MORNING BRIEFING: Uncertainty dominates markets

[RTFX-Trading]

MORNING BRIEFING:  Uncertainty dominates markets

What’s new:
Euro Zone: Trichet fails to reassure markets
Greece: Austerity plan backed by parliament
US Dollar: Enjoys support from global uncertainties
United Kingdom: Elections results start to point to a no clear resolution
China: A Government think-tank says China should widen Yuan’s band

Today:


Rates in Asia and Indices:
EURUSD: 1.2736 - 1.2586.
USDCHF: 1.1177 - 1.1111.
GBPUSD: 1.4935 - 1.4597.
EURJPY: 117.91 – 113.64.
USDJPY: 92.78 – 90.01.
DowJones: 10’520.32 -3.20%
NASDAQ: 2'319.64 -3.44%
S & P 500: 1'128.15 -3.24%
Nikkei: 10’363.59 -3.10%  
Shanghai 2’715.30 -0.89%  
Gold: $ 1'200.00
Crude Oil: $ 80.04
 
Comments:

British Pound lost plenty of ground in Asian trading earlier on this morning. While it seems clear that most of the votes go for David Cameron’s Conservatives, no clear outcome is being expected and that coalitions will have to be attempted. This is likely to weigh on the British Pound and it will most probably underperform until we see a tangible resolution. Some traders are even contemplating a worst case scenario where political uncertainty would delay plans to re-align public finances and in turn lead to credit agencies down grading UK’s AAA status.

US dollar and Yen enjoyed plenty of support, as around the globe appetite for risk was shattered on the back of dismal performance in US stock markets yesterday, which spilled over to Asian trading this morning. Gold as well registered gains in price.

 ECB President Trichet failed to offer any solutions for the contagion risks (contagion not only to euro zone member states but also to global markets) in yesterday’s news conference and markets are still trying to understand what happened yesterday during the US session, in what seems to be a trading glitch.

Today a German vote is expected on Greek bailout, and UK election results throughout the day. In the United States Nonfarm payrolls & unemployment rate expected in the afternoon.

Good day,



Rudolf Muscat

Trading desk

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