The Reserve Bank of Australia (RBA) Governor Glenn Stevens said in an interview with The Australian Financial Review that the exchange rate of the Australian dollar should be closer to about USD0.75.

Stevens noted that the economic growth, jobs and inflation were running close to RBA's forecasts.

Stock indices closed lower, showed biggest weekly decline in 3 years. The decline was driven by a fall of shares in oil and oil services firms that followed crude oil prices.

Mixed Chinese economic data also weighed on markets. China's industrial production increased 7.2% on year in November, missing expectations for a 7.5% rise, down from a 7.7% gain in October.

Fixed asset investment in China rose 15.8% in November, in line with expectations, down from a 15.8% increase in October.

Retail sales in China climbed 11.7% on year in November, exceeding expectations for a 11.5% increase, after a 11.5% gain in October.

These figures adding to concerns about a slowdown of Chinese economy.

Industrial production in the Eurozone rose 0.1% in October, missing expectations for a 0.2% gain, after a 0.5% rise in September. September's figure was revised down from a 0.6 increase.

On a yearly basis, Eurozone's industrial production increased 0.7% in October, beating expectations for a 0.6% rise.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,300.63 -161.07 -2.49%

DAX 9,594.73 -267.80 -2.72%

CAC 40 4,108.93 -116.93 -2.77%

Benchmark U.S. oil prices extended losses below $60 a barrel as the International Energy Agency cut its global demand forecast for the fourth time in five months.

West Texas Intermediate crude is poised for a weekly decline of 11 percent while Brent has lost 9 percent. The IEA reduced its estimate for oil demand growth in 2015 by 230,000 barrels a day, the agency said in a report today. U.S. output, already at three-decade high, will continue to rise in 2015, the IEA said.

"In the short term supply is still stronger than demand," said Gareth Lewis-Davies, a London-based analyst at BNP Paribas SA. "We are going to see further inventory builds in the first half, hence the realization of further pressure on oil prices."

Both benchmarks have collapsed about 20 percent since Nov. 26, the day before the Organization of Petroleum Exporting Countries agreed to leave its production limit unchanged at 30 million barrels a day. Saudi Arabia, Iraq and Kuwait, the group's three biggest members, this month deepened discounts on shipments to Asia, bolstering speculation that they're fighting for market share.

WTI for January delivery dropped $1.25, or 2.1 percent, to $58.70 a barrel at 10:09 a.m. on the New York Mercantile Exchange after touching $58.27, the lowest since May 2009. Total volume was about 58 percent above the 100-day average for the time of day. Prices have decreased 40 percent this year.

Brent for January settlement slid $1.02, or 1.6 percent, to $62.66 a barrel on the London-based ICE Futures Europe exchange after reaching $62.37, the lowest since July 2009. Prices are down 43 percent in 2014.

The IEA, the Paris-based adviser to 29 nations, boosted projections for supplies outside OPEC in 2015 by 200,000 barrels a day, forecasting output will expand by 1.3 million barrels a day to 57.8 million a day. Production rising faster than demand could strain some nations' ability to store oil by the middle of next year, it predicted.

The IEA cut projections for the amount of crude OPEC will need to provide next year by 300,000 barrels a day to 28.9 million. OPEC gave the same forecast, the lowest since 2003, in its monthly report on Dec. 10.

The U.S. dollar traded mixed against the most major currencies after the mixed U.S. economic data. The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 93.8 in December from a final reading of 88.8 in November, exceeding expectations for an increase to 89.6. That was the highest level since January 2007.

The U.S. producer price index dropped 0.2% in November, missing expectations for a 0.1% fall, after a 0.2% increase in October.

On a yearly basis, the producer price index increased 1.4% in November, missing expectations for a 1.6% gain, after a 1.5% rise in October.

The producer price index excluding food and energy was flat in November, missing forecasts of a 0.1% increase, after a 0.4% gain in October.

On a yearly basis, the producer price index excluding food and energy climbed 1.8% in November, exceeding expectations for a 1.5% increase, after a 1.8% gain in October.

