Last week positive readings were released with surprisingly elevated reading for the Canadian Ivey Purchasing Managers Index (PMI) rising to 64.1 from63.5 in December suggesting a major improvement in the market’s future activity and better than expected housing data with a boost of 11.1% in the Canadian building permits, highest jump since June 2007. Is Canada on a strong recovery path? Let’s Start:

Last week ECB president Mario Draghi’s remark at the ECS press conference provided a loop hole to contribute to the Greek bailout, by suggesting to distribute profits from Greek bonds to Greece. Meantime Greece is in a vicious cycle while the austerity measures posed by the EU paralyze market activity lowering consumption which in turn produces less tax revenues to cover its growing debt. Will Draghi’s suggestion help the struggling nation? Let’s start:

World Economic Forum (WEF) Annual Meetings – Day 2, this time is held in Davos for Bankers, Political, trade & finance Ministers and Commercial leaders from around 90 countries. Can influent market volatility.

We summarize this week Existing Home Sales in the US and Retail Sales in the UK are the major events this day. Here is an outlook on the market-movers awaiting us.

Here’s an update on technicals, fundamentals and what’s going on in the markets.

In the US, Unemployment Claims, weekly report to value the unemployed that filed for insurance, due to reduce by 10K from the last month down to 389K.

In the US, Empire State Manufacturing Index, monthly survey to value the general business conditions, rise is predicted from 9.5 points on December up to 10.7 now.

At first, things were looking good for the euro – the single currency enjoyed Draghi’s confidence regarding the success of the LTRO operation. The aversion of a credit crunch is far from certain, after Friday’s events. France lost its perfect AAA rating, together with other euro-zone countries. In addition, Greece is on the brink of default after the talks about a haircut broke down. Will the ECB replace the private sector and take a hit on Greek bonds? Greek banks are in worse shape than estimated. Together with the breakdown of Greek PSI talks, the Greek troubles are not priced in. While Germany and Spain look better (and this pushes the euro higher), Italy remains in trouble, Portugal moves closer to default and Greece is widely seen as defaulting.

Last week, positive housing data with new housing starts increasing unexpectedly to 200,200 units in December from 186,000 inthe previous month with a rise in multiple urban starts. Meantime new housing price index also increased above predictions gaining 0.3%. However the total value of building permits dropped by 3.6%, mostly inOntario. Will the housing sector continue to thrive ?

Last week, the European Central Bank President Mario Draghi communicated calm and satisfaction with the central bank’s LTRO program saying it has successfully combated credit erosion. That move only provided temporary calm to the markets, until the massive downgrade by S&P for euro-zone countries and the collapse of talks between Greece and the banks. Also US data is beginning to worsen.