MORNING BRIEFING : The ECB and the BOE monopolize attention this morning.

[RTFX-Trading]

MORNING BRIEFING :  The ECB and the BOE monopolize attention this morning.

What’s new :
US: slight improvement in jobs.
China: Warning to the United States if Obama meets Dalai Lama
Europe: Meeting of the European Central Bank
Europe: Meeting of the Bank of England (BOE)
France: IMF boss said it is ready to assist Greece
Switzerland: Trade surplus of CHF 1.4 billion

Today:


Rates in Asia and Indices:
EURUSD: 1.3902 - 1.3865.
USDCHF: 1.0607 - 1.0581.
EURUSD: 1.5919 - 1.5869.
EURJPY: 126.47 - 126.06.
USDJPY: 91.05 - 90.79.
Dow Jones: 10'270 -0.26%.
NASDAQ: 2'191 +0.04%.
S & P 500: 1'097 -0.55%.
Nikkei: 10'355 -0.46%.
Shanghai: 3'012 +0.28%.
Gold: $1'105.59.
Crude oil: $75.74.

Comments:
The National Employment Report (released yesterday afternoon) was better than expected by the markets, and has provided strong support for the Dollar which, after testing resistance against the EUR in the area of 1.40, the European market closed below 1.39 at 1.3897.

China warned yesterday the United States of the negative consequences on their relationship if a meeting between President Obama and the Dalai Lama, the spiritual leader of Tibetan people, would take place. The Chinese reaction only reveals the tension present between the two countries, already exacerbated by the sales of arms to Taiwan by the United States for a value of $ 6.4 billion. However, neither of these two countries has an advantage to reach the level of an economic war.

The USD should continue to attract buyers, supported by concerns over the EUR, generated by Greece and Portugal.
With the meeting of the ECB (European Central Bank) this morning, markets will focus on its rate decision, expected at 13:45 ECT, as well as on the press conference at 1430 ECT. Of course, the question of risk of defaulted payment by Greece will remain at the forefront. But the uncertain situations of Portugal and Spain and to a lesser extent that of Ireland will add fears.

These situations are making proposals and decisions for Mr. Trichet and his colleagues of the Governing Council of the ECB very delicate. This continues to weigh on the EUR, which after correcting earlier this week, comes under pressure again.

The Bank of England meets as well this morning, and its decision on rates, published at 1300 ECT, is also eagerly awaited.

In Paris, Mr. Strauss-Kahn, director of the IMF (International Monetary Fund) said that, if requested, the IMF is ready to intervene to help Greece to meet its budgetary problems, while at the same time he reaffirms its confidence in the Euro Zone.

Good day

Pascal Bovay

RTFX Ltd
Trading desk
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