MORNING BRIEFING: ECB auction fails to ease credit concerns

[RTFX-Trading]

MORNING BRIEFING: ECB auction fails to ease credit concerns
    
What’s new?
Forex: Euro falls to record low versus Swiss franc
China: China’s growth slowing down
Euro zone: ECB auction fails to ease credit concerns
United States: Obama pressing China on currency for fair trade
Moody’s: Spain’s Aaa sovereign debt rating may be cut

Today:


Overnight Rates and Indices:
EURUSD: 1.2243 – 1.2193
USDCHF: 1.0790 – 1.0710.
GBPUSD: 1.4975 – 1.4873.
EURJPY: 108.34 – 107.51
USDJPY: 88.56 – 88.09.
DowJones: 9’774.02 -0985%
NASDAQ: 2'109.24 -1.21%
S & P 500: 1'030.71 -1.01%
Nikkei: 9’191.60 -2.04%
Shanghai 2'373.79 -1.02%
Gold: $ 1’241.10
Crude Oil: $ 74.72

Comment:

The Euro fell to an all time low against the Swiss franc on Thursday, as weaker-than-expected Chinese data contributed to add doubts about the strength of the global recovery, while concerns over bank’s funding conditions in Europe remain.

The Euro fell as low as 1.3073 against the Swiss franc early on Thursday, as investors returned to safe have currencies and while against the USD it dropped to 1.2193 after Wednesday’s surge following the ECB’s auction.

On Wednesday, Euro zone banks borrowed less money than expected from the European Central Bank. The ECB said 171 banks borrowed 131.9 billion Euros over three months, which was below expectations of 210 billion Euros. The amount is still the highest ever borrowed in a three-month operation but pales beside the 442 billion Euros of one-year money which banks must repay to the ECB on Thursday.

Spanish, Portuguese and Greek banks have been the biggest users of the facilities. However, gains for the Euro were short lived as Moody's Investors Service said it may cut Spain's Aaa sovereign debt ratings on deteriorating economic growth prospects.

Higher-yielding currencies also took a hit when the S&P-500 index failed to close above the technically important 1040 level, which it held since February, causing further risk aversion. The Aussie closed down to 0.8406 yesterday versus the US Dollar, and the Kiwi dropped to 0.6846. Against the Yen, the Australian Dollar closed at 74.33, while continued its decline on Thursday to 73.68, down 0.88% on the day.

Good day

Emman Xuereb
Trading Desk
RTFX Ltd
Risk Disclaimer