Asian session: The euro declined

00:00 China Bank holiday

01:30 Japan Labor Cash Earnings, YoY December +0.5% +0.7% +0.8%

The euro declined toward a 10-week low against the yen before data today that may show retail sales fell in the region amid speculation the European Central Bank will reinforce its commitment to lower rates. Official data today may show that retails sales in the euro region fell 0.7 percent in December from a month earlier, according to the median forecast of economists surveyed by Bloomberg. They rose 1.4 percent in November, matching the biggest increase in 12 years.

The ECB will probably hold the benchmark interest rate at a record-low 0.25 percent at its policy meeting tomorrow as it faces slowing inflation, according to economists surveyed by Bloomberg News. The European Union’s statistics office said last week that consumer-price growth slowed in January to match the least since November 2009. After the Jan. 9 policy meeting, ECB President Mario Draghi said the central bank “strongly emphasizes” that it will maintain accommodative measures for as long as necessary.

The yen advanced against the currencies of New Zealand and Australia after Gross, who runs the world’s biggest bond fund at Pimco, said the pace of China’s economic growth is one of the greatest risks for financial markets. “I call China the mystery meat of emerging-market countries,” Gross said yesterday during an interview with Bloomberg Television. “Nobody knows what’s there and there’s a little bit of bologna, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.”

EUR / USD: during the Asian session, the pair traded in the range of $ 1.3510-25

GBP / USD: during the Asian session, the pair traded in the range of $ 1.6320-40

USD / JPY: on Asian session the pair fell to Y101.20

The data continues to come thick and fast on Wednesday, with the key early data the release of the European services PMI data. The European calendar gets underway at 0813GMT, with the release of the Spanish final January services PMI numbers, followed by Italy at 0843GMT, France at 0848GMT, Germany at 0848GMT and the Euro area amalgamated data at 0858GMT. Overall PMI numbers are seen as flat or modestly higher on December's number. In between, at 0830GMT, the German Chamber Of Trade and Industry, DIHK, issues its Spring business survey and forecasts, in Berlin. There is more eurozone data expected at 1000GMT, with the EMU December retail sales data set for release. Economists are looking for a fall of 0.7% on the month, higher by 1.5% on year.

The US calendar starts at 1200GMT, with the release of the MBA mortgage index for the Jan 31 week. At 1315GMT, the markets will get their first hint at Friday's non-farm payroll data when the January ADP National Employment Report is released. Analysts are looking for an add of 187,000 jobs. Canadian December Building Permits data will be released at 1330GMT. The US calendar continues at 1358GMT, when the January Markit Services PMI numbers are published. Federal Reserve Gov. Daniel Tarullo and SEC Chair Mary Jo White testify on the impact of the Volcker rule before the House Financial Services Committee in Washington, starting at 1500GMT. Also at 1500GMT, the January ISM non-manufacturing index will cross the wires, along with the January help-wanted online data. At 1530GMT, the EIA Crude oil stocks data for the Feb 01 week will cross the wires. There are further Fed appearances later in the day. At 1730GMT, Philadelphia Federal Reserve Bank President Charles Plosser will give a speech on the economic outlook, in Rochester. Atlanta Federal Reserve Bank President Dennis Lockhart delivers a speech on the economic outlook, in Birmingham, at 1840GMT.