Pressure remains on banks due to the anticipation of potential nationalisations

·         Markets upside down on the day of options expiration : DJ -1.3%, S&P500 -1.1%, NASDAQ -0.1%, NIKKEI -0.5%, EUROSTOXX -4.9 and probably up at the opening.

·         BANKING SECTOR : In the US, pressure remains heavy on banks as investors anticipate a possible nationalisation of  “giants” like BANK OF AMERICA or CITIGROUP. In Europe, same situation as fears of major problems in the East European financial sector are mounting.

·         ASIA : Japan, China, South Korea (80% for their part) and 10 other Asian countries have decided to launch a pool of foreign currencies reserves in order to help their central banks fight possible speculation on their own currency.

·         MONEY MARKET : The premium banks charge one another for short term lending (Libor OIS spread) surge above 1% last week for the first time since early January. Banks are still very reluctant to relax credit conditions. It seems that confidence still has a long way to go and that the crisis could last at least till 2010.

·         VIX is up at 49.3. Gold is still in favour at 987.8 USD per oz as the oil price at 41.9 USD (BFOE). The USD is down significantly against the EUR at 1.30. 10-2 years spread is virtually unchanged at 1.39. The 5y CMS stands at 2.843 and the 3y at 2.393.

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