The euro traded higher against the U.S. dollar. Industrial production in the Eurozone rose 0.1% in October, missing expectations for a 0.2% gain, after a 0.5% rise in September. September's figure was revised down from a 0.6 increase.

On a yearly basis, Eurozone's industrial production increased 0.7% in October, beating expectations for a 0.6% rise.

The British pound traded mixed against the U.S. dollar. UK's construction output fell 2.2% in October, after a revised 2.2% gain in September. September's figure was revised up from a 1.8% rise.

The New Zealand dollar traded lower against the U.S. dollar. In the overnight trading session, the kiwi traded lower against the greenback after the weak Business NZ performance of manufacturing index for New Zealand. The Business NZ performance of manufacturing index (PMI) declined to 55.2 in November from 58.9 in October. October's figure was revised down from 59.3.

The Australian dollar traded mixed against the U.S. dollar. In the overnight trading session, the Aussie traded mixed against the greenback after the mixed economic data from China and the Reserve Bank of Australia Governor Glenn Stevens' interview. China's industrial production increased 7.2% on year in November, missing expectations for a 7.5% rise, down from a 7.7% gain in October.

Fixed asset investment in China rose 15.8% in November, in line with expectations, down from a 15.8% increase in October.

Retail sales in China climbed 11.7% on year in November, exceeding expectations for a 11.5% increase, after a 11.5% gain in October.

The Reserve Bank of Australia Governor Glenn Stevens said in an interview with The Australian Financial Review that the exchange rate of the Australian dollar should be closer to about USD0.75.

The Japanese yen traded mixed against the U.S. dollar. Japan's final industrial production rose 0.4% in October, faster than the 0.2% growth estimated earlier.

During today's trading prices for precious metals moderately reduced, but the gold market is ready to complete the growth of the second week in a row due to the increased demand for safe assets.

"100-day moving average of $ 1,234 - a level of strong resistance. The market is already three times stormed this milestone, but he resisted. If it can be overcome, the next important mark will be the 200-day moving average at around $ 1,267," - said a dealer MKS Group Jason Cherizola.

Brent oil price fell to a minimum of 5.5 years, losing 40 percent since the beginning of June due to oversupply. Cheap oil can cause a decline in interest in gold as protection against inflation.

The world's largest reserves of gold secured fund ETF SPDR Gold Trust on Thursday rose 0.13 percent to 725.75 tons.

"The longer the price stays above $ 1,200, the more new customers, why can increase reserves fund ETF. Until now, the fall in oil prices was unfavorable for gold, but if prices fall below $ 60, and the financial markets will begin to disturb the influence of low energy prices on the global economy, buying gold as a reliable asset may rise, "- wrote in the report, analysts HSBC.

Gold prices fell today after data Reuters / Michigan index value reflected potrebdoveriya 93.8, well above the forecast of 89.6.

December consumer confidence index in the US rose to its highest level since January 2007, compared with 88.8 points in November. Growth in consumer confidence in the US reflects mainly lower energy prices, improvements in the labor market and higher salaries. The Fall of the cost of gasoline allows Americans to send more money to buy other goods and services - it can expect to boost consumer spending.

Optimistic report on consumer sentiment led to a slight recovery of the US stock market, although the key indices remain in negative territory. Yields on 10-year Treasuries rebounded from daily lows at 3.5 bp to 2.145%.

The cost of the February gold futures on the COMEX today fell to 1214.80 dollars per ounce.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 93.8 in December from a final reading of 88.8 in November, exceeding expectations for an increase to 89.6. That was the highest level since January 2007.

Hiring and wage growth boosted the U.S. consumer confidence.

China's industrial production increased 7.2% on year in November, missing expectations for a 7.5% rise, down from a 7.7% gain in October.

Fixed asset investment in China rose 15.8% in November, in line with expectations, down from a 15.8% increase in October.

Retail sales in China climbed 11.7% on year in November, exceeding expectations for a 11.5% increase, after a 11.5% gain in October.

These figures adding to concerns about a slowdown of Chinese economy. Investors speculate that Chinese government will add stimulus measures to bolster growth.

