Cuba share the same rating as Greece:
I wonder if the Cubans are upset .
With yet another Greek package on the table , the market temporarily shrugs off Euroe’s woes , but it took a sea of red in the equity space to knock the Euro off it’s perch .
Themes
Equities are driving FX .
Periphary concerns lurk in the shadows .
Sterling remains under pressure .
The Swiss Franc is in favour
Positions Views:
Today
-the Euro sits mid range and we prefer to play it from the long side and looking to lighten at 1.4450 but cautious of a break above 1.4475 . A move above there signals 1.4600 . Buy the dip mentality .
-BoE’s Fisher was again very dovish in the press last night . It seems there has been a dove-ish tilt in the centre of gravity inthe MPC . There was a swathe of Gbp/Chf selling from all sorts of accounts yesterday which looked like pure liquidation . We have some stops to the top side 1.3900 today .
-Commodities which have been the leader in recent times are taking aback seat and tracking risk .
-The Franc was the darling of FX yesterday and is still a buy on dips but we see some profit taking this morning .
Core
-Cautiously bullish Audusd and eurusd due to pure positioning .
-bearish the Yen – US 10 yr’s are below 3% .
Our positioning remains light in these choppy markets . We prefer a hit and run strategy .
UBS Investment Bank