Monthly Archives: May 2011

Move stops on current positions – long bund, short eur/usd, long usd/sek EU 2-10 swap curve is breaking this years downtrend – allow for short term widening

– AUD and KRW lead sell-off vs USD, Asian equities down 0.3-0.7% – Turkey’s MPC likely to keep policy rates unchanged at 6.25% – US durable goods likely provide more headwind for risk assets

Markets will open on the back foot in Europe. MSCI Asia Pacific earnings were down 11% last quarter, while a tech company disappointed. Equities in the region dropped at the open before stabilising, while USD/Asia was a bit up with the crucial exception of CNY.

EUR/USD is finding some cloud support, circa 1.3975 (see chart). So far this has prompted a very small rebound and near term the market will encounter initial resistance at 1.4195 ahead of 1.4305/45. While capped here, a negative bias will remain.

Accelerated Greek privatisations signal progress on approval of next aid tranche EFSM bond issue to add to EUR support Norway GDP disappoints but we still like short GBPNOK, targeting 8.90

EUR USD (1.4060) Short-term traders had it their way yesterday, as their various selling arguments accompanied the euro on a brief dip below $1.40.

Accelerated Greek privatisations signal progress on approval of next aid tranche EFSM bond issue to add to EUR support Higher than expected Norwegian GDP to keep NOK well bid

Over the last 24 hours the outlook for risk has been mixed. The EUR has rebounded off daily cloud support against USD, GBP and SEK.

G10 Currencies EUR-USD: Having traded below the 1.40 mark for the first time since Mid-March again, it looks as if EUR-USD has recovered slightly this morning. The news on the debt crisis is however little suited to support the euro.

Intro from Allison Nathan (GIR) : Please note we have just published a new Commodity Watch: Turning more bullish as supply-shock concerns fade. Although near-term downside risk remains as markets adapt to a slower growth environment with supply-shock concerns fading, we now believe that the risk/reward once again favours being long commodities.

The Greek FinMin stated that the government would have to stop payments, salaries and pensions should Greece not receive its latest tranche from the IMF.