- Euro edges out US Dollar on manufacturing activity releases. - On Monday, the manufacturing US ISM report was almost unbelievably disappointing, almost ugly. The headline index dropped to 51.3 in January from 56.5 in December. Economists were expecting 56.0. Many of the companies surveyed by the ISM blamed poor weather. Stocks fell, sending benchmark indexes to their biggest declines since June, after the report. The Standard & Poor’s 500 Index dropped 2.3 percent to 1,741.89 at the close in New York. - US Equities at Close significantly lower: Dow Jones (-2.08%) at 15372.80, S&P (-2.28%) at 1741.89, NASDAQ (-2.61%) at 3996.96. - On the opposite side of US ISM releases, Euro zone factories enjoyed solid start to 2014, France lags again: PMI. Euro zone factories enjoyed their strongest month since mid-2011 in January as new orders flooded in, prompting them to take on new staff for the first time in two years, business surveys showed on Monday. The increase was led by a sharp pick-up in Germany and a revival in the euro zone's periphery members, but a continuing downturn in France, the bloc's second-biggest economy, remained a drag on the region. Markit's final Eurozone Manufacturing Purchasing Managers' Index rose to 54.0 last month, pipping an earlier flash reading of 53.9 and comfortably ahead of December's 52.7. The last time it was higher was in May 2011. - Also UK manufacturing growth eased in January, as Markit's UK Manufacturing Purchasing Managers' Index (PMI), a survey of more than 600 industrial companies, slipped to 56.7 in January from December's downwardly revised 57.2, slightly short of analysts' expectations for 57.0. - As a result of ugly US ISM and UK manufacturing data, alongside with solid, strong Euro zone PMI data - amidst a risk-aversion day – the Best positions of Monday were as of: Long JPY (JPY +1.15%), Short GBP (GBP -0.82%); GBPJPY(-1.93%), EURGBP(+1.16%), EURJPY(-0.79%), USDJPY(-1.11%). - New Zealand finance minister English: Would like to see New Zealand dollar lower. China slowdown a risk to economic outlook Says 2014 will be a good year for the economy. Economy can handle increase in interest rates Says RBNZ has signaled significant increase in interest rates Higher rates won’t have big impact on growth Not comfortable with level of NZD. - Kuroda: Influencing expectations is important part of BOJ easing. Also too early to discuss specific exit strategy. Also said that, BOJ easing has had intended impact so far; CPI to move towards 2% from end FY14 to FY15. - AUDUSD at Risk for Fresh Lows on Dovish Reserve Bank of Australia (RBA). The Australian dollar may face fresh lows over the next 24-hours of trading should the Reserve Bank of Australia (RBA) adopt a more dovish tone for monetary policy. RBA Governor Glenn Stevens may sound more cautious this time around as China – Australia’s largest trading partner – faces a slowing recovery, and the central bank may continue to carry out its easing cycle in 2014 in order to further assist with the rebalancing of the real economy.

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