MORNING BRIEFING: One single flow can trigger a sharp move, especially when transaction is conducted in a period of low liquidity.

[RTFX-Trading]

MORNING BRIEFING: One single flow can trigger a sharp move, especially when transaction is conducted in a period of low liquidity.

What’s new:
Japan: Deflation sets in, unemployment shoots up.
United States: JPMorgan will lend $3B to California.
Taxation: Switzerland will cooperate with France on tax evasion. Will exchange bank information.
Switzerland: UBS do not intend to take toxic assets back from SNB.
IMF: Global economic recovery is in sight.
United States: Confirmed decline in GDP of 1.0% in Q2.
United States: Weekly jobless claims decline to 570'000.
Spain: GDP drops more than expected in Q2, demand in decline.
Euro Zone: 4th consecutive month of rising indicators.

Today:


Overnight Rates and Indices:
EURUSD: 1.4256 – 1.4220.
USDCHF: 1.0701 – 1.0676.
GBPUSD: 1.6250 – 1.6210.
EURJPY: 134.44 – 133.26.
USDJPY: 94.29 - 93.58.
DowJones: 9'580 +0.39%.
NASDAQ: 2’027 +0.16%.
S&P 500: 1’030 +0.28%.
Nikkei: 10'489 +0.15%.
Shanghai: 2'854 -3.12%.
Gold: $949.25.
Crude Oil: $72.54.
 
Comments:

Wall Street ended the day yesterday in green for the 8th straight session, bringing in its wake a return of risk appetite and a falling US Dollar. The latter fell violently in a few minutes last night in New York at 20:00 CET. According to our sources, this was due to a selling of a package of millions of USDCHF. The Dollar fell in a few minutes from 1.4275 to 1.4405 against the Euro, from 1.0670 to 1.0525 against the Swiss Franc, from 93.70 to 93.25 against the Japanese Yen and from 1.6210 to 1.6300 against the Pound.
   
This movement of yesterday is yet another classic example of what a single flow can trigger when transactions are conducted in a period where liquidity is low.

The market will be focused on the G20 meeting next week in London. We do not expect a change in attitude, the status of the Dollar as reserve currency should not be on the agenda. As for Japanese elections this weekend, they should trigger major moves next week.

Good Weekend.

Emman Xuereb

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