Fed’s Bernanke is to discuss “unwinding” of liquidity plans before House Financial Committee on February 10. The centrepiece of the strategy, described by Fed officials in interviews and recent speeches, will be a new tool Congress gave the central bank in October 2008, the interest rate the Fed pays banks on money they leave on reserve at the central bank. Known as “interest on excess reserves”, this rate is now 0.25%. (WSJ)

Indices And Company News

US Treasury Secretary said this weekend that the US is in no danger of losing its Aaa debt rating even though the Obama administration has predicted a USD 1.6trl budget deficit in 2010. “Absolutely not,” Geithner said, when asked in an ABC News interview on Sunday whether a downgrade is a concern. “That will never happen to this country”. Geithner also said the risk of double dip has declined. (BBG)

Former Fed Chairman Alan Greenspan said it is “very difficult” to see US unemployment falling soon and that an economic recovery is “going to be a slow, trudging thing.” He also expressed concern about falling stock prices. However, US president Barack Obama said on Sunday the US economy has turned the corner and resumed growth. In other news, U.S. President Barack Obama said on Sunday the US economy has turned the corner and resumed growth. (BBG/AP)

Forex

The GBP remained under constant pressure ahead of the European open on the back the news from Pimco’s El-Erian that UK’s sovereign is most at risk to lose its AAA rating. In other news, the USD index traded in negative for most of the session due to the strength in commodities that in turn provided strength to commodity-linked currencies especially CAD. However, moving into the North American open, the USD index has pared back most of the earlier losses on renewed concerns over the economic situation in Greece.

New Zealand’s central bank governor said the worst-than-expected unemployment data last week has not altered the bank’s view on when it might start raising interest rates. (RTRS) In other news, China’s vice commerce minister said that CNY faces great pressure to appreciate and keeping CNY stable is good for both China and the World. (BBG)

Elsewhere, major economies with inflexible currencies must consider strengthening them if the global economy is to be weaned off its dependence on US spending and Asian savings, according to a G7 report. Also, Spain’s Zapatero said that all EU countries support all countries in Eurozone, adding that ‘we will defend the EUR’. (BBG/RTRS)

Commodities

Heading into the North American open, WTI crude futures are trading higher, supported by a weaker USD and cold temperatures which are forecasted to dominate along the east coast.

In OPEC news:

World supply is sufficient to meet demand during the H1 of 2010, according to Iran’s OPEC governor.

In geopolitical news:

Iran’s President Ahmadinejad gave instructions on Sunday for the production of higher-grade nuclear reactor fuel, prompting the US and Germany to threaten carefully targeted new sanctions against Tehran.

German government spokesman said that Iran’s comments at weekend show Tehran not cooperating with IAEA and will watch Iran’s actions in next days very closely, then could raise diplomatic pressure.

Finally, according to an envoy, Iran has formally told IAEA of its uranium enrichment plan.

In corporate news:

A militant group in Nigeria’s southern oil region said it “disabled” a trunk oil pipeline operated by Royal Dutch Shell, renewing attacking to win local control of oil revenue.

BP said it planned to shut a unit at its Texas City, Texas, oil refinery yesterday to repair a steam leak on a furnace. In other news, co. put a resolution protesting the investment risks of the co.’s Canadian-oil sands project on the agenda for the shareholder meeting April 15.

ENI has revoked the sale and repurchase agreement it signed in December for the acquisition of Ugandan oil assets from Heritage Oil. Co. will re-channel the resources earmarked for the investment to other projects, including the Zubair field in Iraq and the Junin 5 field in Venezuela said a co. spokesman.

On a technical note:

Bank of America says that downside risks to crude oil prices have diminished with various economic data points suggesting that the worst is over for oil demand. As a result of the better outlook for demand, the marked put skew present in WTI contracts in the past 12 months has come in considerably. While the macro environment still presents a downside risk, Bank of America sees WTI prices supported above the USD 70/bbl levels and trading towards an average of USD 92/bbl in 2H2010.

Weather news:

The latest Weather Derivatives forecast released last Friday sees temperatures for the next 6-10 days in the US to be 4.6F below the average for this time of year, with colder temperatures seen in the south-central. The National Hurricane Centre (NHC) reports that there are no tropical cyclones at this time.