MORNING BRIEFING: How to verify the strength of European banks?!

[RTFX-Trading]

MORNING BRIEFING: How to verify the strength of European banks?!
    
What’s new:
United States: Effects of the crisis still present according to Geithner
Spain: Successful issue of 6 billion Euros of 10-Year bonds 
Euro zone: Disclosure of method for testing banks
France: Return of black funds
China: New record IPO
Japan: Uncertainty in elections to cause volatility in Yen?

Today:


Overnight Rates & Indices:
EURUSD: 1.2634 - 1.2576.
USDCHF: 1.0636- 1.0585.
GBPUSD: 1.5160 - 1.5113.
EURJPY: 110.69 – 109.88.
USDJPY: 87.67 – 87.36.
DowJones:  9'743.62 +0.59%
NASDAQ:  2'093.88 +0.10%
S & P 500: 1'028.06 +0.54%
Nikkei: 9'243.71 -1.01%
Shanghai: 2'401.56 -0.33%
Gold: $ 1'188.95
Crude Oil: $ 71.49

Comment:

US Treasury Secretary Tim Geithner acknowledged in an interview that the recovery was slowing even though he still felt confident in it.

Spain sold 6 billion Euros of 10-year bonds on Tuesday. The issue was highly subscribed to as investors were drawn to its 4.85% coupon, as the Spanish financial system passed a key test of its ability to raise longer-dated debt in a wary market.

The European Committee of the Banking Controllers should make public (publish) today the benchmarks used to test the strength of over a hundred banks in the Eurozone and the rest of Europe. The tests have been distributed yesterday and should be made by the 15th July. The market's confidence in the EU banking system could suffer from an inspection too light (weak) and / or not sufficiently extended to the banking institutions, and thus reduce the volatility of the euro.

New allegations of cash rebates for French politicians to fund their political campaigns, that French law prohibits, could embarrass the president Sarkozy and force it to reshuffle the government.
A new record has been set in China with the largest initial public offering (IPO) by the Agricultural Bank of China, an estimated 22 billion Dollars.

The elections set for Sunday in Japan seem to leave some uncertainty over the majority in the upper house of the Prime Minister, which could make the implementation of its austerity policy more difficult and bring back certain distrust in the JPY.

Good Day,

Pascal Bovay
Trading Desk
RTFX Ltd
Risk Disclaimer