Inter Bank

Currency	Bid	Ask
EUR	121.9502	122.5197
GBP	132.2745	134.0952
SGD	58.8886	59.7084
AUD	74.5248	75.2702
CAD	78.7635	79.8267
SAR	22.0056	22.1196
OMR	214.0941	215.6089
DKK	16.2947	17.2541
KWD	286.3518	288.7505
HKD	10.3226	11.087
AED	22.5	22.6
USD	83	83.2

Forex News

European Market Update

Norway inflation data gives Norges the excuse it needs to raise interest rate later this month

ECONOMIC DATA

(FI) Finland Aug Industrial Production M/M: -0.3% v 2.0%e

(GE) German Aug Trade Balance: €8.1B v €12.0Be; Exports M/M: -1.8% v 1.9%e; Imports M/M: 1.1% v 0.9%e; Current Account: €4.6B v €8.8Be
(GE) German Sept Final Consumer Price Index M/M: -0.4% v -0.3%e; Y/Y: -0.3% v -0.3%e
(GE) German Sept Final CPI-EU Harmonized M/M: -0.5% v -0.4%e; Y/Y: -0.5% v -0.4%e

(FR) French Aug Industrial Production M/M: 1.8% v 0.3%e; Y/Y: -10.8% v -13.3%e
(FR) French Aug Manufacturing Production M/M: 1.9% v 0.6%e; Y/Y: -11.5% v -13.9%e

(CZ) Czech Sept CPI M/M: -0.4% v -0.4%e; Y/Y: 00% v 0.0%e

(DE) Danish Aug Current Account (DKK): 5.0B v 5.0Be; Trade Balance X Shipping: 4.6B v 5.0Be

(IT) Italian Aug Industrial Production M/M: 7.0% v 1.5%e; Y/Y: -18.3% v -17.8%e; Industrial Production WDA Y/Y: -14.5 v -18.2%e

(NO) Norwegian Sept CPI M/M: 0.8% v 0.5%e; Y/Y: 1.2% v 0.9%e; Underlying CPI M/M: 1.1% v 0.7%e; Y/Y: 2.4% v 2.0%e
(NO)Norway Sept Producer Prices M/M: -6.0% v 4.9% prior; Y/Y: -6.7% v -1.2% prior

(UK) Sep PPI Input M/M: -0.5% v -0.8%e; Y/Y: -6.5% v -6.8%e
(UK) Sep PPI Output M/M: 0.5% v 0.1%e; Y/Y: 0.4% v -0.1%e
(UK) Sept PPI Output Core M/M: 0.5% v 0.2%e; Y/Y: 1.4% v0.9%e
(UK) Aug Visible Trade Balance: -£6.2B v -£6.3Be; Total Trade Balance: -£2.3B v -£2.3Be; - Trade Balance Non EU: -£3.0B v -£3.6Be

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

In equities news overnight: With the return of mainland China, Asian trading returned to full strength. Chinese markets posted solid gains of 4.75-5% and led a North Asian equity rally. South and East Asian bourses traded lower led by declines in India and the surrender of some gains in Australia. Asian trading also saw the eagerly anticipated opening of Winn Macau [1128.HK] in Hong Kong trading. Winn priced at the top end of its range and put forward a strong performance, closing +6.5% but off its best levels. Investors and analysts have been eyeing the IPO as a sign of Chinese domestic consumer confidence and as a sign of the opening of Hong Kong to US listed firms. European bourses opened in negative territory on the back of weight in basic resource names and the utility sector. Markets climbed off solid French and Italian industrial and manufacturing date. The 4:00EST release of IEA 2010 oil demands, showing a fourth consecutive increase provided further rally to equities. Following this positive rotation, disappointing UK PPI data at 4:30EST turned equity trending negative for the second time, with Europe's main bourses re-entering negative territory soon after. In analyst notes, BNP Exane raised the European Insurance sector to outperform, this call has led to out performance in shares of CNP Assurances [CNP.FR] and Allianz [ALV.FR]. Past 5:30EST, markets continue to trade slightly negative with a downward trend on mixed volumes.

