- Today at 11:15 the European Central bank will reveal the three month cash demand level from banks. This will be seen from the market as an important indicator of European bank liquidity: the ECBE rate of 1% is in fact higher than the market rate and borrowing in the three month window over 300 billion is considered by several analysts as a bearish news on European banks. The bank of international settlements recently affirmed that there is a risk that European banks will struggle to refinance their debt if the investor sentiment remains negative.

- While this is Today bad news for European banks it is good news for many of traditional Swiss banks that attract new inflow of funds not based on fiscal advantage but higher stability. Additionally, the Swiss National Bank recently stopped to avoid an appreciation of the Swiss franc as exports remain strong despite the appreciation.

- A good news from China is that this year as many as 54 million Chinese will be traveling abroad (China National Tourism Administration forecast) vs 35 million in 2009 and triple than 10 years ago. This, combined with the yuan 18% vs the Euro this year could open an investment opportunity in European Travel and Leisure companies. This is one of the sectors that will benefit from a cheaper Euro. As some valuations are interesting this could be a good medium-long term investment opportunity;

- In the short term markets will probably remain volatile throughout the summer. The good news is that much of the bad news are already out in the market so unless we see something catastrophic happening (e.g. bank troubles, a big default and further negative data particularly employment data) we should see a rebound from September if not before. European markets are currently largely oversold.

Summary: ECBE announcement very important for this sensitive market, Swiss banks to gain based on security and stability (and the Swiss Franc too) European Travel and Leisure sector interesting as it will benefit from a lower Euro. Volatility to be expected but as always largely oversold markets are a buying opportunity to many investors.