Hectic day ahead; BoE at 13h00, ECB at 13h45 and 14h30, and Stress test at 23h00

[RTFX-Trading]

Hectic day ahead; BoE at 13h00, ECB at 13h45 and  14h30, and Stress test at 23h00

What’s new?
United States: 491'000 job lost in private sector (ADP) in April.
Central Bank of China sees risks of depreciation for major currencies, including the dollar.
UK: Halifax house prices in April -1.70%.
Euro zone: PMI services index 43.8 in April.
Switzerland: SNB will fight against the appreciation of the franc and deflation.

Today:
08h45 France: Trade Balance (MAR), exp -3.9 Bln, previous -4.105 Bln.
09h15 Switzerland: Consumer Prices index (APR), exp 0.60%, previous -0.30%.
12h00 Germany: Industrial Orders (MAR), exp -0.60%, previous -3.50%.
13h00 UK: Monetary Policy decision, expected unchanged at 0.50%.
13h45 Euro zone: Monetary Policy decision, expected to be lowered by 0.25% to 1.00%.
14h30 Euro zone: Press conference by ECB President Jean-Claude Trichet.
14h30 US: Initial Jobless claims, exp 635'000, previous 631'000.
14h30 US: Q1 Productivity, exp 0.60%, previous -0.40%.
14h30 US: Q1 Unit Labour costs, exp 2.80%, previous 5.70%.
15h30 US: Speech by FED President, Ben Bernanke.

Overnight Rates & Indices:
EURUSD: 1.3338 – 1.3276.
USDCHF: 1.1361 – 1.1311.
GBPUSD: 1.5156 – 1.5098.
EURJPY: 131.56 – 130.72.
USDJPY: 98.84 – 98.28
DowJones: 8'512 +1.21%.
NASDAQ: 1’424 +0.01%.
S&P 500: 920 +1.74%.
Nikkei: 9’332 +3.95%.
Gold: $912.40.

Comments:

Yesterday, the Dollar lost ground against major global currencies, as easing unemployment figures sparked renewed optimism among investors. Job losses in the private sector were much lower than expected. Statements from the Bank of China, were also in line with a weaker dollar in the medium term. We have also noticed, in the last few days a return of certain market participants, who are again ready to take risks. The news this afternoon should get them to position over the medium term, which should lead to movements of funds for the coming weeks. From the RTFX-Trend, it seems a bearish trend in the dollar has settled, which could be confirmed from statements and news further in the day.

At 13.00 CET, the Bank of England should announce a status quo of its base rate at 0.50% and at 13.45 CET, the European Central Bank should lower its interest rates by 25 basis points to bring them to 1.00%. At 14:30 CET, the ECB president Jean-Claude Trichet, will deliver his traditional speech. The ECB is expected to announce several non-conventional measures, essentially an extension of "Repo" and an expansion of eligible collateral. Any different news or declaration from the above could lead to significant volatility of the euro.

“Stress test” results are to be released tonight at 23:00 CET

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

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