MORNING BRIEFING: Goldman Sachs’ charge for Fraud shatters markets

[RTFX-Trading]

MORNING BRIEFING:  Goldman Sachs’ charge for Fraud shatters markets

What’s new:
Japan: Consumer confidence improves in March.
China: Yuan appreciation expectations are rising, says SAFE.
United States: Goldman Sachs charged with fraud.
Europe: Air travel laid back due to volcano ash for fifth day.
US Dollar: Benefits once again as markets shift to risk aversion.

Today:


Rates in Asia and Indices:
EURUSD: 1.3498 - 1.3437.
USDCHF: 1.0665 - 1.0615.
GBPUSD: 1.5316 - 1.5211.
EURJPY: 124.34 - 123.16.
USDJPY: 92.21 - 91.59.
DowJones: 11’018.66  -1.13%  
NASDAQ: 2'481 .26  -1.37%  
S & P 500: 1'192 .13 -1.61% 
Nikkei: 10'908 .77 -1.74% 
Shanghai: 2'980.06 -4.8% 
Gold: $ 1'134 .80
Crude Oil: $ 81.67

Comments:

Goldman Sachs’ charge for fraud has once again depleted markets’ appetite for risk; this could be seen as stock markets plunged in Asia. Goldman Sachs is being sued for allegedly being one of the companies that initiated the financial crisis as it made earnings in relation to Collateralized debt obligations (CDOs).  The problem is still growing as Germany and Britain have sought details of the charge from the Securities Exchange Commission (SEC. In the Forex markets this has translated in gains for the US Dollar and Japanese Yen as they are viewed as safety-linked currencies.

The US Dollar had been going higher even prior to the Goldman news, as Greece was seen preparing to resort to the aid package from the European Union and International Monetary Fund. Reuters reports that he Japanese Yen was at one month highs against the US dollar early Monday trading as risk appetite suffered.

Reuters reports that the European Union has summoned ministers for talks as pressure builds for a solution to the 5-day-old air travel crisis.

Euro and Sterling have seen a decline against the US dollar, as the latter strengthened due to increasing risk aversion in Asian trade earlier on today. Today the economic calendar is not very busy and will probably leave risk sentiment to dominate over Forex markets, translating into more demand for US Dollar and Japanese Yen.

Meanwhile the EURGBP is set to continue its bearish trend, although given market sentiment and lack of market-moving data until later on this week will probably translate in plenty of sideways movement.

Best wishes for the coming week,

Rudolf Muscat
Trading desk
RTFX Ltd
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