MORNING BRIEFING: No surprises on Bernanke’s side!

[RTFX-Trading]

MORNING BRIEFING: No surprises on Bernanke’s side!

What’s new:
United States: Low interest rate and high unemployment, Ben’s recipe...!!
United States: New home Sales down
Euro zone: Risk of recession again?
Euro zone: The Euro in a difficult position, dixit Mrs. Merkel
Euro zone: Standard & Poor's could lower the Greek notes.
France: Unemployment rate up in January
Japan: Repatriation of profits of Japanese companies

Today:

Rates in Asia and Indices:
EURUSD: 1.3548 - 1.3451.
USDCHF: 1.0878 - 1.0803.
GBPUSD: 1.5421-1.5325.
EURJPY: 122.29-120.45.
USDJPY: 90.32 - 89.47.
DowJones: 10'374 .16 +0.89%
NASDAQ: +1.01% 2'235 .9
S & P 500: 1'105 .24 +0.97%
Nikkei: -0.95% 10'101 .96
Shanghai: 3'059 .92 +1.25%
Gold: $ 1'092 .15
Crude Oil: $ 77.84
 
Comments:

As expected, Mr. Bernanke's testimony before Congress brought nothing new: interest rates need to remain at historically low levels to support a faltering recovery while unemployment will remain high for a prolonged period.

Despite low mortgage rates, publication of statistics new home sales in January showed an unexpected decline yesterday, confirming if necessary the slow rate of the recovery in the United States.

In Europe, after a third quarter 2009 showing signs of recovery, followed by a fourth showing stagnation, the risks of the Euro zone and Britain are again on a recession side, risks also underlined by weak EUR and GBP.

German Chancellor Angela Merkel said on her part that the Euro is in a difficult position, however, she reiterated her confidence in the Euro and the capacity of Greece to overcome its problems of budget deficits.

On the Greek side, the pessimism of the markets should not decrease, as Standard & Poor's is considering lowering the rating of Greek loans.

In France, after remaining stable in December, the unemployment rate for January is again on the rise with an increase 0.7% of job seekers.

So on all these "good news", the market chooses the least harmful and carry on buying USD, which still enjoys its status of a safe haven. For its part the JPY remains strong, with the repatriation of profits of Japanese companies by the end of the fiscal year, creating "seasonal” demand.

Good day
Pascal Bovay
RTFX Ltd
Trading desk
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