MORNING BRIEFING: Resignation of Japanese Prime Minister

What’s new :
Canada: BOC upward
Eurozone: Unemployment Record
Eurozone: New financial regulations unveiled at 16:30 CET
Eurozone:Level of Euro normal as per Mr. Noyer
Japan: unexpected resignation of Prime Minister
Australia: Moderate growth for the first quarter 2010

Today:


Rates in Asia and Indices:
EURUSD: 1.2263 - 1.2185.
USDCHF: 1.1589 - 1.1541.
GBPUSD: 1.4749 - 1.4630.
EURJPY: 112.50 - 111.00.
USDJPY: 91.78 - 90.89.
DowJones: 10'024 .02 -1.11%
NASDAQ: 2'222 .33 -1.54%
S & P 500: -1.72% 1'070 .71
Nikkei: -1.43% 9'573 .11
Shanghai -1.75% 2'523 .46
Gold: $ 1,224 .75
Crude Oil: $ 72.24

Comments:
First G7 Nation in action, as expected Canada raised yesterday its key interest rate from 0.25% to 0.50%. Stressing the exceptional growth of the Canadian economy over the last 2 quarters, the Bank of Canada noted that with an uneven global recovery, any additional rise in rates would be difficult to predict.

Published yesterday, the unemployment figures for the euro zone have shown no improvement, reaching a record 15.86 million unemployed in the 16 European countries, and an unemployment rate of 10.1%.

Mr Barroso and Mr Barnier should unveil this afternoon, at 4:30 p.m. CET the new financial regulations set by the European Commission.

With a price close to its 10 years average against the USD, Euro currency remains strong, according to Mr. Noyer, a member of the Board of the ECB and patron of the Bank of France. He added that steps had been taken, but it would take time to restore market confidence in the Euro.

After the surprise resignation of Japanese Prime Minister Hatoyama this morning, the yen fell sharply in fear of a return to political instability in Japan. The current Minister of Finance Mr. Kan will be in all probability his replacement, which could dissuade the markets to push the yen higher, Mr. Kan having in the past often shown a preference for a weak yen.

Australia's GDP for the first quarter of 2010, released at 0.5% after a strong fourth quarter 2009 at 1.1%, showed that growth of the Australian economy, although at a slower pace, continues. The strong demand for minerals remains strong, with firm prices, and the government's planned spending in 2010 should continue to support growth, but no further rate hike should happened this year. However, the AUD as well as the NZD went higher after the resignation of Japanese Prime Minister.

Have a good day

Pascal Bovay

RTFX Ltd
Trading desk
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