MORNING BRIEFING: The EURUSD continued to increase following the rescue CIT.

[RTFX-Trading]

MORNING BRIEFING: The EURUSD continued to increase following the rescue CIT.

What’s new?
United States: BofA and Citigroup quality of consumer credits deteriorates..
United States: CIT clinches deal to avoid bankruptcy.
United States: White House expects GDP decline to be lower in Q2.
Euro zone: Trichet (ECB) urges France to cut expenses.
United States: Summers declare that the US economy has passed its worse.
United States: 3.60% increase in new house starts in June.
Euro zone: 1.9B trade surplus in May, less than expected.

Today:
08h00 Germany: PPI M/M June, exp +0.40%, previous 0.00%.
16h00 United States: Leading Indicators June, exp +0.40%, previous +1.20%.

Overnight Rates and Indices:
EURUSD: 1.4181 – 1.4100.
USDCHF: 1.0773 – 1.0719.
GBPUSD: 1.6413 – 1.6324.
EURJPY: 134.18 – 132.83.
USDJPY: 94.70 – 94.18.
DowJones: 8'744 +0.37%.
NASDAQ: 1’886 +0.08%.
S&P 500: 940 -0.04%.
Nikkei: 9’379 Closed.
Gold: $944.20.
Crude Oil: $64.08.
 
Comments:

The main headline from the weekend is the rescue of CIT. Established US credit specialist for small and medium-sized enterprises, has obtained a $3B contribution to avoid bankruptcy. The market has responded by going long on the Australian Dollar, New Zealand Dollar, the Pound and the Euro, while the Japanese Yen, Swiss Franc and US Dollar suffered a significant sell off. The AUD / JPY is up this morning from 75.40 to 76.40 (1.30%) and EURUSD rising close to 1.4180. There is a new set of buyer’s stop orders above 1.4200.

This week, the market will focus on the semi-annual monetary policy report from the President of the US Federal Reserve. Mr. Ben Bernanke will go before Congress tomorrow afternoon and Wednesday before the Senate. Investors expect that he will discuss possible from existing policies to revive the economy. Concerning monetary policy rates from the Fed, the market expects an increase of 75 basis points within the next 12 months, the first rate hike of 25 basis points is expected in January 2010, followed by another in March 2010.
Have a good week.
 
Emman Xuereb

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