Developed macro
1. Risk aversion remains highly elevated, with little prospect of a drop any time soon as Italy’s downgrade adds to Europe’s woes
2. Greece to hold another conference call with the Troika today after a “constructive” discussion yesterday evening, but no official statement yet.
3. The German ZEW should fall, but perhaps not as much as last month.
4. US: August Housing starts are expected to continue to decline (-1.5%), offsetting the 10.9% surge in June.
Interest rate strategy
1. Greek and Spanish T-bills on agenda; Greek coupon payment due today
2. ECB’s carries out weekly MRO and SMP sterilisation operations
FX strategy
1. Positive speculative USD positioning in first time for over a year highlights massive shift in USD sentiment.
2. EUR sentiment set to have soured further overnight following Italy’s downgrade and EUR/USD remains vulnerable too a test of support around 1.3500
3. GBP remains vulnerable versus USD as QE expectations intensify but will continue to hold its own against the EUR
4. USD/JPY confined to a tight range as yield differential compression prevents a move higher
Emerging markets
1. EMs to follow negative mood in DMs again
2. Turkey and Hungary to stay put on rates
3. Thai exports, Taiwanese export orders to slow
4. Risk of FX intervention in Asia is high after Korea notes inflationary impact of plunging KRW
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http://www.easyforexnews.net/wp-content/uploads/2011/09/WMT_2011-09-20.pdf
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