MORNING BRIEFING: Doubts still present on the European Measures

[RTFX-Trading]

MORNING BRIEFING: Doubts still present on the European Measures
    
What’s new :
United States: Fear of depression rejected by Mr. Summers.
IMF: Is the SDR the solution to the crisis of the Euro?
Spain: Austerity plan approved.
Japan: CPI falls.
Japan: The G20 should address the problems of over-indebtedness in Europe.
South Korea: No intention to reduce its holdings in Euro.

Today:


Overnight Rates and Indices:
EURUSD: 1.2381 - 1.2281.
USDCHF: 1.1573 - 1.1496.
GBPUSD: 1.4591 - 1.4522.
EURJPY: 112.73 – 111.91.
USDJPY: 91.36 – 90.85.
DowJones: 10’258.99 +2.85%
NASDAQ: 2'277.68 +3.73%
S & P 500: 1'103.06 +3.29%
Nikkei: 9'722.63 +0.86%
Shanghai 2'664.09 +0.31%
Gold: $ 1'210.85
Crude Oil: $ 74.48

Comments:

After the Chinese denied it withdrew from the Euro and the rebound of the Euro on Thursday due to cover short positions, the EURUSD fell in Asian trading earlier today with the nagging doubts about the effectiveness of measures taken by the countries of the Euro zone. The end of the month and the US markets being closed Monday for Memorial Day 31 should encourage markets to a degree of caution.

The US economy has a long way to go, but no longer dominated by the fear of a depression said economic adviser to the White House Mr. Summers.

An official with the International Monetary Fund has suggested that the use of SDR (currency reserve fund of IMF consisting of a basket of currencies) could be a solution to alleviate the crisis in the Euro, even suggesting adding to this basket the Chinese Yuan and the Brazilian Real.

The Spanish parliament approved the government’s austerity plan by just with one vote ... The difference between "yes we approve" and "no we don’t" was only one.  The plan is expected to save 15 billion Euros over expenditures, but this leaves little room for doubts about the ability of Government to master the financial crisis.

Out this morning in Japan, the index of consumer prices remains down for the 14th consecutive month, but according to the Bank of Japan, the decline is in line with its expectation that inflation will restart in the fiscal year March 2011-March 2012.

Japanese Finance Minister, Mr. Kan, expressed Japan's desire to see the problems of budget deficits in Europe and their influence on currency markets discussed at the next preparatory meeting of the G20 to be held on 4th and 5th June in Busan (South Korea).

South Korea, which Central Bank has the sixth largest reserve currency in the world, has also assured not to detract from its reserves in Euros.

Good Week end,

Pascal Bovay
Trading Desk
RTFX Ltd
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