MORNING BRIEFING: Publication of tests on banks by July 23rd.

[RTFX-Trading]

MORNING BRIEFING: Publication of tests on banks by July 23rd.
    
What’s new:
United States: Markets Closed
United Kingdom: More like 25% than 40% budget cuts
Euro zone: Publication of tests on banks by July 23rd
Euro zone: No risks of double dip recession says Trichet
Switzerland: Development of CHF monitored closely by SNB
Japan: Manifucturers’ Confidence returns?
China: Borrowing from the Bank of China sufficient for the next 3 years

Today:


Overnight Rates & Indices:
EURUSD: 1.2562 - 1.2521.
USDCHF: 1.0666- 1.0634.
GBPUSD: 1.5202 - 1.5165.
EURJPY: 110.36 – 109.95.
USDJPY: 88.00 – 87.65.
DowJones: 9'686.48 -0.47%
NASDAQ: 2'091.79 -0.46%
S & P 500: 1'022.58 -0.47%
Nikkei: 9'251.44 +0.52%
Shanghai: 2'345.91 -1.55%
Gold: $ 1'213.15
Crude Oil: $ 72.19

Comments:

With US markets being closed, the currency markets should be calm today. The loss of 125,000 jobs in June for the US economy published on Friday confirmed that growth is slowing down, which was already stressed by the weak consumer spending figures published earlier in the week and manufacturing activity. This encouraged investors to covers their short Euro positions on Friday and sell the USD more generally, while at the opening on Europe this morning a return of interest in the CAD, AUD and NZD grew.

According to British Transport Secretary Hammond, the 40% budget cuts sought from various government departments should in fact be closer to 25%, while the opposition expects job losses to be more than one million due to government measures.

The results of tests conducted to check the health of European banks, intended to restore investor confidence in the banking system and expected no later than July 23, should show the strength of European banks, according to French Finance Minister Madam Lagarde.

Ahead of this week’s ECB Monetary Policy meeting, its chairman, Mr. Trichet said he did not believe in a double dip recession in Europe, noting that budget cuts and structural reforms in Europe were essential for increasing the potential of growth in Europe.

In an interview published Sunday, the head of the SNB (Swiss National Bank) Mr. Hildebrand said that it will continue to closely monitor market developments of the Swiss franc, implying possible additional interventions by the SNB to contain the appreciation of the CHF.

The release of the Tankan survey in Japan on Friday seems to demonstrate a return of confidence of large manufacturers, with figures rising for the fifth consecutive quarter.

After borrowing 8 billion Dollars in loans on Friday, an amount that should be achieved by the end of the year, Bank of China (fourth lender in China) announced this morning that it should meet the capital requirements to cover domestic demand for the next three years.

Good Day,
Pascal Bovay
Trading Desk
RTFX Ltd
Risk Disclaimer