We report the results of preliminary analysis of the XMM-Newton EPIC and RGS observations of the candidate black-hole binary LMC X-3 between February and June 2000 .
The observations covered both the soft and the hard X-ray spectral states .
The hard-state spectra were dominated by a power-law component with a photon index \Gamma \approx 1.9 .
The soft-state spectra consisted of a thermal component with a multi-colour disk temperature T _ { in } of \sim 0.9 keV and a power-law tail with \Gamma \approx 2.7 .
The model in which the X-rays from LMC X-3 in the high-soft state are powered by a strong stellar wind from a massive companion is not supported by the small line-of-sight absorption ( n _ { H } \lower 2.15 pt \hbox { $ \buildrel < \over { \sim } $ } 10 ^ { 21 } cm ^ { -2 } ) deduced from the RGS data .
The transition from the soft to the hard state appears to be a continuous process associated with the changes in the mass-transfer rate .