World faces prospect of a vicious deflationary circle Developing world less affceted than the devloped world Global financial regulations “not successful” The billionaire investor was speaking from a conference in Bangalore, India

Euro area competitiveness must be increased Fiscal union needed to ensure rules are adhered to High deficit countries need credible reduction

PARIS (MNI) – The French government believes it can spearhead the launch of a financial transactions tax in Europe by accelerating the timetable, Labor Minister Xavier Bertrand said Monday. The issue will be a hot item on the agenda at a working lunch of French President Nicolas Sarkozy and German Chancellor Angela Merkel later today [...]

Not  a huge amount about this morning, but so far there’s .. EUR/USD:   Talk of offers 1.2770/80 (Real Money),  stops on a break of 1.2780,with larger offers  up at 1.2800/15.  Buy stops above through 1.2820. GBP/USD: Offers 1. 5450/55,  and  1,5465/70. Tech support seen 1.5395/05 EUR/GBP: Tech support 0.8240 and 0.8220/25, Tech res 0.8285/90 AUD/USD: [...]

Better than Reuters’ median forecast of -24.2.

Reports decent real money selling in EUR/USD above 1.2770.  We’ve been as high as 1.2774, presently at 1.2757. Talk of more buy stops now through 1.2780.

The Athens-based newspaper says Greece may freeze private sector wages for at least three years in order to secure loans from EU, ECB and IMF. Cites unnamed officials in Brussels and Washington. Other options apparently on the table; cutting Christmas and Easter bonuses as well as cut of up to 30% in the minimum wage [...]

Back up to 1.0231 just now and has filled the gap left from Friday’s close and this morning’s Asian open. There are some corporate offers around 1.0235, and there  should be some interim resistance up around the 1.0240/45 levels where  AUD/USD recovered on Friday afternoon after the sell off on the back of the strong payroll [...]

Up at 1.5435 from around 1.5420 when I parked my bum. A UK clearer, with strong Far-Eastern connections, has apparently to buy cable today related to dividend payments.

FRANCE DATA: November sa trade deficit narrowed to E4.412 bln from E5.575 bln in October (revised from -E6.248 bln). –Deficit smaller than expected; MNI survey median forecast -E5.9 bln –November sa exports +3.3% m/m; sa imports flat m/m

Better than Reuters’ median forecast of -6.0 bln. October revised upward to -5.6 bln from previous -6.248 bln.

Bloomberg reporting. Dr Doom opines “A sound, permanent European fund needs to be set up and has to be stronger and more capitalized than the one currently envisaged.” adding The fund “must be able to intervene swiftly by providing liquidity to those who lose access to the markets when the spreads are out of control [...]

Much stronger than Reuters’ median forecast of 12.0 bln. Exports up +2.5% m/m, imports down -0.4%.

GERMANY DATA: November sa trade surpl +E15.0bn; October rev +E12.5bn(+E12.6bn) – Germany November nsa trade surplus +E16.2bn; October rev +E11.5bn (+E11.6bn) – Germany November nsa c/a surplus +E14.3bn; October rev +E10.0bn (+E10.3bn) – See MNI MainWire for details

Weaker than Reuters’ median forecast of 3.2%. Seasonally adjusted rate 3.1%, as expected.

Financial bookies see European stocks opening lower, FTSE, DAX and CAC 40 down between -0.4% and -0.8%.

Europe may avoid recession this year Comments made in interview with South African newspaper.

If you’ve got any ideas you’d like to share with your fellow readers, here’s where to stick ‘em.

Dealers say that hedge funds have been booking profits in the EUR/AUD ahead of the summit later today. EUR/AUD is back up near 1.2500 and EUR/USD is back above 1.2700, close to where it closed in NY on Friday.

Australian November retail sales 0.0% (+0.3% expected) Weekend reports suggest that China’s growth forecasts will be revised lower to 7% Latest China lending and money supply data show monetary conditions easing USD/CNY mid-rate fixed higher at 6.3236 UK finance services sector showing improved growth Czech central bank: Greece should leave EZ if EU not able to [...]