MORNING BRIEFING: Greek austerity Budget policy fatal to its economy ?

What’s new :

United States: Obama, US needs to control the budget deficit
Great Britain: The minutes of the MPC appears to confirm the status quo for interest rates
Euro Area: An article from Der Spiegel on the Greek measures weigh on the EUR
Japan: New rumors of additional BoJ’s measures
Australia: This weekend’s elections t encourage take profit on AUD
New Zealand: Remark from Central Bank’s boss weigh on the NZD

Today:


Rates in Asia and Indices:
EURUSD: 1.2886 - 1.2823.
USDCHF: 1.0452 - 1.0412.
GBPUSD: 1.5588- 1.5498.
EURJPY: 110.34 – 109.59.
USDJPY: 85.68 – 85.33.
DowJones: 10'415.54 +0.09%
NASDAQ: 2'215.70 +0.28%
S & P 500: 1'094.16 +0.15%
Nikkei: 9'349.21 +1.18%
Shanghai: 2'677.41 +0.42%
Gold: $ 1'228.95    
Crude Oil: $ 76.27

Comments:
The U.S. president reaffirmed that the fiscal deficit of the United States must be reversed in the long term, to avoid compromising the recovery, adding that problems faced by the property market still weighed heavily on the economy.

Published yesterday morning, the minutes of the last MPC (Monetary Policy Committee) meeting of the BoE (Bank of England) showed that for the moment, no further action was planned for quantitative easing. Many analysts do not foresee rising interest rates until next year at the earliest.

An article published by Der Spiegel about the negative impact of Greek fiscal austerity measures on the evolution of the economy has weighed on the EUR that night. The latter, after flirting with 1,29 level against USD yesterday afternoon, returned to test 2 times 1.2782 early this morning in Asia, in markets still thin during the holiday period.

The Japanese press was reflecting this morning possible new monetary easing by the BoJ (Bank of Japan), such that extend from 3 to 6 months duration of loans, or raising the ceiling for these loans from 20 to 30 trillion yen, in an attempt to restore color to the Japanese economy and to counter the continued rise of the JPY against USD.

The uncertainty of elections this weekend in Australia have encouraged profit taking on the Australian dollar, the latter returning from a high of 0.9043 against the USD yesterday afternoon at a low against the USD this morning at 0.8947.

In a speech, the Governor of the Central Bank of New Zealand Allan Bollard said that the recovery was neither robust nor fast, also excluding any immediate new rate increase, causing a rapid decline in the NZD against the USD from 0.7144 to 0.7110 last night.

Have a good day,

Pascal Bovay

RTFX Ltd
Trading desk
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