Developed macro
1. The result of the Slovakian vote on EFSF 2.0 remains uncertain as the SAS party has continued to reject agreement
2. UK industrial production set to contract in August
3. Japan’s current account surplus narrowed in August
Interest rate strategy
1. Barring fresh fundamental news, we are rather sceptical of some of the reasoning behind the Bund sell-off (other than the fact yields are very low).
2. ‘Political’ risk surrounding the Euro periphery still abounds. Look out for the Greece-Troika discussion to be concluded and the Slovak vote in the EFSF.
3. Italian and Greek bill auctions are of interest. The Dutch 2017 sale should go reasonably smoothly.
FX strategy
1. USD rally has been impressive but is beginning to stall
2. EUR stronger on hopes of concrete action by European officials
3. JPY still firm but could weaken as US yield differentials widen versus Japan
4. GBP recovers on the coat tails of a firmer EUR despite BoE QE
Emerging markets
1. Bank Indonesia to keep its key rate unchanged at 6.75%
2. CNY IRS curve to steepen in the coming months, especially across 1/5Y or 2/5Y
3. Turkey to report narrowing C/A deficit at USD 4bn, adding relief to the TRY
Commodity markets
1. Gold: Lower prices and volatility lures buyers back.
2. Risk on tone boosts base metals.
3. LME Week was mixed but trade sentiment is still fairly upbeat.
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2011/10/WMT_2011-10-11.pdf
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