additional forecast

Oil rally slows USD strength ahead of today's US Q2 GDP and tomorrow's key employment, ISM reports.

EURCHF knocking at key resistance. JPY crosses set to fall further?

MAJOR HEADLINES – PREVIOUS SESSION UK Jul. GfK Consumer Confidence out at -39 vs. -37 expected and -34 in Jun. Japan Jul. Nomura/JMMA Manufacturing PMI out at 47.0 vs. 46.5 in Jun. Australia Jun. Retail Sales out at -1.0% vs. 0.0% expected Australia Jun. Trade Balance out at 411M vs. -100M expected and May data revised up from -965M to -253M New Zealand Jul. NBNZ Business Confidence out at -43.2 vs. -38.7 in Jun. Japan Jun. Housing Starts out at -16.7% YoY vs. -17.8% expected Japan Jun. Construction Orders out at -11.7% YoY vs. -25.2% in May Switzerland Jul. CPI out at -0.4% MoM as expected UK Jul. Nationwide House Prices out at -1.7% MoM vs. -1.2% expected and -8.1% YoY

THEMES TO WATCH – UPCOMING SESSION Key Risk Events (All times in GMT) Sweden Jul. Consumer and Q2 Manufacturing Confidence (0715) Germany Jul. Unemployment Change (0755) Norway Jul. Unemployment Rate (0800) EuroZone Jul. CPI Estimate (0900) EuroZone Jun. Unemployment Rate (0900) Canada May Gross Domestic Product (1230) US Q2 GDP - first estimate (1230) US Weekly Initial Jobless Claims (1230) US Jul. Chicago PMI (1345) US Treasury Secretary Paulson to Speak (1700) Australia Jul. AiG Performance of Manufacturing Index (2330)

Market Comments Yesterday, the US House of Representatives narrowly rejected the so-called "oil speculation bill" that would have required position limits and the like in an attempt to prevent the accumulation of too many long positions by "speculators". The main reason for the bill failing to pass the vote had more to do with disagreement over expansion of drilling activity rather than the bill's core principles. This is a very dangerous area and market for the US legislature to be fiddling with as it would encourage the ambitions of oil futures exchanges elsewhere in the world (the bill theoretically also would have limited positions on foreign exchanges, but how in the world does the US expect to be able to establish authority elsewhere?) and could make the oil market far less liquid. The US Congress is scarily out of touch with reality. In any case, this news combined with a drop in gasoline inventories saw oil price rise sharply yesterday and they are now 6 dollars above recent lows. Oil could become a USD negative again if the sharp rise persists.