Overnight equity markets
Nikkei +0.16% 9’574.00
S&P500 -0.62% 1’329.47
Dow -0.38% 12’548.37
Nasdaq -1.63% 2’782.31
Overnight ranges
https://ibol81.ibb.ubs.com/fxdesktop/fxd_fxweb/fxwebapp/osrPopup.do
UBS Morning Adviser/Macro Keys
http://www.easyforexnews.net/uploads/2011/05/MacroKeys170511.pdf
http://www.easyforexnews.net/uploads/2011/05/20110517_MA.pdf
Interest Rate Snapshot
The RBA over night the highlight on the rates side saying that higher interest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target. EFSF Regling mentioned that they will access markets three times to raise funds for Portugal. In the shorter end of the curve we are going to have the 1week ECB tender, 125bln are expiring and the latest poll is looking for a 119bln rollover. Opening on the futures side very muted with a very slight uptick. Bunds are opening 10 tics higher right at the support area of 124.23 , which in our opinion again is a good opportunity to go long for our long awaited push towards 125.56, bigger support comes in around 123.18. Data wise the ZEW Survey release for the euro-zone and Germany might catch some momentum, even though it is by far not as important as the IFO release later in the month, CPI in the UK obviously the big number, which should be on the higher side of expectations.
UBS Investment Bank TRADERS SENTIMENT
…have a look at UBS Investment Bank’s FXWeb for all technical updates
EURUSD Sell rally to 1.4180/1.4200 with stop/loss above 1.4220, targeting 1.4130
USDCHF Buy dips 0.8800/10 with stop/loss below 0.8770, targeting 0.8890
EURCHF Prefer to go long with a stop/loss below 1.2480, targeting 1.2570
EURJPY Prefer to go long with stop/loss below 115.00
USDJPY Buy the dip with stop/loss below 80.80
GBPUSD Play range 1.6170 – 1.6230
EURGBP Play range 0.8710 – 60 for the moment
Gold Buy dips 1484/85 with stop/loss 1478, targeting 1503/1505
Silver Buy dips 33.45/50 with stop/loss 33.25, targeting 34.50/55
The Day Ahead in EM
South Africa: CPI for April is due at 0800GMT (previous 4.1%, Bloomberg consensus 4.4%), also its Retail sales constant for March is due at 1100GMT (previous 5.6%, Bloomberg consensus 5.7%).
Brazil: FIPE CPI- weekly till May 15 is due at 0800GMT (previous 0.64%, Bloomberg consensus 0.58%).
Colombia: Trade balance for March is due at 2100GMT (previous $362.6 mn, Bloomberg consensus $150 mn).
http://www.easyforexnews.net/uploads/2011/05/EM-Today-May-17.pdf
Gary Dhami, UBS Investment Bank