Currency market clearly has changed for the better, perhaps, for the first time since September 11, 2001. Focus on the market again, macroeconomic data and technical calculation, rather than fears of terrorist attacks and military reports. Nervousness disappeared, increased volatility and low liquidity. I woke up a healthy investor appetite for assets with higher risk, during the "safe heaven" exhausted. Investors withdrew assets-haven - gold, Swiss franc and government obligations. The global sale of bonds severely undermined rate EUR. During a recent 12-month Eurodollar trend was the increased interest in the EUR-denominated assets in general, and Eurobonds, in particular. Japanese investors in particular have invested heavily in European bonds. Now, as a result of clarifying their positions on the European assets, they are "down" EUR-JPY

rate of "synthetic" high 140,90 to a strong level of support for 133.20 / 00. Sales evroyeny began with a June 16, when it still traded at the peak of the day 140.21. It is on this week, according to the Japan Ministry of Finance (MoF), the Japanese started "over the repatriation of" JPY foreign bonds. MoF data showed that Japanese investors sold the week of June 27, foreign bonds worth $ 10 billion. This is a rather alarming figure for one week. In particular, against the backdrop of continued global sales of U.S. and European bonds. Over the next couple of weeks of June 16, Japanese investors sold foreign bonds worth $ 13.5 billion . In July, the Japanese "blue chips" up to 10 months of riding, index Nikkei 225 "tested" barrier 10000 (Peak 10,070) and grew by about 30% after April's 20-year bottom. Foreign investors were net buyers of Japanese sinks in the past 12 weeks - the longest bull market in the last 4 years. Japanese economic background is improving, as seen in the July macroeconomic surveys, beginning with the quarterly reports the Bank of Japan (BoJ) Tankan. Nikkei rally and during the repatriation "of foreign bonds is still supported by JPY. According to trade data Tokyo Stock Exchange (TSE) in the sector of investment, foreigners increased their purchases in the week from 30 June to 04 July to net Y584 billion to Y114 billion net purchases the previous week. Clever Japanese investors have used this rally is a good chance to "unload" their long positions on the flow and eliminate the entire portfolio. Investment funds sold for the week of effluent in the amount of Y64, 8 billion net (Y26 week earlier), local banks have sold in the amount of Y52, 7 billion (Y19, 8), trust banks sold in the amount of Y194, 7 (against 165.2 ). Even individual investors are net buyers (the previous week in the amount of Y6, 5 billion) was sold for the week of effluent in the amount of Y157, 7 billion in looking at such statistics TSE, is difficult to assume that Japanese investors switched from bonds to the runoff. July 11, Nikkei "down" at 320.27 and closed 9,635.35, following the collapse of Wall Street, where the corporate reporting season for 2 months. Investment MoF data indicate that foreign purchases of Japanese waste water "lost" in the $ 5 billion for the week of July 4, a "repatriation during the" Japanese capital from foreign bonds slowed. Net capital inflows opolovinen to $ 4 billion (after the $ 9 billion a week earlier), although so far the trend remains positive for the JPY. At the same time, liquidity in Japan is growing rapidly - 20% y / y and 4.5% m / m (again, foreigners bought the paper). At the market, it was reported that according to the Fed, for the week of 03 July, the Bank of Japan sold yen in the amount of $ 7 - $ 10 billion in the intervention. This is in line with market speculation that the BoJ "intervenil" in an area of 119, than trying to balance the massive repatriation of the yen of foreign bonds in the week. For more than a month remains valid protection level BoJ 117.50. In July, we again have seen sales of the yen when the market has attempted to ensure that the rate of USD / JPY lower. According to the Tankan, equilibrium exchange rate USD / JPY for Japanese exporters bank sees 117.88 and probably intend to defend it in the next three months. Most likely, the rate of USD / JPY will remain in the range of 117-119 yen to the dollar, until not a "fresh" direction in the market. Not expected to change monetary policy at the BoJ 2-day monthly meeting to be held next week. The European Central Bank (ECB) left rates unchanged at a meeting July 9-10, at the level of market expectations. But the market is confident in the next cutting repo rate (the current value of 2.0%) to 0.5 percentage point in the near future, probably on 4 September. Such confidence is based on the absence of E12 momentum of economic growth and inflation data. Of course, cutting a negative impact on interest rates and the level of profitability of European assets, as well as the rate of EUR. While there is no change in 3-week downward trend EUR / USD. Following the decision of the Bank's Eurodollar rose slightly in the current dauntrenda to the lower limit of the previous range of 1,14 USD, where once again "down" to 1.13 (after the interview with Chancellor Schroeder, the British The Financial Times). Schroeder called polisimeykerov ECB to hold an intervention in the market to stop the growth of the euro. European Commission President Romano Solbes expressed doubt that the growth in the euro zone this year to reach 1%. The European Commission suggests the growth of not more than 0,7% in 2003, though this will depend on the dynamics of 3-4 quarters. " The European authorities called