MORNING BRIEFING : The Dollar benefits from reassuring declarations from Russia ; concerns about the European economy weigh on the Euro.

[RTFX-Trading]

MORNING BRIEFING : The Dollar benefits from reassuring declarations from Russia ; concerns about the European economy weigh on the Euro.

What's new?
Japan: BoJ maintains the status quo on interest rates at 0.10%.
Japan: BoJ to review upward its forecasts for the Japanese economy.
United States: NAHB Housing market index down to 15.
United States: The degradation of the 'Empire State' index increases in June.
United States: Net long-term capital flows (TIC) $ 11.2B.
Euro zone: Record decline in employment at an annual rate in Q1.

Today:
09h15 Switzerland : Industrial Orders Y/Y Q1, previous -8.80%.
10h30 United Kingdom: Consumer Price index May M/M, exp 0.30%, previous 0.20%.
10h30 United Kingdom: Retail Price index May, exp 0.20%, previous 0.10%.
10h30 United Kingdom: Retail Price index excluding Mortgage Payments M/M May, exp 0.30%, previous 0.40%.
11h00 Euro zone: ZEW Economic Sentiment Survey, exp 35.0, previous 31.1.
11h00 Euro zone: Consumer Price index May M/M, exp 0.00%, previous 0.40%.
11h00 Euro zone: Consumer Price index May Y/Y, exp 0.00%, previous 0.60%.
11h00 Euro zone: Consumer Price index excluding Food and Energy May Y/Y, exp 1.50%, previous 1.70%.
14h30 United States: Building Permits May, exp 500’000, previous 498’000.
14h30 United States: Housing Starts May, exp 490’000, previous 458’000.
14h30 United States: Producer Price index May M/M, exp 0.60%, previous 0.30%.
14h30 United States: Producer Price index excluding Food and Energy M/M, exp 0.10%, previous 0.10%.
15h15 United States: Capacity Utilization M/M May, exp 68.40%, previous 69.10%.
15h15 United States: Industrial Production M/M May, exp -0.90%, previous -0.50%.

Overnight Rates and Indices:
EURUSD: 1.3851 – 1.3748.
USDCHF: 1.0957 – 1.0877.
GBPUSD: 1.6323 – 1.6210.
EURJPY: 135.02 – 132.88.
USDJPY: 97.89 – 96.19.
DowJones: 8'612 -2.13%.
NASDAQ: 1’817 -2.28%.
S&P 500: 924 -2.38%.
Nikkei: 8’780 -2.58%.
Gold: $931.
Crude Oil: $70.04.
 
Comments:

Yesterday, the Dollar benefited from the reassuring statements from Russia on the Dollar’s status as reserve currency, while concerns about conditions in the Euro area have weighed on the Euro and "carry trades". Furthermore, a record 1.22 million jobs have been lost from sixteen countries in the first quarter.

As for the EURCHF currency pair, we are heading towards the threshold at 1.50, a very interesting level as regards this pair as the Swiss National Bank is likely to react to counter a further rise in the Swiss Franc against the Euro (it had intervened in the past by selling Swiss francs), pending the monetary policy meeting.   

In the United States, the significantly greater than expected decrease of the 'Empire State' index which measures changes in manufacturing activity in New York, as well as the lower housing market index (NAHB index) have challenged the hopes of mitigating the recession. Today’s data is therefore of vital importance, as numbers below expectations should still negatively affect the "carry trades", and therefore support the Yen and US Dollar.

Emman Xuereb
RTFX Ltd
Head Office

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