Forex Trade Talk 00:00 GMT 18 January 2012

Forex Trade Talk Updates continuously added to Forex Forum Key Items  JP- Ind Output, GB- Jobs, US- PPI, IP/CU BOC MPR. 
Bank of Canada held policy steady as expected. The U.S. Empire State PMI was stronger than forecast. German ZEW data were much better than forecast while yy EZ and UK  inflation eased. German and U.S. data have been generally suggesting an improving trend.
Chinese GDP +8.9% yy better than estimated.
The S&P downgrade of the EFSF by one notch on Monday has had no lasting impact.  A rating of AA+ is still respectable.
Tensions now center Greek sovereign debt issues. The big question now is the nature of a possible debt default and Greece retaining the EUR.
Check the Forex Forum over the day for an updated and ongoing discussion of current trading themes in the MARKET CHATTER continuous discussion thread.
Forex pairs vs 2-yr note spreads
Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much).
 EQUITIES & INTEREST RATES
Bonds are a counter to risk trades because risk investments must be financed. When the cost of money moves up (higher interest rates), the return and allure of risk trades such as equities falls.