MORNING BRIEFING: The Dollar suffers following resumption of gains in the stock market .

[RTFX-Trading]

MORNING BRIEFING: The Dollar falls following resumption of gains in the stock market .

What’s new?
Japan: Auto market declines 4.20% in one year in July.
China: Industrial activity on the rise in July.
United States: 5 banks close on Friday, 69 bankruptcies expected this year.
United States: Recession slowing but consumption falls.
United States: Economy contracts by 1.0% in 2nd quarter 2009.
United States: Cost of labor up 0.4% in the 2nd quarter 2009.
Euro Zone: Unemployment rising, inflation declines.
Switzerland: KOF leading indicator at -0.99% in July.

Today:
08h00 Germany: Retail Sales M/M June, exp 0.50%, previous -1.30%.
07h48 France: Manufacturing PMI July, exp 47.9, previous 45.9.
07h53 Germany: Manufacturing PMI July, exp 45.2, previous 40.9.
07h58 Euro zone: Manufacturing PMI July, exp 46.0, previous 42.6.
08h28 United Kingdom: Manufacturing PMI, exp 47.7, previous 47.0.
14h00 United States: Construction Spending M/M June, exp -0.50%, previous -0.90%.
 
Overnight Rates and Indices:
EURUSD: 1.4309 – 1.4228.
USDCHF: 1.0724 – 1.0657.
GBPUSD: 1.6778 – 1.6696.
EURJPY: 135.44 – 134.68.
USDJPY: 94.85 – 94.62.
DowJones: 9'171 +0.19%.
NASDAQ: 1’978 -0.29%.
S&P 500: 987 +0.07%.
Nikkei: 10’328 -0.27%.
Gold: $954.20.
Crude Oil: $70.12.
 
Comments:

The Dollar is penalized by the resumption on the stock market: the S&P 500 marked 5 consecutive months of increases and has gained almost 50% since reaching a new low back in March. Two thirds of organizations in the S&P 500 have posted their results, with 74% of those exceeding expectations. The Dollar also suffered from the publication of GDP numbers from the United States, as they fell less than expected in the 2nd quarter due to the rebound in investment. Adjustment of positions at month-end amplified changes in the exchange rates.

Anticipated events for this week include, ECB and BoE meetings  and interest rates announcements and the employment report from the US on Friday, which should be favorable for a renewed appetite for risk. The European Central Bank and the Bank of England are expected to leave rates unchanged, while the report on employment from the United States should show a moderate pace of job destruction. In EURUSD, we note sellers in the 1.4280-1.4300 area, and stop orders buyers above 1.4320.

Have a good week

Emman Xuereb
RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
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