the lowest annual growth since the recession ended in 2009. Falling gasoline prices played a role in the index for 2014. With the exception of gasoline, retail sales rose by 4.8% last year.

On the physical gold market buyers have become more cautious after the price was not retained on the highs of the previous session. Mark-ups in China, the largest consumer of gold fell to $ 3 per ounce to the global benchmark from $ 04.05 on Tuesday.

The cost of the February gold futures on the COMEX today rose to 1238.00 dollars per ounce.

The Philadelphia Fed President Charles Plosser said on Wednesday that the Fed should hike its interest rate sooner rather than later as the U.S. economy has improved considerably.

Plosser believes that inflation will increase toward the Fed's 2% target as oil prices begin to recover.

He also said that the Fed has never been able to control longer-term rates.

Italian President Giorgio Napolitano resigned on Wednesday. This decision added to concerns over political stability in Italy.

Italy's Prime Minister Matteo Renzi has a difficult task of finding a successor.

The president's role in Italy is mainly ceremonial, but he can choose a prime minister and dissolve parliament.

The U.S. Commerce Department released the business inventories data on Wednesday. The U.S. business inventories rose by 0.2% in November, in line with expectations, after a 0.2% gain in October.

Business sales declined 0.2% in November.

Retail inventories excluding autos climbed 0.1% in November.

The business inventories/sales ratio was 1.31 months in November. The business inventories /sales ratio is a measure of how long it would take to clear shelves.

The U.S. Commerce Department released the retail sales data on Wednesday. The U.S. retail sales unexpectedly dropped 0.9% in December, missing expectations for a 0.2% increase, after a 0.4% gain in November. November's figure was revised down from a 0.7% rise.

Retail sales excluding automobiles fell 1.0% in December, missing forecasts for a 0.1% gain, after a 0.1% gain in November. November's figure was revised down from a 0.5% increase.

The decline was driven by gasoline station sales. Gasoline station sales plunged 6.5% in December.

Sales at clothing retailers decreased 0.3%, while sales at electronics and appliance stores fell 1.6% in December.

For all of 2014, retail sales increased at an annual rate of 4%.

U.S. stock-index futures fell as a deepening commodities rout and an unexpected decline in American retail sales spurred concern that global growth is slowing.

Global markets:

Nikkei 16,795.96 -291.75 -1.71%

Hang Seng 24,112.6 -103.37 -0.43%

Shanghai Composite 3,223.25 -12.05 -0.37%

FTSE 6,362.18 -180.02 -2.75%

CAC 4,220.11 -70.17 -1.64%

DAX 9,809.04 -131.96 -1.33%

Crude oil $45.45 (-0.96%)

Gold $1237.40 (+0.25%)

(company / ticker / price / change, % / volume)

Upgrades:

Downgrades:

Verizon (VZ) downgraded to Hold form Buy at Evercore ISI

Other:

Facebook (FB) target raised to $100 from $88 at Oppenheimer(expect strong 4Q results)

Intel (INTC) target raised to $50 from $45 at Jefferies

Google (GOOG) target lowered from $722 to $700 at Credit Suisse

Wells Fargo (WFC) earned $1.02 per share in the fourth quarter, in line with expectations of analysts. Revenue in the fourth quarter rose 3.6% year-over-year to $21.40 billion, beating analysts' estimate of $21.29 billion.

WFC shares fell to $51.53 (-0.62%) prior to the opening bell.

EUR/USD: $1.1750(E296mn), $1.1755(E205mn), $1.1835-40(E560mn)

USD/JPY: Y118.15($480mn), Y118.75($650mn)

AUD/USD: $0.8250(A$413mn)

NZD/USD: $0.7750($242mn), $0.7765(NZ$422mn)

USD/CAD: C$1.1900($215mn)

Eurostat released industrial output data for the Eurozone on Wednesday. Industrial production in the Eurozone rose 0.2% in November, exceeding expectations for a flat reading, after a 0.3% rise in October. October's figure was revised up from a 0.1 increase.

The increase was driven by higher production of durable consumer goods. The production of durable consumer goods rose 1.9%, non-durable consumer goods gained 0.5% and intermediate goods increased 0.3% in November, while capital goods declined by 0.2% and energy by 0.9%.

That could be signs falling oil prices may lead to higher household demand for other goods and services.

On a yearly basis, Eurozone's industrial production fell 0.4% in November, beating expectations for a 0.9% drop, after a 0.8% gain in October. October's figure was revised up from a 0.7 increase.

