Corporate & Investment Banking Currency Risk Management

08-Jan-2009 8:01 AM EST

Daily Market Report

Major Financial Market Information
3m LIBOR
US Germany Japan Great Britain Italy Canada France Switzerland 1.35% 2.72% 0.79% 2.50% 2.72% 1.81% 2.72% 2.72%

1 Day 10Y Gvt Change
-0.04% -0.04% -0.00% -0.07% -0.04% -0.11% -0.04% -0.04% 2.46% 3.14% 1.31% 3.23% 4.38% 2.92% 3.59% 2.38%

1 Day Equity Change
-0.03% -0.06% 0.05% -0.06% -0.04% 0.03% -0.12% -0.07% DJIA DAX Nikkei MIB30 TSE30 CAC40 SMI

Last
8,770 N.A. 9,239 20,968 9,121 N.A. N.A.

1 Day Change
-2.72% N.A. 1.74% -2.22% -3.70% N.A. N.A. Gold Silver Oil(WTI) CRB 30YTBond $844.00 $10.94 $42.77 $260.33 3.01%

1 Day Change
-$17.50 -$0.47 -$5.81 $15.10 -0.03%

Good Morning, Domestic markets generally performed poorly yesterday after ADP Employment numbers were released early in the day. A loss of 500k jobs was expected, however a near 700k loss in addition to a large negative revision of the prior figures put negative pressure on dollar denominated assets. Equities fell yesterday by the most since the start of December, with most indices falling around 3%. The dollar performed poorly as well, selling off against nearly every major currency pair. The Bank of England cut rates today by 50 basis points, to 1.50%. This is now the lowest rate since the BOE's conception in 1694. Following in the footsteps of the United States, it seems the UK may soon begin a quantitative easing program as there is not much room left to reduce the benchmark rate. The pound has strengthened nearly 2% this morning versus the dollar since the announcement. Oil fell by nearly 12% yesterday off much higher than expected domestic inventory figures. Consensus was for around 800k of excess inventory; however actual figures were in the area of 6.7 million. Higher inventories (especially of this magnitude) point towards weakened demand and lower prices. Speculation that the ECB will fail to significantly cut rates has begun as Jean Claude Trichet has signaled that previous action needs time to be digested by the market. His warnings of risks associated with further aggressive cuts have some doubting a significant cut on January 15th. After strengthening nearly 3% yesterday, the euro has given back some of those gains this morning. If yesterday's employment numbers are any indication, it is expected that Initial Jobless Claims this morning should be a notable figure. Dewey Briglia, Foreign Exchange Analyst dewey.briglia@wachovia.com

Disclaimer: The information provided in this document has been obtained or derived from sources believed to be reliable. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee its accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.

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