MORNING BRIEFING: New Prime Minister for Great Britain

[RTFX-Trading]

MORNING BRIEFING: New Prime Minister for Great Britain

What’s new :
United Kingdom: British Pound volatile in an uncertain political environment
United Kingdom: Blow back from the Euro zone
Euro zone: Markets still not reassured
Germany: encouraging economic figures
Asia: Stock markets down
Gold: New Record

Today:


Rates in Asia and Indices:
EURUSD: 1.2668 - 1.2605.
USDCHF: 1.1139 - 1.1102.
GBPUSD: 1.4973 - 1.4860.
EURJPY: 117.66 – 116.57.
USDJPY: 92.93 – 92.45.
DowJones: 10’748.26 -0.34%
NASDAQ: 2'375.31 +0.03%
S & P 500: 1'155.79 -0.34%
Nikkei: 10’358.31 -0.51%
Shanghai 2’622.67 -0.94%  
Gold: $ 1'234.10
Crude Oil: $ 79.98

Comments:
After Mr. Brown resignation and the formation of a new coalition government by Mr Cameron, initially the pound sterling reacted positively, but it should remain very volatile and under pressure as the establishment of a policy against the budget deficit is not clear.

Also keeping pressure on GBP, after the refusal by Great Britain to participate with Europe to its plan to support Greece according to an article in the Daily Telegraph, Great Britain should not expect help from member countries of the euro zone in case of a financial crisis for the pound sterling. European officials predict it is only a matter of time before the turbulence comparable to those that hit the euro reach the pound.

If the amount of combined aid from EU and the IMF has surprised many in the markets, a deeper analysis of the risks still present led quickly the markets to sell again EUR. A break of the 1.2561 area could see a new low for the year of the EURUSD.

With a better than expected quarterly GDP at 0.2%, showing an annualized growth of 1.7%, Germany surprised the markets, exports better than expected offsetting weak domestic consumption.

Concerns about the euro also weighed on the stock markets in Asia, Nikkei and Shanghai both ending down. It seems that the U.S. dollar and gold once again enjoy their status as a safe haven, gold reaching its highest historical 1'235.05.

Have a good day

Pascal Bovay

RTFX Ltd
Trading desk
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