The "carry trades" and Euro fall, the dollar continued to rise after first rumours of "Stress Test" by BoA started to surface.

[RTFX-Trading]

The "carry trades" and Euro fall, the dollar continued to rise after first rumours of "Stress Test" by BoA started to surface.

What’s new?:
United States: Bank of America needs $34 billion.
United States: the White House expects hundreds of thousands of job losses in April.
United States: Unemployment is expected to peak in early 2010 according to Ben Bernanke.
Swine flu: no community transmission in Europe according to the WHO.

Today:
09h48 France: PMI services (APR), exp 46.2, previous 43.6.
09h53 Germany: PMI services (APR), exp 43.5, previous 42.3
09h58 Euro zone: PMI services (APR), exp 43.1, previous 40.9.
10h00 UK: Halifax House prices M/M, exp -1.00%, previous -1.90%.
10h28 UK: PMI services (APR), exp 46.0, previous 45.5.
11h00 Euro zone: Retail Sales M/M, exp 0.10%, previous -0.60%.
14h15 US: ADP Employment change (APR), exp -650'000, previous -742'000.
14h30 Canada: Building Permits (MAR), exp 2.50%, previous -15.90%.
19h15 Switzerland: Speech by BNS Chairman Roth.

Overnight rates & indices :
EURUSD: 1.3333 – 1.3246.
USDCHF: 1.1386 – 1.1318.
GBPUSD: 1.5091 – 1.4992.
EURJPY: 131.83 – 129.86.
USDJPY: 98.99 – 97.95.
DowJones: 8’411 -0.19%.
NASDAQ: 1’424 -0.29%.
S&P 500: 904 -0.38%.
Nikkei: Closed.
Gold: $903.

Comments:

The "carry trades" are sharply lower this morning, benefiting the dollar after a source familiar with the case claimed that Bank of America would need $34 billion in additional capital. The amount of recapitalization is three times higher than that previously aired by the media. According to a source informed of the outcome, half of the 19 U.S. banks subject to this assessment process would be required to recapitalize by U.S. regulators. The government has spent three months conducting stress tests on the 19 largest U.S. banks to determine their revenue, losses and capital needs, should economic conditions deteriorate even further than many economists expect. Results will be unveiled Thursday by the U.S. Treasury Secretary Timothy Geithner and the chairman of the Federal Reserve Ben Bernanke.

Regarding the speech of Ben Bernanke yesterday afternoon, he said the U.S. economy is on the road to recovery during the year, but the improvement is likely to be slow and the unemployment rate may increase. He stressed that the recovery would probably be gradual and that growth should remain weak for some time.

Today, the ADP report at 14:15 will give us a first indication of the state of the U.S. job sector in April to appear Friday. Tomorrow should be a hot day, with the results of the "stress tests" and the meeting of the ECB's monetary policy.

Good Day.

Emman Xuereb

RTFX Ltd
Head Office

Level 2, Suite 2, The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
Tel:  +356 27 78 01 35
Fax: +356 21 41 24 58
Web: www.rtfx.com

This message and any attachments (the "message") are intended solely for the addressees and are confidential. If you receive this message in error, please delete it and immediately notify the sender. Any use not in accordance with its purpose, any dissemination or disclosure, either whole or partial, is prohibited except with formal approval. The internet cannot guarantee the integrity of this message. RTFX Ltd (and its subsidiaries) shall (will) not therefore be liable for the message if modified. Do not print this message unless it is necessary, consider the environment. RTFX Ltd holds a Category 3 license issued by the Malta Financial Services Authority.