- Summary of trade between 17:00 ET and 23:00 ET: Asian stock markets had a gloomy start to the week, tracking Wall Street's plunge on Friday. At 22:56 ET, Japan's Nikkei is -3.53%, Australia's ASX is -1.32%, South Korea's KOSPI is down more than -4.0% and the Shanghai Composite Index is -3.69%. The erosion of risk appetite lifted the JPY (USD/JPY briefly traded below 110), and selling on the JPY crosses provided momentum to the USD rebound. The AUD/USD was obliterated, trading below key Fibo support at 0.8992, with the currency pair losing more than -2.0% by the end of the Asian morning. Crude oil dropped sharply in Asian trade after the Saudi's hinted that they might increase production, dragging down gold prices amid the technical rebound in the USD. China's October trade surplus hit a new record despite a sharp increase in imports, while Japanese current account figures highlighted that Japan's economy hasn't yet been much affected by U.S. slowdown. Australia's central bank upgraded its inflation forecasts, but some analysts thought the central bank could've been more hawkish.

- Forex: With economic data taking a backseat for now, currency markets looked towards stock markets to gauge risk appetite. USD/JPY briefly dipped below psychological support at 110, and EUR/JPY fell to the lowest level since October 22. EUR/USD dipped lower, but did not test 1.4613 support. GBP/USD traded with a negative bias after hitting a 26.5-year high of 2.1160 on Friday, with the pair dipping below 2.0800 during the Asian morning. USD/CAD couldn't break moderate resistance at 0.9480 at the start of the Asian session, while AUD/USD dipped below Fibo support at 0.8992 to trade all the way down to 0.8900 (bear in mind that the currency traded as high as 0.9400 last week!) Between 17:00 ET and 23:12 ET: AUD/USD -1.88%, NZD/USD -1.44%, NZD/AUD +0.50%, EUR/USD -0.32%, GBP/USD -0.48%, USD/CAD +0.17%, CHF/JPY -0.61%, AUD/CHF -1.72%, USD index +0.20%

- Reserve Bank of Australia (RBA) Quarterly Monetary Policy Statement: The RBA raised its 2007 underlying inflation projection at 3.25%, above its 2.0%-3.0% target band, suggesting another near-term rate hike is likely (analysts expect a February rate hike, after the release of Q4 inflation data).

- China's October trade surplus hits record: (CH OCT TRADE BALANCE: $27.05B V $30.8B expected, $23.9B prior; Exports YoY: 22.3% v 22.8% expected, 22.8% prior; Imports YoY: 25.5% v 19.2% expected, 16.1% prior) Analysts said that the surplus is smaller than expected given that seasonal effects are strong at this time of year, adding that surging commodity prices are likely to add upside to import prices in the month ahead.

- Japan's current account surplus widens in September: (JP SEPT CURRENT ACCOUNT TOTAL: ¥2.88T V ¥2.69T expected, ¥2.1T prior; ADJUSTED: ¥2.2T V ¥2.10T expected, ¥2.2T prior) Analysts said that Japanese exports to Asia and other emerging markets are big reasons for the widening current account surplus, suggesting that Japan's economy hasn't yet been much affected by U.S. slowdown.

- Equities: Asian stock markets saw broad-based declines, with financials, exporters and energy shares leading the downside. Investors dumped Chinese equities after the PBoC's decided to raise the country's reserve ratio requirement for the 9th time in 2007, with China's CSI 300 Index trading well below the psychological 5,000 level. The Hang Seng is lower by more than 1,100 points (-4.0%) after a Credit Suisse analyst suggested that China will delay its Hong Kong individual investment program until 2Q08.

(by Eben Esterhuizen and Gavin Pierce)