MORNING BRIEFING: Strong rebound of the Euro

[RTFX-Trading]

MORNING BRIEFING: Strong rebound of the Euro

What’s new :
United States: Wholesale inventories Rising higher than expected
Great Britain: Polls favor the Tories
Euro area: Aid, finally!
Euro area: loans at favorable rates
IMF: Additional loans for Greece
Greece: sovereign debt rating lowered by Fitch
Greece: The country should not need external aid
Switzerland: UBS posts excellent profit in the first quarter 2010
China: Balance of trade deficit in March
Precious metals: Gold at its highest in 4 months

Today:


Rates in Asia and Indices:
EURUSD: 1.3692 - 1.3609.
USDCHF: 1.0603 - 1.0551.
GBPUSD: 1.5485 - 1.5405.
EURJPY: 127.45 - 126.64.
USDJPY: 93.31 - 92.98.
DowJones: 10'997 .35 +0.64%
NASDAQ: +0.71% 2'454 .05
S & P 500: +0.67% 1'194 .37
Nikkei: 11'300 .73 +0.86%
Shanghai -0.68% 3'123 .90
Gold: $ 1'165 .40
Crude Oil: $ 85.42

Comments:
February wholesale inventory statistics published last Friday were higher than expected, and markets interpreted this as a positive sign for growth and corporate earnings for the first quarter of 2010.

The pre-election poll released in the UK press this weekend, showing a possible landslide victory for the Tories, has come as a support for sterling at the start of the week.

The decision of the 16 euro zone countries, unveiled by the finance ministers on Sunday, to provide Greece with up to 30 billion euro to refinance its debt if required, has made a strong support for the European currency which bounced from 1.3494 to 1.3624 against the USD.

The European Commissioner for Economic Affairs, Olli Rehn, indicated that the rate for this loan is expected to be approximately 5%, which is well below market rates.
The IMF (International Monetary Fund) is also providing for a 15 billion loan for Greece if required.

The ratings firm Fitch lowered its rating Friday on Greece's sovereign debt from BBB + to BBB-, while for the time being Standard & Poors (BBB +) and Moody's (A2) did not announce a change in their rating.

The Greek finance minister, on the other hand, announced that Greece would not need to use this aid.

UBS has published an estimated profit of CHF 2.5 billion or approximately USD 2.3 bn before tax for the first quarter of 2010, prior to its general assembly next Wednesday. This has surprised the markets, and showed that the Swiss bank seems to be getting out of its predicament.

For the first time in 6 years China has recorded a trade deficit for March, which according to Chinese officials is due to the high rising cost of raw materials, for which China is a major consumer. The Chinese Vice-Minister of Commerce from his part said that rising Yuan would be bad for the chinese economy.

Driven by market concerns and the decline of the USD, gold reached its highest since December, to 1169.70.

Have a good day,

Pascal Bovay

RTFX Ltd
Trading desk
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