The IMF, which forecasts a 2.5 per cent decline in regional gross domestic product in 2009, estimates that “emerging Europe” – including Turkey – must roll over $413bn in maturing external debt in 2009 and cover $84bn in projected current account deficits. (FT) • European Central Bank officials said they may use new tools to bolster the economy as finance chiefs, defending their efforts to stem the worst recession since World War II, failed to agree on an overhaul of banking supervision. (Bloomberg) Key Reports Due (WSJ): No major economic indicators scheduled. Quotable “Giving money and power to government is like giving whiskey and car keys to teenage boys.” P.J. O’Rourke FX Trading – Gold below a key level—dollar chasing or leading… Now that gold has slipped below seeming near-term chart support at $893; is the next level at 858 in the cards? Seems gold as a risk aversion play—playing its role as a safe haven—means it loses support in an environment when things appear a bit brighter. Thought it may be a stretch to say the correlations we saw in the past for gold, trading as a commodity, may be over. But it isn’t a stretch to think because the global liquidity environment will not be the same as the recent past, the so-called simple correlation trades may be harder to find.

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