The decline was driven by falling oil prices. The production of energy dropped 4.8%, capital goods declined 0.9% and intermediate goods fell 0.6% in November, while durable consumer goods increased 0.4% and non-durable consumer goods rose by 3.2%.

JPMorgan (JPM) earned $1.19 per share in the fourth quarter, missing analysts' estimate of $1.31. Revenue in the fourth quarter fell 2.8% year-over-year to $22.51 billion, missing analysts' estimate of $23.22 billion.

JPMorgan shares decreased to $57.70 (-1.94%) prior to the opening bell, below МА(200) at D1.

EUR/USD

Offers $1.1850-60, $1.1820/25

Bids $1.1700, $1.1600

GBP/USD

Offers $1.5400/05, $1.5250

Bids $1.5145/40, $1.5105/00

AUD/USD

Offers $0.8250, $0.8200, $0.8150

Bids $0.8100, $0.8060/50, $0.8020, $0.8000, $0.7950

EUR/JPY

Offers Y139.50, Y139.00, Y138.50

Bids Y137.00, Y136.50, Y136.20, Y136.00

USD/JPY

Offers Y118.00, Y117.50

Bids Y116.50, Y116.00, Y115.50

EUR/GBP

Offers stg0.7900, stg0.7880/85, stg0.7850/55

Bids stg0.7720, stg0.7700, stg0.7680

Economic calendar (GMT0):

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

06:00 Japan Prelim Machine Tool Orders, y/y December +36.6% +33.8%

07:45 France CPI, m/m December -0.2% 0.0% +0.1%

07:45 France CPI, y/y December +0.3% -0.1% +0.1%

09:30 Eurozone European Court of Justice Ruling for OMT

10:00 Eurozone Industrial production, (MoM) November +0.3% Revised From +0.1% 0.0% +0.2%

10:00 Eurozone Industrial Production (YoY) November +0.8% Revised From +0.7% -0.9% -0.4%

The U.S. dollar traded mixed against the most major currencies ahead of the U.S. economic data. The U.S. retail sales are expected to rise 0.2% in December, after a 0.7% increase in November.

Retail sales excluding automobiles are expected to climbs 0.1% in December, after a 0.5% rise in November.

The U.S. business inventories are expected to rise 0.2% in November, after a 0.2% gain in October.

The greenback remained supported by falling oil prices.

The euro declined against the U.S. dollar after the ruling of European Court of Justice (ECJ) on Wednesday. The ECJ said that Outright Monetary Transactions (OMT) bond-buying programme was legitimate and in line with monetary policy. The opinion was non-binding. A final decision is expected in the next six months.

The OMT programme was has been announced in September 2012. The programme allows the ECB to purchase government bonds of Eurozone members if they request help. The OMT programme has never been used.

The opinion by the ECJ probably paved the way for the launch of bond-buying programme by the European Central Bank.

The European Central Bank President Mario Draghi in an interview to the German newspaper Die Zeit released on January 14, 2015 that "all members of the Governing Council of the ECB are determined to fulfil our mandate". He added that the ECB's options were limited.

Industrial production in the Eurozone rose 0.2% in November, exceeding expectations for a flat reading, after a 0.3% rise in October. October's figure was revised up from a 0.1 increase.

On a yearly basis, Eurozone's industrial production fell 0.4% in November, beating expectations for a 0.9% drop, after a 0.8% gain in October. October's figure was revised up from a 0.7 increase.

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

EUR/USD: the currency pair fell to $1.1726

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair declined to Y116.53

The most important news that are expected (GMT0):

13:30 U.S. Retail sales December +0.7% +0.2%

13:30 U.S. Retail sales excluding auto December +0.5% +0.1%

13:30 U.S. Import Price Index December -1.5% -2.7%

15:00 U.S. Business inventories November +0.2% +0.2%

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

The World Bank cut its global economic growth forecast for 2015 and 2016 on Tuesday. This decision was driven by disappointing economic outlook in the Eurozone, Japan and some major emerging economies.

The World Bank expects that the global economy would grow 3% in 2015, down from its June forecast of 3.4%. The global growth will reach 3.3% in 2016, down from a June forecast of 3.5%. The global economy is expected to grow 3.2% in 2017.

China's economy is expected to expand 7.1% in 2015 (7.4% in 2014), 7% in 2016 and 6.9% in 2017.

