MORNING BRIEFING: Thursday’s meeting of the ECB and BOE keep Markets on toes

[RTFX-Trading]

MORNING BRIEFING: Thursday’s meeting of the ECB and BOE keep Markets on toes

What’s new :
United States: Conflicting views within the Fed
United States: Possible investigation of Hedge Funds
Great Britain: Index of consumer confidence at its highest since a year
Great Britain: Technical correction of the GBP
Greece: Expecting Greek’s measures
Euro Area: Spain returns to the front of the stage
Canada: Rate unchanged

Today:


Rates in Asia and Indices:
EURUSD: 1.3654 - 1.3609.
USDCHF: 1.0755 - 1.0719.
GBPUSD: 1.5076 - 1.4959.
EURJPY: 121.22 - 120.61.
USDJPY: 88.87 - 88.47.
DowJones: 10'405.98 +0.02%
Nasdaq: 2'280.79 +0.32%  
S & P 500: 1'118.31 +0.23%
Nikkei: 10'253.14 +0.31%
Shanghai: 3'082.38 +0.30%
Gold: $ 1'133.35
Crude Oil: $ 77.99
 
Comments:
Within the Board of the Fed views on the possibility of rising interest rates diverge, opening the door to new speculation on the date when a rise of the Fed Funds rate will occur.

The Department of Justice of the United States have called on major US Hedge Funds to keep records of their foreign exchange transactions, wishing to control the possibility of a coordinated attack against the European currency and thus a form of monopoly.

Published early this morning in Great Britain, the index of consumer confidence for February at 80 has reached its highest since one year. The markets, after the sale off of the GBP on Monday (the Pounds loosing 1.2% against USD) saw profit-taking this morning in Asia after judging exaggerated the movement, causing a correction of the GBP.

With the ministerial meeting in Athens today, the markets expect drastic measures from the Greek state, with talk of about Euro 4.8 billion reduction in spending.

But concerns remain for the EUR, with debt of Spain coming back to the markets. The Spanish economy, bigger than Greece, Portugal and Ireland combined, is facing a real estate crisis unprecedented in Europe, with over 1.3 million unsold items and a high budget deficit. Bears on the EUR still have good days ahead!

The Bank of Canada kept interest rates unchanged yesterday, despite a stronger than expected growth for 2009 which may generate inflationary risks. However, the BoC suggested that a rate hike could occur in the third quarter of this year.

Yet, with tomorrow's meeting of European central banks and British markets should be cautious today.

Good day

Pascal Bovay

RTFX Ltd
Trading desk
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