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

The U.S. Commerce Department released the producer price index figures on Friday. The U.S. producer price index dropped 0.2% in November, missing expectations for a 0.1% fall, after a 0.2% increase in October.

On a yearly basis, the producer price index increased 1.4% in November, missing expectations for a 1.6% gain, after a 1.5% rise in October.

The decline was driven by a decline in oil prices. Wholesale gas prices dropped 6.3%, while food prices fell 0.2%.

The producer price index excluding food and energy was flat in November, missing forecasts of a 0.1% increase, after a 0.4% gain in October.

On a yearly basis, the producer price index excluding food and energy climbed 1.8% in November, exceeding expectations for a 1.5% increase, after a 1.8% gain in October.

Upgrades:

Downgrades:

Other:

Hewlett-Packard (HPQ) reinstated with a Buy at BofA/Merrill; tgt $47

Nike (NKE) target raised to $110 from $100 at Stifel

Microsoft (MSFT) initiated at Overweight at Piper Jaffray, target $54

Microsoft (MSFT) reiterated at Outperform at FBR Capital, target raised from $53 to $57

EUR/USD: $1.2300(E1.26bn), $1.2325-30(E590mn), $1.2350-60(E823mn), $1.2400(E1.0bn), $1.2500(E527mn)

USD/JPY: Y117.00($1.0bn), Y118.00($500mn), Y119.00($1.2bn), Y120.00-15($5.4bn)

GBP/USD: $1.5800(stg835mn)

USD/CHF: Chf0.9710($450mn), Chf0.9720($490mn), Chf0.9725($225mn)

AUD/USD: $0.8200(A$200mn), $0.8250-55(A$370mn), $0.8450(A$407mn)

NZD/USD: $0.7650(NZ$603mn)

USD/CAD: C$1.1450($222mn), C$1.1470-80($400mn), C$1.1525($295mn)

The Office for National Statistics (ONS) its construction output for the U.K. UK's construction output fell 2.2% in October, after a revised 2.2% gain in September. September's figure was revised up from a 1.8% rise.

The ONS said the output declined across the construction industry, while only public new work slightly increased.

Economic calendar (GMT0):

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

04:30 Japan Industrial Production (MoM) (Finally) October +0.2% +0.2% +0.4%

04:30 Japan Industrial Production (YoY) (Finally) October -1.0% -1.0% -0.8%

05:30 China Retail Sales y/y November +11.5% +11.5% +11.7%

05:30 China Fixed Asset Investment November +15.9% +15.8% +15.8%

05:30 China Industrial Production y/y November +7.7% +7.5% +7.2%

10:00 Eurozone Employment Change Quarter III +0.3% Revised From +0.2% +0.2% +0.2%

10:00 Eurozone Industrial production, (MoM) October +0.5% Revised From +0.6% +0.2% +0.1%

10:00 Eurozone Industrial Production (YoY) October +0.6% +0.6% +0.7%

The U.S. dollar traded mixed against the most major currencies ahead of the U.S. producer price index (PPI) data. The U.S. PPI is expected to decline 0.1% in November, after a 0.2% increase in October.

The greenback remained supported by yesterday's better-than-expected U.S. retail sales. The U.S. retail sales climbed 0.7% in November, exceeding expectations for a 0.3% increase, after a 0.5% gain in October. October's figure was revised up from a 0.3% rise.

Retail sales excluding automobiles increased 0.5% in November, beating expectations for a 0.1% gain, after a 0.4% gain in October. October's figure was revised up from a 0.3% increase.

The euro traded higher against the U.S. dollar after the industrial production data from the Eurozone. Industrial production in the Eurozone rose 0.1% in October, missing expectations for a 0.2% gain, after a 0.5% rise in September. September's figure was revised down from a 0.6 increase.

On a yearly basis, Eurozone's industrial production increased 0.7% in October, beating expectations for a 0.6% rise.

The British pound traded lower against the U.S. dollar as construction output in the U.K. declined. UK's construction output fell 2.2% in October, after a revised 2.2% gain in September. September's figure was revised up from a 1.8% rise.