Growth in the U.S. is expected to accelerate to 3.2% in 2015, 3.0% and 2.4% in 2016 and 2017, respectively. In the Eurozone, the economy is expected to grow 1.1% in 2015, 1.6% in 2016-17. In Japan, growth will increase to 1.2% in 2015 and 1.6% in 2016.

European indices rebounded from early losses but are still trading negative as oil producers and miners lead declines amid a commodity rout after the World Bank cut the economic growth outlook for 2015 and 2016 on Tuesday naming economic slowdown in Europe, Japan and other major economies the reason. Stocks found support after Advocate General Pedro Cruz Villalon of the EU Court of justice in Luxembourg said that the ECB's Outright Monetary Transactions program is "in principle" in line with European law backing Mario Draghi. The ECB is determined to fulfill its mandate and is ready to buy government bonds to revive Eurozone's inflation.

Investors are looking forward to the European Central Bank policy meeting taking place on January 22^nd and the Greek elections on January 25^th where the anti-austerity party Syriza, that wants to renegotiate debt, is leading polls. According to Moody the "Grexit" seems a relatively unlikely scenario, even if the anti-austerity party Syriza will win in the upcoming Greek elections.

In today's session the FTSE 100 index plummeted the most being the most commodity-heavy index, declining -1.40% quoted at 6,450.31. France's CAC 40 lost -0.25% trading at 4,279.45 after a slump in early trading. Germany's DAX 30 is currently trading -0.13% at 9,928.50.

Brent crude and West Texas Intermediate continue extended losses today for a fourth consecutive day trading near the lowest level in six years. Today the World Bank lowered its economic growth outlook for 2015 and 2016 to 3.0% respectively 3.3% citing weaker economies in Europe, japan and other major economies.

Yesterday OPEC officials re-affirmed that the organization is going to fight for market share, blaming the U.S. shale drillers of oversupplying the market. Mohammed al-Mazroui statet that the "strategy will not change" at a Gulf energy conference in Abu Dhabi and that high-cost producers should be the first to cut production. According to Kuwait Oil Minister Ali Al-Omair only increased global economic growth can absorb the glut estimated at 1.8 million barrels a day.

Yesterday data showed API U.S. crude inventories rose by 3.9 million barrels in the week ended January 9.

Market participants look ahead to the official U.S. Crude Oil Inventories due at 15:30 GMT to get further information on the strength of demand of the world's largest consumer of oil.

Brent Crude lost -0.11%, currently trading at USD46.54 a barrel. West Texas Intermediate declined by -0.50% currently quoted at USD45.66 adding to this week's massive sell-off.

Gold prices further declined in today's session after reaching a 12-week high at USD1,243.90 as investors weighed the global economic outlook, dampened by the World Bank's outlook for 2015 and 2016, against higher U.S. benchmark rates. Normally, the rout in oil and copper prices should have boosted the demand for a haven asset but gold declined as investors took profit after the recent rally. A stronger U.S. dollar further added pressure on the gold price. The precious metal is currently quoted at USD1,228.10, -0,18% a troy ounce.

Gold in recent days has been supported, as political uncertainty in Greece and concerns about the impact of falling oil prices on the global economy led investors to buy the precious metal. Also growing speculations that FED will keep rates on hold for longer after mixed U.S. job data with a surprise drop in hourly wages last Friday supported the metal.

GOLD currently trading at USD1,228.10

EUR/USD: $1.1750(E296mn), $1.1755(E205mn), $1.1835-40(E560mn)

USD/JPY: Y118.15($480mn), Y118.75($650mn)

AUD/USD: $0.8250(A$413mn)

NZD/USD: $0.7750($242mn), $0.7765(NZ$422mn)

USD/CAD: C$1.1900($215mn)

According Advocate General Pedro Cruz Villalon of the EU Court of justice in Luxembourg the ECB's Outright Monetary Transactions program is "in principle" in line with European law backing Mario Draghi who said that the ECB is determined to fulfill its mandate and is ready to buy government bonds to revive Eurozone's inflation. The news led to a sell off of the euro versus the greenback, trading at nine-year lows.

REUTERS

Draghi says ECB needs expansive monetary policy: paper

(Reuters) - European Central Bank President Mario Draghi said a loose monetary policy is needed to achieve price stability in the euro zone and the Governing Council is determined to deliver this.

With euro zone consumer prices turning negative in December for the first time in five years, there are growing doubts among policymakers whether the ECB's stimulus implemented so far will enough to prevent the euro zone from slipping into deflation.

