- Summary of trade between 17:00 ET and 23:00 ET: Asian stock markets tracked Wall Street's plunge, and Goldman's downgrade of Citigroup weighed on financials. Short-covering ahead of the holidays lifted the USD, while Asian currencies took a knock as foreign investors withdrew funds from emerging markets. The ongoing theme of risk aversion knocked down lofty oil prices, and gold continues to look heavy (the commodity is trading below key moving averages). There was no major economic data for markets to digest.

- Forex: USD/JPY traded within a 109.60-110.00 range, and traders said there's not as much demand to buy on dips as there was earlier last week. Short-covering lifted the USD, as some traders take money off the table ahead of the Fed's showdown with the markets. The markets boxed in the Fed to lower rates last month and it appeared they would do so again in December. Futures now fully price a 25bps rate cut from the Fed on Dec 11, up from as low as 72% earlier in the day and 90% at Friday's close. It would appear that markets have completely ignored the hawkish comments made on Friday by FOMC members Poole and Kroszner (note that their comments were designed to dampen expectations of a Fed rate cut at the Dec 11 meeting). The Fed will release new economic forecasts tomorrow, with the new forecasts extending out to three years instead of two. Accompanying the forecasts will be a narrative that describes the risks. Between 17:00 ET and 23:16 ET: EUR/USD -0.08%, USD/CHF +0.11%, AUD/USD -0.48%, NZD/AUD +0.41%, AUD/JPY -0.45%, USD/KRW +0.46%, USD index +0.09%.

- Equities: At 22:47 ET Japan's Nikkei is -1.51%, Australia's ASX is -1.88%, South Korea's KOSPI is -3.39% and the Shanghai Composite Index is -0.54%. The firmer JPY and lingering credit concerns dragged Japanese stocks lower, with the Nikkei ending the morning session at its lowest level since July 2006. There was some M&A news in Tokyo: Shares of Aozora Bank are higher by more than 6.5% on reports that the company will pursue a joint venture with Sumitomo Trust. In other M&A news, Shinsei Bank's shares are sharply higher after a private equity consortium offered ¥425/share (24% premium) for as much a 22.7% stake in the company. Lower commodity prices weighed on the resource stocks listed in Sydney, while Korean exporters traded lower as investors remain concerned over the health of the U.S. economy, a key export market. Chinese stocks traded lower after China's Premier Wen said that authorities must take steps to prevent an asset bubble.

- Commodities: Crude oil tracked Wall Street's losses and traded lower by -0.55% between 18:00 ET and 23:01 ET, last quoted at $94.12/bbl. Spot gold is lower by -0.51%, weighed down by the rebounding USD and lower oil prices. Gold remains stuck below its 30day moving average of $781.84 after falling below this level during the New York session. Shanghai copper and Zinc are lower by their daily limits on risk aversion and rising global inventories.

(by Eben Esterhuizen and Gavin Pierce)