Forex Trade Talk 00:00 GMT 19 January 2012

Forex Trade Talk Updates continuously added to Forex Forum Key Items AU- Jobs, EZ- Cur/Acct, US- Weekly Jobs, Housing Starts, CPI, Philly Fed, Nat Gas, Weekly Energy. 
IMF considering increasing its lending capacity by about $600bln, from   $385 bln to $1.0tln. Many wonder who beyond Europe might be willing to increase their contributions. Presumably the concept will be a non-starter in the U.S. during an election campaign? The report gave the EURUSD a lift when it was announced.
The forex focus remains debt auctions of various European nations. Both Spanish and German auctions went well on Wednesday. Traders continue to be wary of any slips in this process.
Tensions now center on Greek sovereign debt issues. The big current proposal for holders of Greek debt is for for 15 cents on the dollar in cash and 35 cents in a new 30yr bond. Not all debt holders are happy with this proposal, but there are reports of progress.
The Japanese Finance Minister today rejected suggestions that Japan peg the JPY to the EUR along the lines of the CHF peg to the EUR. He said the supply of JPY in global markets is simply too large. He warned the MOF continues to monitor the value of the JPY closely.
Saturday sees the South Carolina presidential primary. A clear Romney victory would about insure the Republican nomination. A loss would drag the process on further. 
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).
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.