Swine flu: The world is concerned about a possible global pandemic, the "carry” trades are suffering.

[RTFX-Trading]

   
Swine flu: The world is concerned about a possible global pandemic, the "carry” trades are suffering.

What’s new:
Wall Street Journal: Stress test report indicates that Citigroup and BoA may need to raise additional capital.
Swine flu: the world is concerned about a possible global pandemic.
ECB Nowotny: ECB is ready to take unconventional measures
Switzerland: The U.S. tax authorities will pursue other banks than UBS
Trichet ECB: lowering rates is not always the panacea.
England: the Government plans to sell Northern Rock.

Today:
08h45 France: Apr Consumer Confidence, exp -43.0, previous -43.0
12h00 UK: Apr CBI Dist Trade, exp -40.0, previous -44.0
15h00 US: Feb Case/Shiller M/M, exp -2.0%, previous -2.8%
16h00 US: Apr Consumer Confidence, exp 29.8, previous 26.0
16h00 US: Apr Richmond Fed Comp, previous -20.0
17h00 Switzerland: BNS president Roth speaks

Overnight Rates & Indices:
EURUSD:  1.3039 – 1.2984.
USDCHF:  1.1585 – 1.1551.
GBPUSD:  1.4646 – 1.4552.
EURCHF: 1.5068 – 1.5037.
USDJPY:  96.78 – 95.98.
DowJones: 8'025 -0.64%.
NASDAQ:  1'370 – 0.24%.
S&P 500: 858 -1.01%.
Nikkei:  8'514 -2.44%.
Crude Oil: $49.17 -1.93%.
Gold: $898.70 -0.89%.

Comment:

According to some sources close to the matter, the Wall Street Journal reported this morning that the U.S. banking giants CitiGroup and Bank of America may need to raise new additional capital (According to the results of resistance testing (Stress Test)).

Yesterday, the "carry trades" suffered massive selling following the concern of a possible global pandemic of swine flu after the alerts in Mexico. The dollar and the yen were the big winners, while the Australian dollar and the euro were the biggest losers.
   
The Euro suffered the largest losses yesterday, due to differing opinions on the future rate policy. Jean-Claude Trichet said last night “Monetary policy is the more effective in response to a downturn, the argument goes, the lower the policy rate. This view is too simplistic. “The action of the ECB is therefore different from other central banks, which disappointed investors.

Good Day

Nicolas Longchamp
RTFX Ltd
Head Office

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