-In individual equities: Lloyds [LLOY.UK] Lloyds and RBS respond to press speculation regarding lending levels. RBS -Approving approx 85% of applications from businesses. Lloyd's -Continuing to focus on lending proper commercial terms. || Telefonica [TEF.SP] Expects to pay 2010 dividend of approx €1.4/share; Reiterates 2010 FY EPS target of €2.1/share. Expect revenue growth of 1-4% through 2012. || John Wood [WG.UK] Provides interim statement: Believes 2009 performance will be in line with expectations. || Standard Chartered [STAN.UK] Has filed a draft prospectus with India's Securities regulator regarding plan to issue depository receipts in the country - Indian Press. The bank may be seeking to raise INR30-50B ($627-1.1B). || Givaudan [GIVN.SZ] Reports 9 month Rev CHF3.03B v CHF3.0Be. || Actelion [ATLN.SZ] Phase III Study commences in Patients with Multiple Sclerosis, company to receive $20M milestone payment from Roche. ||

Speakers: ECB's Trichet coometed that the Central bank's reputation was to act when deemed appropriate || China Vice President Xi Jinping commented that China and EU should strengthen relationship on macro economic views and oppose protectionism. He also noted that the economic recovery would be a long process and would maintain its 'moderately loose' monetary policy || Japan Fin Min: Fujii again spoke on the dollar and again blamed the accommodative US monetary policy as a factor for weak USD trend. He also noted that the US was paying attention to USD price movement ||

In Currencies: The price action was somewhat subdued during the European morning as the USD maintained a consolidating tone against the major pairs aided by the comments from Fed's Bernanke during the Asian morning. Dealers noting that G7 members starting to morph into more traditional language of concern about the valuation of the USD, including Japan's Fin Min Fujii. Norwegian September core inflation unexpectedly accelerated to 2.4% and has market participants expecting that Norges Bank would be the next central bank to raise interest rates with analyst calling for a 25 bps hike later this month. The GBP was softer in the session despite the UK September PPI coming in above expectations. EUR/GBP cross-led the price action as it tested the 0.9240 level and the GBP/USD dip back below the 1.60 level was a result. Elsewher, dealers were keen to point out the parity calls for the AUD/USD pair with some nice option flows being transacted with a 1.0000 strike over the next quarter. Dealers surmised that the Norwegian Nobel committee in Oslo must be long USD after awarding US president Barack Obama the 2009 Nobel Peace Prize.

In Fixed Income: Government bonds were hit on the European open as traders digested relatively hawkish comments from the Fed's Bernanke overnight as well as reports of emerging divisions within the FOMC in the NYT. The FT also revisited the reverse reop story, claiming that the NY Fed has begun trial runs with various primary dealers. The short end was unsurprisingly under the most pressure on both sides of the Atlantic and the two year Schatz yield moved as high as 1.33%. Yield curves are still flatter despite the long end recovering lost ground as the session wore amidst profit taking in equities. The 10 year Note is stting just abnove 3.25%, the 10y Bund, which has under-performed is yielding 3.14%, whilst 10-year Gilts are steady at 3.37%.

In Energy: IEA Monthly Report raised its 2010 global oil demand by 350K bpd to 86.1M bpd on the back of Non-OECD demand. This is the fourth consecutive increase for 2010 global demand and comes on the back of the Oct 1st IMF upward revision of its 2010 GDP forecast to 3.1% from 2.5% prior. The IEA also again raised its 2009 global oil demand by 200K bpd to 84.6M bpd. Sept global oil supply at 84.9M bpd, up 310K bpd. It saw OPEC Sept compliance at 62% compared to 66% prior

In commodities: Gold failed to hit fresh all-time highs for the first time in four days as it drifted lower to teste$1,045/oz

In the papers: NY Times comments on a possible rift among Fed members regarding when to hike interest rates. The article noted recent hawkish comments out of the Fed members including Hoening, Fisher, Lacker, Plosser and Warsh. By contrast, some top Fed officials in Washington and NY have repeated emphasized that the economy is still weak. The article pondered where Fed Chairman Bernanke position stands in this debate remained unclear.

NOTES

US President Obama awarded Nobel Peace Prize for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples

Fed's Bernanke: bank is ready to tighten monetary policy once the economy improves

German exports unexpectantly decline in Aug

Looking Ahead

7:00 (CA) Canadian Sep Net Change in Employment: 5.0Ke v 27.1K prior, Unemployment Rate: 8.8%e v 8.7% prior

8:30 (US) Aug Trade Balance: -$43.0Be v -$32.0B prior

8:30 (CA) Canadian International Merchandise Trade: -C$0.9Be v -C$1.4B prior.

