MORNING BRIEFING: Discipline, reductions, efficiency, capacity, new motto for Europe?

[RTFX-Trading]

MORNING BRIEFING: Discipline, reductions, efficiency, capacity, new motto for Europe?

What’s new :
China-USA: Beginning of two days of talks in Beijing
Britain: Reducing government spending announced
Euro area: First meeting of new European taskforce
Spain: rescue by the state of the bank CajaSur
Italy: Vote to reduce budget spending before the parliament tomorrow?

Today:


Rates in Asia and Indices:
EURUSD: 1.2563 - 1.2481.
USDCHF: 1.1545 - 1.1491.
GBPUSD: 1.4498 - 1.4414.
EURJPY: 113.29 - 112.07.
USDJPY: 90.36 - 89.74.
DowJones: 10'193 .39 +1.25%
Nasdaq: +1.14% 2'229 .04
S & P 500: +1.50% 1'087 .69
Nikkei: -0.19% 9'765 .74
Shanghai +3.14% 2'664 .65
Gold: $ 1'187 .35
Crude Oil: $ 71.93

Comments:
At the opening of the superpower second meeting for strategic and economic dialogue, Chinese President Hu promised to encourage domestic growth, avoiding however to address the issue of revaluation of Yuan, the United States on their side were careful to approach the problem head on.

Also at Beijing, Treasury Secretary T. Geithner said the world economy has improved faster than expected.

Further cuts in the budget, expected to be around GBP 6.2 billion, have supported the pound this morning, sterling rebounded 50 points against the USD.

Following the first meeting of the new European governmental task force, Mr. Van Rompuy revealed the task force’s new strategy will aim for greater budgetary discipline for member states, to find means to reduce the differences in competitiveness between them, to establish an effective economic crisis management mechanism, and to strengthen economic governance to be able to act quicker and in a more co-ordinated and effective way during any future economic crisis. The Euro rebounded Friday after the meeting, until risk aversion bounced back Monday morning were the euro lost again over 100 points from the opening in Europe, in addition rumors of sales by hedges funds placed increased pressure on the EUR.

The announcement by the Bank of Spain taking control of the bank CajaSur, after failure to merge with a competitor, has also weighed on the euro, the economic problems of Spain are back on the front stage.

The Italian deputies should vote for their side already tomorrow for new measures to reduce budgeted expenditures.

Have a good day

Pascal Bovay

RTFX Ltd
Trading desk
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