MORNING BRIEFING: Risk Appetite returns as the Euro back to above 1.4000 against the Dollar.

What’s new?
Japan: Bank of Japan leaves rates unchanged.
United States: Goldman Sachs results show an increase of 33%, thanks to its trading department.
United States: Further decline in company stocks during May.
United States: Producer prices increase by 1.8% in June.
United States: Retail sales up 0.6% in June.
Germany: Investor sentiment falls in July.
Euro Zone: Industrial production rebounds in May.

10h30 United Kingdom: Unemployment rate May, exp 7.40%, previous 7.20%.
11h00 Euro zone: HICP final M/M June, exp 0.20%, previous 0.10%.
11h00 Euro zone: HICP final Y/Y June, exp -0.10%, previous 0.00%.
14h30 United States: CPI M/M June, exp 0.50%, previous 0.10%,
14h30 United States: CPI ex Food and Energy June, exp 0.20%, previous 0.10%.
14h30 United States: Real Earnings June, exp -0.50%, previous -0.30%.
15h15 United States: Industrial Production June, exp -0.60%, previous -1.10%.
15h15 United States: Capacity Utilization June, exp 67.90%, previous 68.30%.

Overnight Rates and Indices:
EURUSD: 1.4012 – 1.3963.
USDCHF: 1.0893 – 1.0839.
GBPUSD: 1.6380 – 1.6302.
EURJPY: 131.17 – 130.46.
USDJPY: 93.66 – 93.40.
DowJones: 8'359 +0.33%.
NASDAQ: 1’799 +0.36%.
S&P 500: 905 +0.53%.
Nikkei: 9’271 +0.10%.
Gold: $926.05 +0.16%.
Crude Oil: $60.32.

Yesterday after taking advantage of better than expected producer prices and retail sales, the Dollar fell this morning to 1.4040 against the single currency. The "carry trades" are sharply higher this morning. The renewed appetite for risk can be attributed to the strong results published by Goldman Sachs which benefited high-yielding currencies or currencies linked to commodities, as the Canadian dollar, which reached a three week peak against the greenback. The statement by the Treasury Secretary, Geithner, who saw a return of confidence in the United States, has also pushed investors to position themselves higher on the Australian Dollar, New Zealand Dollar, Euro and Pound.
The market remains cautious, however, the avalanche of results in the coming days could still give a potential increase in appetite for risk.

Good Day

Emman Xuereb
Head Office
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