To achieve the ECB's medium-term inflation target of below but close to 2 percent, the ECB must "keep interest rates low and work towards an expansive monetary policy that accompanies growth," Draghi told Die Zeit in an in advanced release of an interview to be published on Thursday.

Source: http://www.reuters.com/article/2015/01/14/us-ecb-policy-draghi-idUSKBN0KN0N720150114

BLOOMBERG

Norway to Tackle Oil Slump Via Krone Buffer, Government Says

Norway is embracing a slump in the krone that Finance MinisterSiv Jensen says will act as a buffer to protect western Europe's biggest oil exporter from plunging crude prices.

A weaker currency, together with monetary policy measures, will be a first line of defense around the economy before the government considers additional measures, Jensen said yesterday in an interview following a speech in Oslo.

A weaker krone "is one of the cushions that we have," she said. Once the full effect of the exchange rate has been felt, then "we are willing, and able, to put other measures forward," she said.

Source: http://www.bloomberg.com/news/2015-01-14/norway-to-tackle-oil-slump-via-krone-buffer-government-says-1-.html

BLOOMBERG

Canadian Dollar Falls to C$1.20 First Time Since 2009 on Crude

Canada's dollar weakened past C$1.20 per greenback for the first time since April 2009 on concern a continued slump in crude oil, the nation's biggest export, will damp economic growth.

Less than two weeks into the year, the currency has already lost more than 3 percent against its U.S. counterpart as speculation a global oversupply of crude that's already cut the commodity's price by more than half since June will drive it down further. Bank of Canada Governor Stephen Poloz, who will release new economic forecasts next week, said in December the slide in oil will cut about a third of a percentage point from growth this year.

Source: http://www.bloomberg.com/news/2015-01-14/canadian-dollar-falls-to-c-1-20-first-time-since-2009-on-crude.html

European indices open significantly lower erasing yesterday's gains amid a slump in copper fuelled by global growth concerns as the World Bank cut its forecast for 2015 despite continuously falling oil prices. The bank cited disappointing growth prospects in the Eurozone and Japan as main reasons. Miners and oil-stocks lead declines.

According to Moody the "Grexit" seems a relatively unlikely scenario, even if the anti-austerity party Syriza will win in the upcoming Greek elections on January 25^th.

The FTSE 100 index is currently trading -1.40% quoted at 6,450.41 points, Germany's DAX 30 lost -0.94% trading at 9,847.18. France's CAC 40 dropped by -1.32%, currently trading at 4,233.60 points. French consumer price inflation rose in December according to official data. The French CPI rose by +0.1% compared to -0.2% in the previous month. Analysts expected a flat reading of 0.0%.

Markets await the European Court of Justice Ruling for OMT due at 09:30 GMT and data on Industrial Production in the Eurozone at 10:00 GMT. Later in the day a set of U.S. data is due being published from 13:30 GMT on, including Retail Sales, Business Inventories and the Import Price Index.

U.S. markets closed lower on Tuesday after a volatile session, shedding early gains. The materials and energy sector weighed on the indices, extending the decline for a third day, as commodity and oil prices declined. The DOW JONES index lost -0.15%, 27 points, closing at 17,613.68. The S&P 500 declined by -0.26% with a final quote of 2,023.03.

Chinese stock markets reversed gains as the rally seems to lose momentum. Hong Kong's Hang Seng lost -0.26% with a final quote of 24,153.92 points. China's Shanghai Composite closed at 3,223.25 points, a decline by -0.37%. Foreign investors sold shares on a net basis for a second day.

Japan's Nikkei dropped sharply by 1.71% closing at 16,795.96 points as oil continued to slide weighing on oil-related shares. A record USD812 billion budget approved by Japans cabinet to support growth was could not support the stock market. Japan's finance Minister Taro Aso called for a drastic fiscal reform to balance budget by 2021. Preliminary Machine Tool Orders declined to +33.8% in December from a previous reading of +36.6% in November. Markets await data on Core Machinery Orders due late in the day at 23:50 GMT.

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

06:00 Japan Prelim Machine Tool Orders, y/y December +36.6% +33.8%

The U.S. dollar traded mixed against its major peers and declined versus the euro, after trading close to a nine-year high yesterday as investors are speculating on new stimulus measures, sovereign quantitative easing, by the ECB to help the lagging euro-zone economy. The upcoming Greek elections and falling oil prices also weigh on the single-currency. The Deutsche Bank revised its forecast for the euro down to USD1.10, UDS1 and 90 cents in the next three years.

