MORNING BRIEFING: BoE & ECB leave rates unchanged; South Korea raises rates by 0.25%

[RTFX-Trading]

MORNING BRIEFING: BoE & ECB leave rates unchanged; South Korea raises rates by 0.25%
    
What’s new:
United States: Released report on China
United Kingdom: BoE leaves rates unchanged
United Kingdom: IMF revises UK growth forecast down
BP: Potential sale of assets of up to $45 billion
Euro area: Bank tests estimated potential loss
Euro zone: ECB leaves rates unchanged
Switzerland: Tests carried out regularly by FINMA and the SNB
South Korea: The central bank raises its rates

Today:


Overnight Rates & Indices:
EURUSD: 1.2703 - 1.2674.
USDCHF: 1.0525- 1.0489.
GBPUSD: 1.5170 - 1.5131.
EURJPY: 112.56 – 112.14.
USDJPY: 88.70 – 88.32.
DowJones:  10'138.99 +1.20%
NASDAQ:  2'175.40 +0.74%
S & P 500: 1'070.25 +0.94%
Nikkei: 9'586.70 +0.53%
Shanghai: 2'449.02 +1.40%
Gold: $ 1'196.50
Crude Oil: $ 75.04

Comment:

Scheduled for April 15, the awaited biannual report from the US Treasury did not ultimately label China as a manipulator of its currency, the Yuan, thus removing the possibility of economic sanctions.
 
As expected, the Royal Bank of England, at its monthly meeting, left its base rate at record low of 0.5%.

The Great Britain has again been "left standing" in the IMF’s forecasts published yesterday showing a favorable revision of global growth; the IMF has revised down slightly its forecast for 2010 for the United Kingdom, whereas for 2011 IMF also cut its forecast from 2.5% to 2.1%.

BP has the intention to sell part of its assets, an estimated value over $ 45 billion to cover damage that the company will repay after the disaster of the Gulf of Mexico.

In its tests on 91 banks, which will analyze the potential loss bearable by these institutions, the supervisory committee provides two scenarios. 1. without particular deterioration of macroeconomic conditions and 2. Negative, with 3 points less for growth, Sovereign shock and distrust towards some countries of the European Union, as already noted earlier in May of this year.

As noted by Mr. Trichet in his press conference after the ECB monthly meeting, the ECB must wait for the results of these tests, scheduled for July 23 to assess the situation. From the same meeting, the ECB confirmed its base rate at 1%.

FINMA (supervisory authority of financial markets in Switzerland) noted that, in conjunction with the SNB (Swiss National Bank), already conducted regular tests at UBS and Credit Suisse to analyze their potential loss.

Surprise for the markets this morning, with the Central Bank of South Korea, raising its rates by a quarter base point from a record low of 2.0% to 2.25%, also highlighting a strong growth and risk of rising inflation.

Good Weekend,

Pascal Bovay
Trading Desk
RTFX Ltd
Risk Disclaimer