MORNING BRIEFING: EURUSD still confined within the range 1.3959 – 1.4450. US employment report this afternoon.

[RTFX-Trading]

MORNING BRIEFING: EURUSD still confined within the range 1.3959 – 1.4450. US employment report this afternoon.

What’s new:
G20: Finance ministers meet today and tomorrow in Great Britain.
G20: US Treasurer proposes to tighten supervision on banks.
G20: Darling declares that it is too early to discuss exit strategies.
G20: Sarkozy, Merkel and Brown want stricter rules on bonuses.
Stiglitz (Nobel Prize winner in 2001): Chances of a robust rebound in the US economy are very weak.
OCDE: Global economy should exit recession in Q3 2009.
United States: Services sector improves in August.
United States: Slight decline in weekly jobless claims.
ECB: Kept interest rates unchanged, foresees a gradual recovery. Changed its projections for inflation and GDP.
Euro zone: Decrease in retail sales in July, while the service sector shows slight improvement.
United Kingdom: Service sector improves to a 2 year high in August.

Today:


Overnight Rates and Indices:
EURUSD: 1.4269 – 1.4236.
USDCHF: 1.0637 – 1.0611.
GBPUSD: 1.6353 – 1.6305.
EURJPY: 132.28 – 131.76.
USDJPY: 92.77 – 92.51.
DowJones: 9'344 +0.69%.
NASDAQ: 1’983 +0.82%.
S&P 500: 1’003 +0.85%.
Nikkei: 10’196 -0.17%.
Shanghai: 2'850 +0.20%.
Gold: $990.60.
Crude Oil: $68.24.
 
Comments:

Finance ministers of G20 economies will meet today and Saturday in England. Exit strategies from the crisis will occupy a prominent place in discussions. However, the market expects recommendations to wait before putting them in place.

   
Today, the employment figures from the United States for August are expected: investors fear that despite the signs of recovery, this cannot be supported by American households depressed by a steady rise in unemployment. The market expects 225,000 jobs were lost in the nonfarm sector in August, while unemployment rate is expected to increase slightly to 9.50%.

Metals are clearly on the rise, silver has jumped from $15.35 an ounce to $16.25 in 24 hours, an increase of nearly 6%, while gold has jumped from $975 to $997.50 an ounce, up by 2.50%. Metals broke the very important technical levels, such as the trend line on the daily chart located at $985. RTFX Trend had anticipated this increase, it is bullish from $14.74 since August 28 on silver and bullish from  $956.22 from September 1st on gold.

The European Central Bank left rates unchanged, the main interest rate of the ECB remains at 1%, the rate of deposit facility at 0.25% and the marginal lending rate at 1.75%. Although the ECB does not anticipate a progressive economic recovery, it has raised its forecast for GDP this year to -4.40% / -3.80% from -5.10% / -4.10%. They anticipate a modest growth of 0.20% next year. On the subject of exit strategies, the ECB said it is too early to put an end to its ‘Quantitive Easing’ measures. The president, Jean-Claude Trichet, said that the ECB would again inject funds this month, a year since the interest rates were reduced to just 1%.

These statements from the ECB did not provide any new indications and the market will now be focused on the US employment report, before the long weekend, as Monday is closed in the United States. The range 1.3950 - 1.4450 is still being monitored. We should move out of this range at the beginning of next week, which should trigger a trend in the coming weeks.

Good Day.

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