Updated February 22, 2012

The Nikkei (+1.0%), Hang Seng (+0.3%) and Shanghai Comp (+0.9%) all moved higher last night. Currently the FTSE (-0.3%), CAC (-0.4%) and DAX (-0.7%) are moving lower. Oil, at $105.94/bbl, has given back some of y’days advance to a 9 mth high. Gold, at $1755.87/oz, has also ticked modestly lower after y’days solid gain.

The NOK was the top performing actively traded currency last night after a strong Norwegian empl report scuttled rate cut speculation and high oil prices fuelled its gains. The CHF and Scandi’s were little changed ag the USD, as was the EUR (1.3209-1.3264 last night). USD/JPY (79.66-80.35 last night) had a solid gain to 7 mth highs and the JPY is increasingly reflecting concern over Japan’s Feb 14th increase to its asset purchase program and the B of J’s inflation targeting. GBP was the second weakest major after B of E minutes showed two votes for an increase in their asset purchase program. Commodity currencies were modestly lower ag the USD. The narrow ranges belie the conflicting statements and persisting doubts regarding Greek and broader EZ developments and prospects. EZ data was mixed last night and a heavy slate of US corporate earnings reports are slated for release today.

USDCAD (0.9954-0.9989 overnight) is modestly higher from last night’s close of 0.9966 as concerns about the global economy weigh on risky assets. There are no major Cdn data releases on the data docket today. US equity futures are pointing to a weaker North American open and oil prices are edging lower as expectation of weaker demand, largely based on weak Chinese data overnight, is countering y’days dominant concern that conflict between Iran and Western nations would interrupt supply. Look for an initial move back to the overnight high of 0.9989 which coincides with the 200 dma with a break of 1.0053 (Feb 16 high) needed to trigger a move higher. Suggested range today is 0.9940-1.0015.

OVERNIGHT ECONOMIC RELEASES:
• CH Feb HSBC Flash China Manufacturing – Actual 49.7, Prior 48.8
• FR Feb PMI Manufacturing – Actual 50.2, Survey 49.0
• FR Feb PMI Services – Actual 50.3, Survey 52.0
• GE Feb PMI Manufacturing – Actual 50.1, Survey 51.5
• GE Feb PMI Services – Actual 52.6, Survey 53.9
• IT Jan CPI YoY – Actual 3.4%, Survey 3.4%

UPCOMING ECONOMIC RELEASES:
• 10:00 AM – US Jan Existing Home Sales – Survey 4.66M, Prior 4.61M

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