The Australian dollar was hit by a plunge of copper prices. Copper futures declined by 6.2%. The aussie dropped the most since January 2^nd amid the weakening demand for the countries commodities.

New Zealand's dollar traded lower further retreating from monthly highs against the greenback reached on January 9^th. Today market participants await data on New Zealand's Food Price Index.

The Japanese yen booked gains against the U.S. dollar amid growing risk aversion for a fourth consecutive day as Japanese stocks declined, oil continued to slump and commodities weakened. Preliminary Machine Tool Orders declined to +33.8% in December from a previous reading of +36.6% in November. Japan's finance Minister Taro Aso called for a drastic fiscal reform to balance budget by 2021. Markets await data on Core Machinery Orders due late in the day at 23:50 GMT.

EUR/USD: the euro traded stronger against the greenback

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

07:45 France CPI, m/m December -0.2% 0.0%

07:45 France CPI, m/m December +0.3% -0.1%

10:00 Eurozone Industrial production, (MoM) November +0.1% 0.0%

10:00 Eurozone Industrial Production (YoY) November +0.7% -0.9%

10:00 Eurozone European Court of Justice Ruling for ESM and Fiscal Compact

13:30 U.S. Retail sales December +0.7% +0.2%

13:30 U.S. Retail sales excluding auto December +0.5% +0.1%

13:30 U.S. Import Price Index December -1.5% -2.7%

15:00 U.S. Business inventories November +0.2% +0.2%

15:30 U.S. Crude Oil Inventories January -3.1

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

21:45 New Zealand Food Prices Index, m/m December -0.5%

21:45 New Zealand Food Prices Index, y/y December +0.6%

23:50 Japan Core Machinery Orders November -6.4% +4.8%

23:50 Japan Core Machinery Orders, y/y November -4.9% -5.8%

EUR / USD

Resistance levels (open interest**, contracts)

$1.1993 (1807)

$1.1940 (997)

$1.1888 (264)

Price at time of writing this review: $ 1.1791

Support levels (open interest**, contracts):

$1.1728 (2326)

$1.1699 (2097)

$1.1658 (3702)

Comments:

- Overall open interest on the CALL options with the expiration date February, 6 is 49046 contracts, with the maximum number of contracts with strike price $1,2100 (4700);

- Overall open interest on the PUT options with the expiration date February, 6 is 55710 contracts, with the maximum number of contracts with strike price $1,1700 (6748);

- The ratio of PUT/CALL was 1.14 versus 1.13 from the previous trading day according to data from January, 13

GBP/USD

Resistance levels (open interest**, contracts)

$1.5403 (366)

$1.5306 (379)

$1.5209 (1016)

Price at time of writing this review: $1.5160

Support levels (open interest**, contracts):

$1.5090 (1579)

$1.4993 (1168)

$1.4895 (1495)

Comments:

- Overall open interest on the CALL options with the expiration date February, 6 is 15023 contracts, with the maximum number of contracts with strike price $1,5800 (1108);

- Overall open interest on the PUT options with the expiration date February, 6 is 16791 contracts, with the maximum number of contracts with strike price $1,5100 (1579);

- The ratio of PUT/CALL was 1.12 versus 1.12 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.

(raw materials / closing price /% change)

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

EUR/USD $1,1772 -0,52%

GBP/USD $1,5159 -0,08%

USD/CHF Chf1,0199 +0,52%

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

06:00 Japan Prelim Machine Tool Orders, y/y December +36.6%

07:45 France CPI, m/m December -0.2% 0.0%

07:45 France CPI, m/m December +0.3% -0.1%

10:00 Eurozone Industrial production, (MoM) November +0.1% 0.0%

10:00 Eurozone Industrial Production (YoY) November +0.7% -0.9%

10:00 Eurozone European Court of Justice Ruling for ESM and Fiscal Compact

13:30 U.S. Retail sales December +0.7% +0.2%

13:30 U.S. Retail sales excluding auto December +0.5% +0.1%

13:30 U.S. Import Price Index December -1.5% -2.7%

15:00 U.S. Business inventories November +0.2% +0.2%

15:30 U.S. Crude Oil Inventories January -3.1

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

21:45 New Zealand Food Prices Index, m/m December -0.5%

21:45 New Zealand Food Prices Index, y/y December +0.6%

23:50 Japan Core Machinery Orders November -6.4% +4.8%

23:50 Japan Core Machinery Orders, y/y November -4.9% -5.8%