MORNING BRIEFING: Markets regain some risk appetite

[RTFX-Trading]

MORNING BRIEFING: Markets regain some risk appetite

[B][I][U]What’s new:[/U] [/I][/B]
Forex: US Dollar and Yen Edge back in early trading.
Asia: Major equity indices rebound.
Euro zone: Bundesbank President warns that Greece might need up to €80B in aid.
Canada: Interest rate decision due today.
United States: Quite a number Company earnings reports expected today.
United States: US near decision on China Currency Probe.
Japan: BOJ and Government at odds on inflation targeting.

[B][I][U]Today: [/U][/I][/B]
[IMG]http://www.rtfx.com/images/news/CAL200410.gif[/IMG]

[B][I][U]Overnight Rates and Indices: [/U][/I][/B]
EURUSD: 1.3501 – 1.3449.
USDCHF: 1.0660 – 1.0623.
GBPUSD: 1.5367 – 1.5290.
EURJPY: 125.13 – 124.49.
USDJPY: 92.79 – 92.39.
DowJones: 11’092.05 +0.67%
NASDAQ: 2’480 -0.05%
S&P 500: 1’197 +0.45%
Nikkei: 10’900 -0.07%.
Shanghai: 2’979 -0.03%,
Gold: $1’139.90
Crude Oil: $82.19

[B][I][U]Comments: [/U][/I][/B]

The US Dollar and the Japanese Yen edged back in early trading Tuesday. Traders said appetite for riskier assets was supported by some good earnings report from the United States. The dollar index was down 0.1% pulling back from a high of 81.28, which it had gained Monday after the Goldman episode.

Major equity indices in Asia (with the exception of Shanghai) rebounded, helped by the fact US regulators were split on suing Goldman Sachs Group, but also because the US leading indicator was better than expected.

The Euro stumbled overnight, as Bundesbank President Axel Weber warned overnight that Greece might need up to €80bln rather than the initial €45bln. Coming up is another auction for €1.5bln worth of 3-month Treasury bills – whatever the outcome it’s hard to see Euro benefitting.

Today the interest rate decision from the Bank of Canada is scheduled, a change is not really expected, and however markets will be looking for any language shifts in the accompanying statement that could potentially benefit the Canadian Dollar.

Markets keep switching from high to low risk aversion, depending on the prevailing news. Today quite a number of earnings reports are expected in the US, together with CPI data from the UK and the ZEW survey and sentiment Index from Germany. Flight travel in Europe might be normalizing, finally allowing IMF, ECB and EU to travel to Athens.

Good Day,

Rudolf Muscat
Trading Desk
RTFX Ltd
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