EUR/USD: the currency pair rose to $1.2465

GBP/USD: the currency pair fell to $1.5693

USD/JPY: the currency pair declined to Y118.04

The most important news that are expected (GMT0):

13:30 U.S. PPI, m/m November +0.2% -0.1%

13:30 U.S. PPI, y/y November +1.5% +1.6%

13:30 U.S. PPI excluding food and energy, m/m November +0.4% +0.1%

13:30 U.S. PPI excluding food and energy, Y/Y November +1.8% +1.5%

14:55 U.S. Reuters/Michigan Consumer Sentiment Index (Preliminary) December 88.8 89.6

EUR/USD

Offers $1.2600, $1.2570, $1.2530, $1.2505, $1.2465/60

Bids $1.2340, $1.2290/00, $1.2245

GBP/USD

Offers $1.5825, $1.5800, $1.5760/65

Bids $1.5665, $1.5625, $1.5600, $1.5540

AUD/USD

Offers $0.8500, $0.8450, $0.8400, $0.8370

Bids $0.8220, $0.8200, $0.8100

EUR/JPY

Offers Y149.80, Y149.00, Y148.85, Y148.25/30, Y147.95

Bids Y146.40, Y146.00, Y145.50/60

USD/JPY

Offers Y122.00, Y121.80, Y121.00, Y120.00/90, Y119.55

Bids Y118.00, Y117.40, Y117.20, Y117.00, Y116.30

EUR/GBP

Offers stg0.8000, stg0.7980, stg0.7950

Bids stg0.7840, stg0.7830/20, stg0.7800

European indices are trading lower in today's session. Lower oil prices and the political turmoil in Greece weighed on the indices. Energy stocks were among the biggest losers. Weaker Industrial Output in China put further pressure on the markets. Eurozone's Employment Change was in line with expectations at +0.2%. Industrial Production on a monthly basis declined in October with a reading of +0.1%, analyst predicted an increase of +0.2%. On a yearly basis Industrial Production beat forecast by +0.1% showing an increase of +0.7%. The FTSE 100 index lost -1.50% quoted at 6,364.95 points. France's CAC 40 declined -1.72% trading at 4,153.27 and Germany's DAX 30 lost -1.35 at 9,729.36 points. Markets await data on the U.S. PPI and the Reuters/Michigan Consumer Sentiment Index due at 13:30 GMT and 14:55 GMT.

Brent crude and West Texas Intermediate are trading at new lows. Brent Crude lost -1.04% trading currently at USD63.02 a barrel slipped below the 63 dollar mark, its lowest since July 2009, and West Texas Intermediate declined -1.38% currently quoted at USD59.12 as the IEA cut its demand forecast for 2015. The IEA reduced its estimate for global oil demand growth in 2015 by 230,000 barrels a day. Oil's collapse into a bear market has been exacerbated as OPEC's three largest members offered the deepest discounts on exports to Asia in at least six years. The group decided against reducing its output quota at a meeting last month, letting prices drop to a level that may slow U.S. production that's surged to the highest level in more than three decades.

Gold prices fell slightly, trimming weekly gains, as the U.S. dollar strengthened and oil prices continued to fall. Strong U.S. economic reports fuelled expectations that the Federal Reserve is going to hike benchmark interest rates earlier in 2015 than expected. Despite recent gains the metal is likely to remain vulnerable in the short term amid a strong U.S. economy and rising interest rates. The precious metal is currently quoted at USD1,225.00 or -0,02 % a troy ounce

GOLD currently trading at USD1,225.00

EUR/USD: $1.2300(E1.26bn), $1.2325-30(E590mn), $1.2350-60(E823mn), $1.2400(E1.0bn), $1.2500(E527mn)

USD/JPY: Y117.00($1.0bn), Y118.00($500mn), Y119.00($1.2bn), Y120.00-15($5.4bn)

GBP/USD: $1.5800(stg835mn)

USD/CHF: Chf0.9710($450mn), Chf0.9720($490mn), Chf0.9725($225mn)

AUD/USD: $0.8200(A$200mn), $0.8250-55(A$370mn), $0.8450(A$407mn)

NZD/USD: $0.7650(NZ$603mn)

USD/CAD: C$1.1450($222mn), C$1.1470-80($400mn), C$1.1525($295mn)

REUTERS

Ahead of election win, Japan's Abe pivots away from painful reforms

TOKYO, Dec 12 (Reuters) - Prime Minister Shinzo Abe is signalling that retooling Japan's economy with painful structural reforms must take a back seat to reviving growth, even though he is poised to win a big referendum on his economic policies in an election on Sunday.

