Overnight equity markets
Nikkei +0.99% 9’662.08
S&P500 -0.04% 1’328.98
Dow -0.55% 12’479.58
Nasdaq +0.03% 2’783.21
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/MacroKeys180511.pdf
http://www.easyforexnews.net/uploads/2011/05/20110518_MA.pdf
Interest Rate Snapshot
Headlines overnight are the FED saying that there should be annual stress tests, Geithner pointing to the fact that fixing fiscal problems in two years would cause a recession and last but not least Greek PM Papandreou said that Greece will attack tax evasion vigorously! Market has recovered from yesterdays messy risk off sell everything mode and the greenback is lower this morning, commodities higher and rates will be a tad higher on the back of it this morning as well. Today we get BOE and FOMC minutes, there should be no surprise in it given the press conference and data releases between the decisions and now. However, it will be interesting as the minutes will reveal the sentiment of individual committee members in preparation for potential H2 2011 decisions. On the top of that we also will have several ECB speakers and Riksbank Governor Ingves could reinforce the tightening bias in Sweden. For now the futures are in a very mild down tic mode and that will remain into the opening. Bunds due to open 11 tics lower at 124.31, nicely ahead of support area around 123.82, we still recommend to buy on dips, nevertheless strong resistance lies ahead of us at 124.63, if that hurdle is cleared we will be looking at 125.12 and 125.58 thereafter, downside potential if support breaks is around 123.12 .
UBS Investment Bank TRADERS SENTIMENT
…have a look at UBS Investment Bank’s FXWeb for all technical updates
EURUSD Prefer to buy closer to level 1.4200/20, with a stop/loss below 1.4160, targeting 1.4340
USDCHF Sell the rally 0.8820/30, with a stop above 0.8860/70, targeting 0.8750
EURCHF Prefer to go long 1.2530, with stop/loss below 1.2480/90, targeting 1.2610
EURJPY Prefer to go short with stop/loss above 116.20, targeting 115.00
USDJPY Sell the dip with stop/loss above 81.40, targeting 80.60
GBPUSD Go long at 1.6220, with a stop/loss below 1.6180, targeting 1.6320
EURGBP Buy dips 0.8740, with a stop/loss below 0.8700, targeting resistance at 0.8805
Gold Sell at 1495, targeting 1485
Silver Buy dips at 33.75, targeting 34.50
The Day Ahead in EM
Hungary: Average gross wages for April is due at 0700GMT (previous 4.8%, Bloomberg consensus 1.7%).
Malaysia: CPI for April is due at 0900GMT (previous 3.0%, Bloomberg consensus 3.1%), also its GDP for Q1 is due at 1000GMT (previous 4.8%, Bloomberg consensus 4.9%).
Brazil: FGV Preview inflation IGP-M till May 17 is due at 1100GMT (previous 0.55%, Bloomberg consensus 0.65%), also its Economy activity index for March is due at 1530GMT (previous 6.98%).
Poland: Average gross wages for April is due at 1200GMT (previous 4.0%, Bloomberg consensus 4.7%).
Israel: Inflation for May (previous 3.1%) and Money supply for April (previous 5.2%) are due.
Russia: PPI for April (previous 20.9%, Bloomberg consensus 19.4%) and Weekly CPI ytd till May 16 (previous 4.4%) are due.
Chile: Current account (previous $1216.0 mn, Bloomberg consensus $408.0 mn) and GDP (previous 5.80%, Bloomberg consensus 9.80%) for Q1 are due at 1230GMT.
Gary Dhami,
UBS Investment Bank