MORNING BRIEFING: Return to caution?

[RTFX-Trading]

MORNING BRIEFING: Return to caution?
    
What’s new:
United Kingdom: Banking institutions in the City cast doubt on bank tests
United Kingdom: British Chamber of Commerce expects growth of between 0.6-0.7 percent
Euro zone: Confidence first according to Olli Rehn
Greece: Reduction of budget deficit by 42% this year
China: Expanding its purchasing of Japanese Government Bonds.
Australia: Interest rates unchanged

Today:


Overnight Rates & Indices:
EURUSD: 1.2579 - 1.2480.
USDCHF: 1.0667- 1.0598.
GBPUSD: 1.5159 - 1.5082.
EURJPY: 110.46 – 109.15.
USDJPY: 87.77 – 87.41.
DowJones: Closed
NASDAQ: Closed
S & P 500: Closed
Nikkei: 9'332.55 +0.71%
Shanghai: 2'405.53 +1.75%
Gold: $ 1'208.25
Crude Oil: $ 71.44

Comment:

While many banking institutions in the City cast doubt on the tests being done on the soundness of banks in Europe, in an interview with the Telegraph Mr. Cailloux, chief economist at the Royal Bank of Scotland warned of risks of failure by the measures taken by the ECB.

The British Chamber of Commerce expects growth of between 0.6-0.7 percent for the second quarter of 2010.

The Economic Affairs Commissioner Olli Rehn said that if problems encountered by a member of the Union when tested on banks, it could turn to financing facilities established by the European Commission. He also noticed that the tests have proceeded in a vaster way than what was forecasted, the return of market confidence in the banking system in Europe is essential.

Directly from the Finance Minister, Mr. Papaconstantinou’s lips, Greece said it had reduced its deficit by 42% this year; the latter having returned to 4.9% of GDP during the first 6 months of 2010.
Since the beginning of the year China has invested heavily in bonds from the Japanese government, suggesting that following the European fiscal crisis the Chinese government has decided to diversify its reserves into Yen.

As widely expected by the markets, the RBA (Royal Bank of Australia) has left rates unchanged. The publication of the index of consumer prices for the second quarter, expected July 28 will be a good indicator for the policy of the RBA.

Good Day,

Pascal Bovay
Trading Desk
RTFX Ltd
Risk Disclaimer