In the three weeks since he delayed a sales tax increase and called the election, Abe has shifted the debate from curbing the government's runaway debt to finding ways to stimulate the economy and put more money in voters' hands.

For example, policymakers say they are considering shopping vouchers for lower-income earners that would cover a portion of the cost of goods and services.

Source: http://www.reuters.com/article/2014/12/12/japan-election-economy-idUSL3N0TV3RK20141212

BLOOMBERG

IEA Cuts Global Oil Demand Forecast for 4th Time in Five Months

Global oil demand next year will be weaker than previously estimated and supply from non-OPEC producers will be bigger, theInternational Energy Agency said.

Consumption will expand by 230,000 barrels a day less than estimated in November, the Paris-based adviser to 29 nations said in a report today. Output from nations outside of the Organization of Petroleum Exporting Countries will grow at a faster pace than the agency predicted last month. Production rising faster than demand could strain some nations' ability to store by the middle of next year, it predicted.

The agency cut projections because the economies of producer nations are being hurt by tumbling prices, the IEA said. Most of the reduction in next year's estimate is attributable to Russia, where sanctions are hobbling growth, it said. Brent crude costs that collapsed 43 percent this year are too low for 10 of OPEC's 12 members to balance their budgets, data compiled by Bloomberg show.

Source: http://www.bloomberg.com/news/2014-12-12/iea-cuts-global-oil-demand-forecast-for-4th-time-in-five-months.html

BLOOMBERG

Ruble Surrounds Nabiullina With Rotten Choices: Russia CreditThe

Russian central bank Governor Elvira Nabiullina is running out of policy options for stabilizing the ruble without inflicting deeper damage to the economy.

On one side, she wants to support the currency to slow inflation and keep Russians from abandoning the ruble. On the other, the scale of interest-rate increases required to do that would further strangle an economy on the verge of a recession, and pile pressure on companies struggling to refinance debt as sanctions cut them off from international capital markets.

Source: http://www.bloomberg.com/news/2014-12-11/russian-central-bank-keeping-no-one-happy-with-only-bad-options.html

European indices declined with mining shares and the financial sector posting the biggest losses. Lower oil prices after the OPEC report that demand will drop in 2015 and the political turmoil in Greece weighed on the indices. Weaker Industrial Output in China put further pressure on the markets. The FTSE 100 index is currently trading -1.27% quoted at 6,379.71 points, Germany's DAX 30 lost -1.37% trading at 9,727.80. France's CAC 40 declined by -1.33%, currently trading at 4,169.84 points.

Markets await Eurozone's Employment Change and industrial Production data published at 10:00 GMT and later in the session U.S. PPI and the Reuters/Michigan Consumer Sentiment Index due at 13:30 GMT and 14:55 GMT.

U.S. markets closed higher on Thursday supported by good U.S. data on Retail Sales and unemployment. Growth in the world's largest economy seems sustainable and boosts investors' confidence The DOW JONES added +0.36% closing at 17,596.34 points, the S&P 500 gained +0.45%, with a final quote of 2,035.33 points. Falling oil prices further weighed down energy shares.

Hong Kong's Hang Seng is trading -0.16% at 23,275.96. China's Shanghai Composite closed at 2,939.47 points, a gain of +0.47%. Chinese Industrial Production further slowed, reading +7.2% compared to +7.7% in October and below a forecast of +7.5%. Fixed Asset Investment was in line with expectations at 15.8%. Retail Sales beat expectations by +0.2% at 11.7%.

Japan's Nikkei gained +0.66% closing at 17,371.58. Exporter Shares were supported by the solid U.S. Retail Sales data and a weakening yen. Markets were also supported by polls showing a clear victory for Prime Minister Abe's Party at the upcoming elections.

