MORNING BRIEFING: God save M. King! (and the GBP)!

[RTFX-Trading]

MORNING BRIEFING: God save M. King! (and the GBP)!

What’s new :
United States: At 16:00 CET beginning of Mr. Bernanke's testimony before Congress
United States: Big drop of the Consumer Confidence Index for February surprise the market
Great Britain: Unfortunate comments from Mr. King? !
Euro area: Greece in front of a general strike
Euro area: Publication of GDP unchanged in Germany
Euro area: Publication of the index of consumer confidence in Germany
Japan: Fight against deflation priority for the BoJ

Today:


Rates in Asia and Indices:
EURUSD: 1.3551 - 1.3502.
USDCHF: 1.0843 - 1.0804.
GBPUSD: 1.5464-1.5422.
EURJPY: 122.97-121.72.
USDJPY: 90.30 - 90.09.
DowJones: 10'282 .41 -0.97%
NASDAQ: 2'213 .44 -1.28%
S & P 500: 1'094 .60 -1.21%
Nikkei: -1.48% 10'198 .83
Shanghai: 2'995 .79 +0.44%
Gold: $ 1'106 .25
Crude Oil: $ 77.53
 
Comments:
If anything new should come out of the biannual report to Congress by Mr. Bernanke (Fed’s chief), he should reaffirm that the rise of last week's discount rate was nothing but a technical adjustment. He should also address possible solutions to disengage stimulus measures taken to stem the economic crisis.

At the lowest since April 2009 to 46, the index of U.S. consumer confidence for February disappointed the market awaiting it at 55. The index highlights the fears of US consumers about job’s creations, despite signs of a revival in this sector in the United States.

The testimony of Mr. King (Governor of the Bank of England) before the British parliament yesterday morning sent the GBP to the floor. After his remarks highlighting the current weakness of the British economy and suggesting the possibility of using printing money to stimulate consumption, the English currency against USD has lost more than one cent in less than an hour, before recovering a bit. Attempted devaluation to support exports, or unfortunate remarks, the GBP should remain under pressure.

While a European delegation arrived in Athens to monitor the effectiveness of measures taken by the Greek government, Greece will now face a general strike to protest against these austerity measures. At the same time, the rating agency Fitch lowered the rating of the fourth Greek bank.

Unchanged for the fourth quarter versus the third quarter, German GDP shows that after being out of the recession in the third quarter, the first European economy is stagnating. The index of German consumer confidence for February, although better than expected at 3.2, stresses consumer fears of seeing their incomes decline as well as a decrease in purchase intentions of consumer goods.

Through the voice of his boss, Mr. Yamaguchi, the BOJ (Bank of Japan) indicated this morning that she was ready to act to continue its fight against deflation, thus leaving the way open for future rate cuts.

Good day

Pascal Bovay

RTFX Ltd