• Germany’s trade surplus for January came in at 8.3 bln euros versus 11.0 bln in December (worse than expected, median forecast 9.5 bln) Lowest surplus in more than seven years. Exports declined huge -4.4% m/m, imports by -0.8%.
• IMF’s Strauss Kahn: World may face further banking losses, as not all risks have been located yet.
• ECB’s Weber: Still sees 1% lower limit for ECB rates. Says he would “prefer that the deposit rate would not fall to zero” but conceeds we are not at the point where we can cut rates no further and there is room to move.
• ECB’s Bini Smaghi: ECB ready to cut rates further, even to zero, if economic situation worsens.
• UK industrial production for January -2.6% m/m, 11.45 y/y (worse than median forecasts of -1.2% and -9.9% respectively) Weakest m/m fall since June 02, weakest y/y fall since Jan 81.
• ECB’s Weber: Global economy in steep decline, financial market turbulence poses downside risks.
• USD having opened generally weaker, has seen mixed fortunes during the European session. EUR/USD a touch lower, the euro not helped by a raft of weak european economic data (German/French trade, French industrial production) and ECB comments suggesting further ECB rate ease. However European stocks have done OK (FTSE 100 up 1.25%, DAX 30 UP 1.75%) and this has helped limit euro losses. A bullish memo from Citibank chief executive is said to be helping bolster stocks. Cable has managed to shrug off horrible industrial production data up about half a cent with sterling seeing some half-decent cross gains. Sources report good interest to buy the gbp/chf cross coming from swiss names. Indeed the swiss is generally a bit weak today, maybe caution ahead of the SNB rate announcement Thursday when rates are expected to be trimmed and possibly some announcement re quantitative easing.