MORNING BRIEFING: UK Growth forecasts are expected lower

[RTFX-Trading]

MORNING BRIEFING: UK Growth forecasts are expected lower
    
What’s new:
United States: Rise in Michigan Consumer Confidence
United Kingdom: Growth forecasts expected lower
Euro zone: Meeting between Merkel and Sarkozy in the afternoon
Euro zone: French and German banks the most exposed
Japan: Business confidence rose for the second quarter

Today:


Overnight Rates and Indices:
EURUSD: 1.2207 - 1.2116.
USDCHF: 1.1490 - 1.1437.
GBPUSD: 1.4615 - 1.4551.
EURJPY: 112.01 – 111.10.
USDJPY: 91.93 – 91.61.
DowJones: 10'211.07 +0.38%
NASDAQ: 2'243.60 +1.12%
S & P 500: 1'091.60 +0.44%
Nikkei: 9'861.82 +1.61%
Shanghai: 2'569.94 +0.29%
Gold: $ 1,230.10
Crude Oil: $ 75.12


Comment:

The Michigan index of consumer confidence for June, released on Friday in the US, is seen on the rise at 75.5% versus an expected 74.8%. This positive data made up for disappointing Retail sales for the month May, which came out at -1.2% (0.2% expected), allowing a positive closing on Wall Street and a rebound in the USD against the Euro, before seeing short covering in Euro push it upwards .

The new office for budget responsibility is expected to revise to 1.5-2.5% the growth forecast for 2011 this morning, consensus is for 3-3.5% growth, which together with forecasts of the Confederation of British Industry (2.5%), could disappoint the hopes of an upcoming rise in rates by the Royal Bank of England.

This afternoon, the meeting in Berlin between Chancellor Merkel and President Sarkozy regarding European economic governance could emphasize the common interests' of both countries. Banks in these two countries are the most involved in lending to the PIGS (Portugal, Irland, Greece, Spain) countries, according to a report of the BIS (Bank for International Settlements, bank clearing of central banks). The German banks are committing up to 465 billion Euros, while their French counterparts 493 billion Euros.

In Japan, the confidence index of major manufacturers for the second quarter of 2010, released this morning showed an increase of 10% against an increase of 4.3% the previous quarter. This increase also accompanies an increase in capital expenditure budgeted until the end of the fiscal year in March 2011.

Good Day,

Pascal Bovay
Trading Desk
RTFX Ltd

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