MORNING BRIEFING: “Carry trades” are lower following an article from the WSJ spoke about a possible new US banking crisis. Bernanke to speak at 16h00

[RTFX-Trading]

MORNING BRIEFING: “Carry trades” are lower following an article from the WSJ spoke about a possible new US banking crisis. Bernanke to speak at 16h00 CET.
    
What’s new:
United States: Industrial activity restarts in Philadelphia.
United States: 4th consecutive month of risisng indicators.
Switzerland: ZEW index increased sharply to 18.6 in August.
Switzerland: Trade surplus reaches CHF 2.35 billion in July.
United Kingdom: Retail Sales fall to 0.40% in July.
Japan: Mizuno (BoJ) said that recovery is fragile.

Today:



Overnight Rates and Indices:
EURUSD: 1.4269 – 1.4208.
USDCHF: 1.0656 – 1.0621.
GBPUSD: 1.6519 – 1.6420.
EURJPY: 134.49 – 132.91.
USDJPY: 94.29 – 93.49.
DowJones: 9’350 +0.76%.
NASDAQ: 1’989 +1.01%.
S&P 500: 1’007 +1.09%.
Nikkei: 10’187 -1.89%.
Gold: $937.80
Crude Oil: $72.20
 
Comments:
   
A quiet day yesterday on the foreign exchange market.  Contrasting US figures did not allow us to identify a trend in the Dollar: Weekly jobless claims rose against all expectations during the week to August 15th in the United States and the Philadelphia FED index rose more than expected. Wall Street closed on the rise, bringing in its wake renewed appetite for risk.
   
During Asia trading, the Nikkei's decline pushed investors to risk aversion; the Euro, the Pound, the Australian Dollar and New Zealand Dollar are falling, while the Japanese Yen and US Dollar are rising. This decrease in "carry trades" is due to an article in the renowned journal WSJ warning investors of a new crisis in the US banking sector.

Regarding the EURUSD currency pair, a renowned investor bought a DNT (Double No Touch) 1.3950 - 1.4450 for a month. It is expected that the EURUSD remains confined within this range until the end of September. Regarding orders, there is a range of sellers at 1.4260-80, whereas some stop losses are placed above 1.4300. On the downside, buyers are seen at 1.4190-1.4210.

The market should remain calm until the speech from the President of the Federal Reserve (FED) Ben Bernanke, nicknamed "helicopter Ben" after his speech in November 2002. The foreign exchange market is now reacting to the in hurricanes situation in Central America and the movements of the Chinese stock market.

A very interesting trading day before the week-end!!!

Emman Xuereb

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[cortot7]

Indeed persistent rumours are swirling around that a major 192 year old bank (probably american) will be in trouble shortly. On top of that mortgage deliquencies have risen to levels unseen before. I just wonder how long the propaganda machine of the "safe haven" dollar will work. People should start realising tha the US is flat bankrupt, and will be followed by many others on that route. Lets just hope to be the last in this race to the bottom....