Developed macro
1. Risk appetite was boosted by Draghi’s positive comment and very successful Spanish bond auctions
2. We have fine-tuned our ECB rates forecasts following yesterday’s press conference. We now look for the Refi rate to be cut to 0.75% in March and to 0.50% in Q2.
3. Mixed news continue to come in with regards the Greek debt exchange
4. The November trade deficit likely widened to $45.1B
5. The University of Michigan consumer sentiment index to increase on job market improvement and lower gasoline prices.
Interest rate strategy
1. The basic trend for rates is bullish near term, with even a sharp rally in the periphery failing to stop EUR swaps from crawling lower.
2. The buoyant mood yesterday and specifically primary market flows into the BOT auction suggest that the BTP auction (2014 and 2018 paper) should be better received than recent sales.
3. Belgium is piggybacking on resurgent demand with a surprise 500 mn auction of long-dated OLOs
FX strategy
1. CHF: SNB credibility question see’s EUR/CHF decline.
2. JPY: Foreign inflows to slow but remain important in Q1 2012.
Emerging markets
1. Bank Indonesia shows signs of optimism; Bank of Korea to hold rate
2. Singapore retail sales to drop 0.8% MoM in November on high base
3. Russia to report November trade data and Q4 2011 current account balance
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2012/01/WMT_2012-01-13.pdf
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