Economic calendar (GMT0):

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

04:30 Japan Industrial Production (MoM) (Finally) October +0.2% +0.2% +0.4%

04:30 Japan Industrial Production (YoY) (Finally) October -1.0% -1.0% -0.8%

05:30 China Retail Sales y/y November +11.5% +11.5% +11.7%

05:30 China Fixed Asset Investment November +15.9% +15.8% +15.8%

05:30 China Industrial Production y/y November +7.7% +7.5% +7.2%

The greenback traded stronger to mixed against its major peers. The currency was supported by upbeat retail sales figures. The U.S. dollar traded stronger against the euro after 306 banks borrowed 129.84 billion euros in the auction (targeted longer-term refinancing operation (TLTRO)) - about half of the volume offerded by the ECB and on the lower end of analysts expectations. Markets await data on the U.S. PPI and the Reuters/Michigan Consumer Sentiment Index being published later in the day at 13:30 GMT and 14:55.

The Australian dollar traded lower against the U.S. dollar hitting a 4-1/2 year low during the session. RBA Governor Glenn Stevens said in an interview that he would like to see the aussie at 75 U.S. cents but did not mention any interest rates cuts in the near future. Chinese Industrial Production further slowed, reading +7.2% compared to +7.7% in October and below forecast of +7.5%. Fixed Asset Investment was in line with expectations at 15.8%. Retail Sales beat expectations by +0.2% at 11.7%. China is Australia's biggest trade partner.

New Zealand's dollar declined after the currency added gains for three days.

The Japanese yen continued to weaken against the greenback before the upcoming elections this weekend currently trading around USD 118.70. According to a survey Prime Minister Shinzo Abe's Liberal Democratic Party will win more than the seats he needs for a two-thirds majority enabling him to continue his policy of monetary easing and fiscal spending known as "abenomics". Japanese Industrial production beat forecasts reading +0.4% MoM (forecast +0.2%) and -0.8% YoY (-1%).

EUR/USD: the euro declined against the greenback

USD/JPY: the U.S. dollar traded stronger against the yen

GPB/USD: The British pound traded weaker against the U.S. dollar

The most important news that are expected (GMT0):

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

10:00 Eurozone Employment Change Quarter III +0.2% +0.2%

10:00 Eurozone Industrial production, (MoM) October +0.6% +0.2%

10:00 Eurozone Industrial Production (YoY) October +0.6% +0.6%

13:30 U.S. PPI, m/m November +0.2% -0.1%

13:30 U.S. PPI, y/y November +1.5% +1.6%

13:30 U.S. PPI excluding food and energy, m/m November +0.4% +0.1%

13:30 U.S. PPI excluding food and energy, Y/Y November +1.8% +1.5%

14:55 U.S. Reuters/Michigan Consumer Sentiment Index (Preliminary) December 88.8 89.6

EUR / USD

Resistance levels (open interest**, contracts)

$1.2496 (1795)

$1.2461 (356)

$1.2435 (245)

Price at time of writing this review: $ 1.2395

Support levels (open interest**, contracts):

$1.2348 (762)

$1.2317 (1499)

$1.2273 (2440)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 48020 contracts, with the maximum number of contracts with strike price $1,2500 (6951);

- Overall open interest on the PUT options with the expiration date January, 9 is 54561 contracts, with the maximum number of contracts with strike price $1,2000 (7619);

- The ratio of PUT/CALL was 1.14 versus 1.16 from the previous trading day according to data from December, 11

GBP/USD

Resistance levels (open interest**, contracts)

$1.6002 (1793)

$1.5904 (1635)

$1.5807 (1561)

Price at time of writing this review: $1.5725

Support levels (open interest**, contracts):

$1.5688 (1358)

$1.5592 (967)

$1.5495 (983)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 18000 contracts, with the maximum number of contracts with strike price $1,5850 (1993);

- Overall open interest on the PUT options with the expiration date January, 9 is 17571 contracts, with the maximum number of contracts with strike price $1,5200 (1692);

- The ratio of PUT/CALL was 0.98 versus 1.05 from the previous trading day according to data from December, 11

* - 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.