ASIA-PACIFIC Trading Newsletter

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EMU CONSUMER PRICE INDEX

Friday Notes - More to come from Fed; ECB to follow by HVB Group

In January, inflation will probably move slightly higher to 3.2%, though we see risks tilted toward an unchanged reading. Food and energy will put upward pressure on overall inflation, while we have penciled in a decline in core inflation as the favorable base effect related to the German VAT hike kicks in.

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US FED INTEREST RATE DECISION

Fed cuts rates by 0.50% to 3% (FXstreet.com)

The Federal Reserve's Monetary Policy Committee has decided to cut interest rates by 50 basis points to 3% after their monetary policy meeting. The decision, which has been approved by 9 votes against 1, caps an unprecedented eight−day period in which officials slashed rates massively to ward off recession risks.

• Live Coverage: Market reaction to FOMC rate decision
• Read Full FOMC statement at the Fed
• Long−term bonds drop as Fed cuts rates (Thomson Financial News)
• Forex − Dollar weakens as Fed delivers half point rate cut, hints of more UPDATE (Thomson Financial News)
• Odds of another rate cut decline after Fed lowers rates by 50 basis points (Thomson Financial News)

• Tony Juste, FX Advisor at FXstreet.com: "Is this the Fed or what? 1.25% in rate cuts in less than 2 weeks is what I would call panic! Now it definitely looks as if Mr. Bernanke was a hedge fund trader itself and not a central banker. He is not inspiring the markets any confidence, and with these knee−jerk actions it will not stop the current spiral of economic downturn. The USD is going to suffer from these decision, although it may not be a long−lasting move." − FXstreet.com

U.S. Forex Market Commentary by GCI

FX Daily Commentary - FOMC Outcome Might Determine Dollars Future! by FXGreece

Central Banks: Fed - Preview of Jan 30 Meeting by FXstreet.com

US GROSS DOMESTIC PRODUCT ANNUALIZED

US GDP slows down in the 4Q (FXstreet.com)

Gross Domestic Product has grown at a sharply slower pace in the last quarter of the year if compared to the previous three months, and sharply below the expectations, according to the advanced estimations published by the Bureau of Economic Analysis.

• The official data at the Bureau of Economic Analysis
• US Q4 GDP growth up 0.6 pct, uncomfortably close recession say analysts UPDATE (Thomson Financial News)
• US Q4 GDP growth up 0.6 pct vs 1.2 pct rise expected, slowest since 2002 UPDATE (Thomson Financial News)
• DATAWATCH US Q4 GDP grows 0.6 pct vs 1.2 pct rise expected, slowest since 2002 (Thomson Financial News)

US: Slower Q4 growth by Danske Bank A/S

GDP Observatory - GDP growth in 4Q07 by BBVA Bancomer

US economic indicators - GDP growth in Q4 could have slowed down to about 1% qoq by BHF−Bank

US ADP EMPLOYMENT CHANGE

ADP Sees January US Private Sector Jobs +130,000 (Dow Jones)

U.S. private sector jobs rose by 130,000 in January, beating forecasts by big margins, according to a report published Wednesday by payrolls giant Automatic Data Processing (ADP) and consultancy Macroeconomic Advisers.

• Read the ADP National Employment Report
• 2nd UPDATE: ADP Sees January US Private−Sector Jobs +130,000 (Dow Jones)
• ECONOMIC REPORT: Private Sector Added 130,000 Jobs In January, ADP Survey Says (Dow Jones)
• UPDATE: ADP Sees January US Private Sector Jobs +130,000 (Dow Jones)

Daily Fx Strategy - ADP Adds to Fed Surprise Element by CMC Markets