10:30 (CA) Canadian Q3 Business Outlook Future Sales: 34.0e v 38.0 prior

15:30 (MX) Mexico Aug Final Trade Balance: No estimate versus -835M prior

Asian Market Update

Bank of Korea stays on Hold at 2.00%, to assess second-half growth before policy changes; USD higher after BOK decision, Bernanke hints of exit from excess liquidity

ECONOMIC DATA

(NZ) New Zealand Sept Card Spending M/M: 0.7% v 0.2% prior

(JP) Japan Aug Machine Orders M/M: 0.5% v 2.1%e; Y/Y: -26.5% v -25.4%e (5-month high)

(KS) Bank of Korea leaves 7-day repo rates unchanged at 2.00% as expected
(KS) South Korea Sept PPI Y/Y: -2.6% v -3.0% prior

SPEAKERS/PRESS

Asian equity markets look to finish the week on solid footing, rising across the board following the decision to maintain an accommodative stance at the Bank of Korea, the next in line G20 central bank to consider a rate hike. Korea's Kospi has shrugged the mantle of liquidity drain worries plaguing the index the entire weak, leading the way with a 1.8% gain. With just about 2 hours to go in Tokyo, Nikkei is also well bid by nearly 1.5%, while Shanghai Composite is looking to catch up to this week's regional rally with a 3.8% advance. In Sydney, S&P/ASX is lagging the Asia rally, trading flat as commodities fall on some cautious commentary by Aussie officials. Ahead of the Friday session, front-month S&Ps are also near-flat at 1,064.

Commentary from the Bank of Korea was far less of a close call than anticipated, suggesting the markets may have gotten caught up in the post-RBA tightening euphoria. Governor Lee saw upward inflation pressures remaining weak and uncertainty reigning over the economy despite the real-estate boom. There, Lee noted that the property market alone does not decide rate policy. Additionally, Lee said the economy appears stronger from the production rather than the demand side, and while Q3 GDP may advance beyond estimates, Q4 would still be weaker. Regarding Australia central bank decision, BOK Governor said the hike is not necessarily indicative of the start of full exit strategy. Aussie officials appeared to echo the caution expressed in Korea. Treasury Secretary Henry said that all of recent growth was the result of the stimulus enacted, forecasting the exit to detract as much as 1.25% from Australia's GDP in 2010. Moreover, despite the upside surprise in Aussie labor data, Henry saw jobless rate continue to rise toward IMF estimates of 7%, putting 2011/12 as the first year of above-trend growth. Elsewhere in Asia, Japanese press said the DPJ administration was planning emergency measures to deal with the unemployment situation.

Stateside, testimony from Fed Chairman Bernanke was perceived on balance as increasingly more hawkish. Although the Fed chief said accommodative policy is needed for an extended time, he saw tighter policy more warranted as recovery takes hold, suggesting the Fed has many tools to tighten at the appropriate time. Particularly striking were some of the specifics and conditions considered by the Fed Chairman as he pointed to expansionary fiscal policy being taken into account, also stating that higher rates on bank reserves is one of the ways to hike fed funds. Overall, the dollar rallied in the wake of the Bernanke speech while benchmark Treasury yields moved toward 3.27% from 3.25% intraday low.

EQUITIES

In individual equity movers, Australia's gold-producer Newcrest gained about 3% despite the $10 slide in gold prices after Australian Financial Review said the company may be the target of a hostile bid by Newmont Mining. In Nikkei auto sector, Honda increased its FY09/10 domestic total sales forecast to 655K units from 600K units, and JPMorgan raised its outlook to Overweight for Nissan and cut its outlook to Underweight for Toyota. In other market-moving analyst actions, Nintendo rallied sharply after Citi raised it outlook to Buy from Hold. Elsewhere in Tokyo, Mitsubishi announced a debt raise of ¥120B, while Japanese press saw Toshiba boosting its LCD TV sales to 18M units in FY2011, up 80% increase from projections for FY09.

CURRENCIES/FIXED INCOME/COMMODITIES

In currencies, broad based USD rally after Bernanke testimony and BOK decision saw EUR fall from 1.48 to 1.47 against the greenback. Sterling briefly tested the downside of 1.60, while USD/CHF rose as high as 1.0320. Traders have also reversed their bullish JPY bets, with USD/JPY rising nearly 100 pips to 89.30, and EUR/JPY and GBP/JPY crosses rising to 131.50 and 143.00 respectively - also triple digit pip gains. In commodity FX, USD strength sent AUD/USD and NZD/USD to 0.9020 and 0.7390 lows.

Crude oil and gold prices are lower on a combination of comments from the Fed Chairman Bernanke and profit taking, as both commodities have risen sharply this week. Oil prices have declined by more than 0.4%, after gaining more than 2.9% at the close of the NY floor session. Spot Gold prices are lower by more than 0.5%, as the metal moved below $1,050/oz, following comments from the Feds' Bernanke sparking USD strength. During the NY COMEX session, gold prices rose to a fresh record high for the 3rd consecutive session. In terms of physical demand for gold, the SPDR Gold Trust ETF noted that its holdings remained unchanged as of Oct 8 and this is the first time this week that the fund did not increase its holdings. Overall, gold has risen by more than 4% this week on the weaker dollar. In Shanghai, copper prices and most other metals prices are sharply higher, as Chinese metals play catch up to this week's rally in the LME metals.

