MORNING BRIEFING: Rebound for the EUR

[RTFX-Trading]

MORNING BRIEFING: Rebound for the EUR

What’s new :
United States: Lowered of GDP statistics
United States: Friday, unemployment figures for March
Great Britain: Publication of mortgage statistics this morning
Great Britain: The Labor Party leads the polls
Euro area: Agreement between the European partners on aid for Greece
Euro area: There is nothing to worry about the level of the euro, says Nowotny
Japan: Surprise rise in retail sales
Switzerland: Return of CHF after its historic high against the EUR
Precious Metals: Chinese demand for gold should remain strong

Today:


Rates in Asia and Indices:
EURUSD: 1.3490 - 1.3419.
USDCHF: 1.0691 - 1.0588.
GBPUSD: 1.4965 - 1.4892.
EURJPY: 124.63 - 124.10.
USDJPY: 92.78 - 92.35.
DowJones: 10'850.36 +0.08%
NASDAQ: 2'395 .13 -0.10%  
S & P 500: 1'166 .59 +0.07%
Nikkei: 10'965.20 -0.28%  
Shanghai: 3'122.54 +2.05%
Gold: $ 1'106 .40
Crude Oil: 79.69 USD

Comments:
Despite the downward revision of GDP statistics for the fourth quarter released Friday in the United States, showing an annualized growth rate for 2009 of 5.6% against 5.9% last month, this is the best figures published since the 3rd quarter 2003.

This week will see many statistics, the unemployment figures for March, published in the United States on Friday to 14:30 being the most expected.

In Britain, figures for mortgages approval, good indication of the health of the housing market, will be released this morning at 10:30 ECT.

The release of a poll published in the British press this weekend shows that Labor should retain its majority in the House of Commons after the election of the second quarter, the British public more confident in the current Prime Minister Brown and his Chancellor of the Exchequer Mr Darling that in the leader of the Conservative Party Mr Cameron and his shadow Chancellor of the Exchequer Mr. Osborne. But the prospects for a continuation of current policy associated with the Britain’s economy recovery still in its infancy should continue to weigh on GBP.

The euro rebounded Friday after the announcement of the agreement between the European partners on the supply of aid to Greece. However, it is not sure that the 22 billion Euros that the major European economies are ready to put on the table in case Greece would encounter difficulties in borrowing, reassure markets. The spectra of other economies find themselves in the same position as that of Greece, starting with Portugal, will certainly help to cool down the market confidence.

Mr. Nowotny’s statements (European Central Bank), 'Everybody can live well with this rate’, adding ' ‘the exchange rate to the U.S. dollar has always changed sharply since the euro existed and the current level is still in the upper region’ should not lead to support the European currency.

Published early this morning in Japan, figures for retail sales for February, supported by the stimulus package from the Japanese government, showed an increase of 4.6%, against expectations of 1.8%, with for January an increase of 2.6%, while the Japanese economy suffered its 12th consecutive month of deflation.

After an all time high at 1.4232 against the EUR, CHF declined, following the reflux fears about the EUR. However, with Swiss economic statistics remaining positive, the CHF should continue to stand firm and take advantage of the weakness of the EUR.

His published forecasts by the World Gold Council, which expects to see demand for China's golden double in the next 10 years, should help to consolidate the gold above the level  1'100.-.

Have a good week

Pascal Bovay

RTFX Ltd
Trading desk
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