MORNING BRIEFING: Euro and growth linked currencies tumble, as investors dismiss G7 reassurance on Greece.

[RTFX-Trading]

MORNING BRIEFING: Euro and growth linked currencies tumble, as investors dismiss G7 reassurance on Greece.

What’s new:
G7: Reassures on Greece, take tough stance on banks.
G7: Japan’s Finance Minister Kan says world needs caution on excess liquidity.
United States: Non-farm payrolls at -20K for January, breaking expectations for a return to job growth.
United States: Obama says US economy turning corner to growth.
United States: Geithner says US in no danger of losing AAA rating.
United States: Geithner says no double dip slump but recovery will be slow.
United States: Saints defeat Colts, to claim first ever Super Bowl.

Today:


Overnight Rates and Indices:
EURUSD: 1.3678 – 1.3621.
USDCHF: 1.0773 – 1.0731.
GBPUSD: 1.5623 – 1.5536.
EURJPY: 122.41 – 121.57.
USDJPY: 89.50 – 89.15.
DowJones: 10’012.23 +0.10%
NASDAQ: 2’141.12 +0.74%
S&P 500: 1’066.19 +0.29%
Nikkei: 9’951.82 -1.05%.
Shanghai: 2’935.17 -0.14%,
Gold: $1’068.10
Crude Oil: $71.20
 
Comments:

At the G7 meeting held in Canada’s Arctic, European Ministers told their counterparts that they would make sure Greece sticks to its budget-cutting plan. However, this was not enough to ease the market’s growing concerns. The Euro fell back towards an 8 ½ month low hit on Friday, reached1.3621 in Asian Trading. Appetite for other growth-linked currencies also waned as the Australian Dollar and New Zealand Dollar fell to 0.8643 and 0.6858 respectively against the US Dollar. Stock markets also suffered blows as Japan’s Nikkei fell back to below the 10’000 mark, as large exporters registered losses due to a stronger Yen.

Weighing further on global equity markets was the decision by the G7 to put a tax on banks. Officials from the 7 countries said support was rising for a levy on banks, which could pay for global rescue of the financial system.

Meanwhile US Treasury Secretary Geithner quickly moved in to squash any doubts that the US may lose its AAA rating. Despite the Obama’s administration has predicted a $1.6 trillion budget deficit in 2010, Geithner insisted in an ABC interview that the US is in no danger of losing its debt rating. “Absolutely not” Geithner said, “That will never happen to this country” he added as he explained that investors around the globe turn to US Treasury securities and Dollar-denominated assets when concerned about global financial stability.

Have a nice day.

Emman Xuereb
Trading Desk
RTFX Ltd
Risk Disclaimer