International Forex Rate

Major Currencies
Currency		Units per USD	USD per Unit
Australian Dollar	AUD	1.2488	0.8008
Canadian Dollar	CAD	1.0903	0.9172
Euro	EUR	0.7074	1.4137
Japanese Yen	JPY	95.4654	0.0105
Pakistan Rupee	PKR	81.11	0.0123
U.A.E Dirham	AED	3.6727	0.2723
UK Pound Sterling	GBP	0.6179	1.6185
US Dollar	USD	1	1

Other Currencies
Currency		Units per USD	USD per Unit
Afghanistan Afghanis	AFN	50.0901	0.02
Albania Leke	ALL	94.0275	0.0106
Algeria Dinars	DZD	72.11	0.0139
Argentina Pesos	ARS	3.7442	0.2671
Bahamas Dollars	BSD	1	1
Bahrain Dinar	BHD	0.377	2.6523
Bangladesh Taka	BDT	68.95	0.0145
Barbados Dollars	BBD	2	0.5
Bermuda Dollars	BMD	1	1
Brazil Reais	BRL	1.972	0.5071
Bulgaria Leva	BGN	1.3832	0.723
CFA BCEAO Francs	XOF	464.0141	0.0022
CFA BEAC Francs	XAF	464.0141	0.0022
Chile Pesos	CLP	563.735	0.0018
China Yuan	CNY	6.8293	0.1464
Colombia Pesos	COP	2138.5	0.0005
Comptoirs Francais du Pacifique Francs	XPF	84.4135	0.0118
Costa Rica Colones	CRC	577.3	0.0017
Croatia Kuna	HRK	5.202	0.1922
Czech Republic Koruny	CZK	19.04	0.0525
Danish Krone	DKK	5.2614	0.1901
Dominican Republic Pesos	DOP	35.9001	0.0279
East Caribbean Dollars	XCD	2.685	0.3724
Egypt Pounds	EGP	5.6167	0.178
Estonia Krooni	EEK	11.0682	0.0903
Fiji Dollars	FJD	2.1272	0.4701
Hong Kong Dollar	HKD	7.7525	0.129
Hungary Forint	HUF	200.39	0.005
Iceland Kronur	ISK	121.695	0.0082
IMF Special Drawing Rights	XDR	0.6514	1.5352
Indian Rupee	INR	47.12	0.0212
Indonesia Rupiahs	IDR	10202.5	0.0001
Iran Rials	IRR	9683.5	0.0001
Iraq Dinars	IQD	1158.6	0.0009
Israel New Shekels	ILS	3.98	0.2513
Jamaica Dollars	JMD	88.4806	0.0113
Jordan Dinars	JOD	0.709	1.4104
Kenya Shillings	KES	78.35	0.0128
Kuwaiti Dinar	KWD	0.2872	3.482
Lebanon Pounds	LBP	1509.5	0.0007
Malaysian Ringgit	MYR	3.485	0.2869
Mauritius Rupees	MUR	32.4003	0.0309
Mexico Pesos	MXN	13.1225	0.0762
Morocco Dirhams	MAD	7.9679	0.1255
NewZealand $	NZD	1.5603	0.6409
Norwegians Krone	NOK	6.2891	0.159
Omani Riyal	OMR	0.3851	2.597
Peru Nuevos Soles	PEN	3.02	0.3311
Philippines Pesos	PHP	47.1143	0.0212
Poland Zlotych	PLN	3.1877	0.3137
Qatari Riyal	QAR	3.6402	0.2747
Romania New Lei	RON	2.9634	0.3375
Russia Rubles	RUB	30.8535	0.0324
Saudi Riyal	SAR	3.7503	0.2666
Singapore Dollar	SGD	1.4437	0.6927
South Africa Rand	ZAR	7.9428	0.1259
South Korea Won	KRW	1252.85	0.0008
Sri Lanka Rupees	LKR	114.92	0.0087
Sudan Pounds	SDG	2.345	0.4264
Swedish Korona	SEK	7.5542	0.1324
Swiss Franc	CHF	1.0678	0.9365
Taiwan New Dollars	TWD	32.5045	0.0308
Thai Bhat	THB	34.3125	0.0291
Trinidad and Tobago Dollars	TTD	6.23	0.1605
Tunisia Dinars	TND	1.3469	0.7424
Turkey New Lira	TRY	1.5366	0.6508
Venezuela Bolivares Fuertes	VEF	2.15	0.4651
Vietnam Dong	VND	17770	0.0001
Zambia Kwacha	ZMK	5100	0.0002