on Asian countries to mitigate the foreign exchange controls to reduce the demand for euro. This was at the July annual meeting of European and Asian finance ministers in Indonesia. In particular, it refers to the state exchange control in China, the rate highly undervalued yuan, and the issue of China's protectionist policies have long been irritated by Japan, the United States and Europe. It seems a sign of growing concern among European polisimeykerov in the face of GDP growth in E12 less than 1% this year. German industrial new orders dropped to 2.2% m / m in May (the market expecting growth at 0.4%), a component of foreign orders fell by 4.8%. Until now, it is believed that a strong euro is a major negative factor for European manufacturers. While EUR / USD "traded" above the 1.1250 barrier option, purchase protection and the demand for euro Middle Eastern names suggest that the level of immune. The market speculation Asians again revise their reserve assets (from USD to EUR). However, until the Eurodollar "trading below 1.1435, remains a risk of falling to a strong technical level of 1.1226 / 1.1218. Conversely, a strong return above 1.1435 / 50 involves reducing pressure on the euro and trade in the recent range of 1,14-1,16 USD. The market will be pleased "played" light surprise prepodnesenny Bank of England (BoE) in the form of lowering the discount rate to 3,5%. Not yet had time to settle the dust after the "fall" cable cutting rates as the market began friendly conversations that take into account virtually cutting prices. Sterling has "dropped" almost the whole week, so dealers are considered sufficient depth of the fall of GBP / USD to 1.6220. As a result, was clearly realized market principle: "sell rumor buy fact". Shopping on the facts "were due to the elimination of" short "in Sterling, with a depth of 1.6220 / 30 began buying the corporate accounts. Pending a decision BoE cutting rates the likelihood of the Bank of England was at 40%. It was believed that the decision to leave rates unchanged definitely ease the pressure on the cable. Prior to this pressure has led to an increase in cross EUR-GBP 0.6859 peak of 0.6964. Analysts were expecting the final cutting of a 25 BP at the earliest in August. They assumed that polisimeykeram will be more comfortable to assess the impact of course Sterling on the economy and the inflation rate in Britain in August, after the release of the Bank's inflation report in 3 months. In addition, the delay cutting until August would avoid unwanted krivotolkov on the market about the new policy, the new head of the Bank's Mervyn King and his deputy Lomaksa. Course Sterling, again is one of the central challenges of meeting the monetary BoE. Since the last review, rate GBP / USD was unable to return to the scope of its rising to 1.6905 and the trend began to decline from the levels of 1.6700 / 20. Falling global markets bonds led investors to wonder whether the topic of "high rates" (high yielding currencies) dominating the market. During the week of July 11 fell, except for Sterling, dollar bloc currencies (Aussie, Looney and Kiwi). A fundamental limiting factor in the growth of Sterling is the external demand for UK assets. There is doubt - there will be growing British consumer sector, in particular, and the British economy as a whole. The market already takes into account short-term obligations (prices) further cutting to 25 BP in December. The focus of the market will be reports on the PPI and retail sales sector, BRC (British Retail Confederation operators) on 14 July and a report on consumer inflation PRI on July 15. However, the solvency of the "short" positions on the Sterling looks vulnerable in the event of the fall U.S. run-off and total weakening USD. The main focus of the market future of the dollar. While the mood of the market it definitely positive. In the consumer sector (consumer spending accounted for 70% of U.S. GDP), and among investors, the market looks optimistic. Latest statistics on investment in the States yet, but previous official figures indicate a slight influx of foreign capital in the U.S. run-off. In July Index Nasdaq Composite "tested" the level of 14-month "top" in the region of 1750 (the computer sector to grow the company by Microsoft and Intel), while the DJIA and the Standard & Poors 500 remained at the previous "strong" levels. Within the S & P high tech sector has grown by 25% to 14% on the average index for 2003 Investors say that nizhayshie for 45 years and the last bid package of tax incentives worth $ 350 billion flow to continue to help rally the first half. Corporate reporting season begins in 2 months. According to Thomson Financial forecast for the 2 quarter of profitability for the flow of S & P 500 rose 5.3% on average. Analysts predict a further increase in the 3 quarter by 13% in the 4th - 21% on average. About a quarter of the index Standard & Poors 500 will announce its results for the quarter, 2 in the next couple of weeks. It is too early to say how justified those predictions. The season began with the fact that the disappointing record Yahoo! Inc., And the most expensive company in the world of General Electric ($ 303 billion, № 1 for capitalization on the stock market), showed revenue at the lower boundaries of expectations. The focus of the market will record a semi-annual Head of Fed's Alan Greenspan (Humphrey Hawkins testimony) before the Finance Committee of Congress on July 15. World financial markets in anticipation of assessments: the state of the economy, labor market and prospects for inflation.