MORNING BRIEFING: China calls for a reform of the reserve currency system, France backs demands. Last day of G8 summit in Aquila.

[RTFX-Trading]

MORNING BRIEFING: China calls for a reform of the reserve currency system, France backs demands. Last day of G8 summit in Aquila.

What’s new?
G8: China calls for reform of reserve currencies.
G8: France calls for the establishment of a “multimonetary” system.
United States: Warren Buffett believes that a second ‘stimulus’ plan may be necessary.
Switzerland: New double tax agreement with Britain.
United States: Ninth straight decline in wholesale inventories in May.
United States: Weekly jobless claims decline to 565'000.
United Kingdom: Rates unchanged at 0.50%, maintains asset purchases at £ 125B.
United Kingdom: May Trade deficit reaches lowest level in 3 years.

Today:
08h45 France: Industrial Production M/M May, exp 0.00%, previous -1.40%.
10h30 United Kingdom: PPI M/M June, exp 0.20%, previous 0.20%.
13h00 Canada: Change in unemployment June, exp -35'000, previous -41'800.
13h00 Canada: Unemployment Rate June, exp 8.70%, denier 8.40%.
14h30 United States: Trade Balance May, exp -30.2B, previous -29.2B.
14h30 Canada: Trade Balance May, exp -0.5B, previous -0.18B.
15h55 United States: Michigan Consumer Sentiment July, exp 70.5, previous 70.8.

Overnight Rates and Indices:
EURUSD: 1.4030 – 1.3957.
USDCHF: 1.0843 – 1.0779.
GBPUSD: 1.6346 – 1.6270.
EURJPY: 130.61 – 129.69.
USDJPY: 93.18 – 92.77.
DowJones: 8'183 +0.06%.
NASDAQ: 1’752 +0.31%.
S&P 500: 883 +0.35%.
Nikkei: 9’304 +0.15%.
Gold: $914.60.
Crude Oil: $60.42.
 
Comments:

Eight African countries joined the G8 and major emerging countries yesterday at the G8 summit in Aquila. Until now, there has been no major news to report: Other than the historic handshake between Gaddafi and Obama or the different agreements reached on the fight against global warming. No decision has been taken to date on the status of the Dollar as the main reserve currency. China has however called for a reform of the international reserve currency system, challenging, without specifying, the domination of the dollar on the global economy. The French president, Nicolas Sarkozy, also called for an international “multimonetary” system, which in my opinion backed the statements from China. Discussions on the status of the Dollar as reserve currency will intensify in the coming months…
   
The Dollar against the Swiss franc (USDCHF) is rising this morning following an article in a Swiss newspaper: the President of the Swiss National Bank, Roth, said an increase in the Swiss franc was undesirable, in order to avoid deflation. The SNB will intervene once again when it believes that the Swiss franc is too strong, probably when EURCHF approaches 1.5000 again.

Good Day.

Emman Xuereb
RTFX Ltd
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