MORNING BRIEFING: The risk appetite declines, the statements of China support the U.S. dollar.

[RTFX-Trading]

MORNING BRIEFING: The risk appetite declines, the statements of China support the U.S. dollar.

What's new:
Japan: Industrial production jumped from 5.90% in May
Germany: unexpected return of inflation in June
Switzerland: Slight recovery KOF economic barometer.
United States: a White House advisor said that a new rescue plan was not excluded.
United States: closure of two new banks in Georgia.
United States: increase of consumer spending in May

Today:
10h30 UK: mortgage approvals mai, expected 46'000, last 43'200.
10h30 UK: mortgage lending mai, expected 1.10Mrds, last 0.97Mrds.
11h00 Euro Zone : business climate june, expected -3.0, last -3.17.
11h00 Euro Zone : consumer sentiment june, expected -30, last -31.
14h30 Etats-Unis : national activity index mai, last -2.06.

Rates in Asia and Indices:
EURUSD :  1.4078 – 1.3985.
USDCHF:  1.0898 – 1.0819.
GBPUSD :  1.6522 – 1.6451.
EURJPY:  134.13 – 133.37.
USDJPY:  95.59 – 95.15.
DowJones : 8'439 -0.40%.
NASDAQ:  1’838 +0.47%.
S&P 500: 919 -0.40%.
Nikkei:  9’793 -0.85%.
Gold : $936.90
Oil : $68.76.

Comments:

The "carry trades" are down this morning following the closure Friday of two new banks in the United States, bringing to 42 the number of financial institutions closed this year in the United States. Another new this weekend hanging over the "carry trades" is the statement by a senior adviser to the White House who said that the U.S. economy remains under pressure and that if a new revival plan was needed, it would be studied. David Axelrod has also noted that the worst of the recession is not yet behind us.

The U.S. dollar is supported by statements of the Bank of China this weekend: Although the "BRIC" thinking of developing a global currency reserve assets, the governor of the Bank of China said that the nation will not change quickly its foreign reserve. Currently, China diversifies its reserves by buying raw materials, China has confirmed that it had purchased 235'000 tons of copper, aluminum 590'000 tons of aluminum, 190,000 tons of zinc and other amounts of Indium and titanium.

The two key this week is the meeting of the European Central Bank and the employment report U.S. later this week. I expect that the EURUSD remains in a range between 1.3820 - 1.4120 at the beginning of the week.

Have a nice week and happy trading.

Nicolas Longchamp
RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
Tel:  +356 23 31 00 00
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