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"EU Outlook"
Our weekly publication insight into which data and events has the potential to move markets in the week ahead, an update on the more interesting chart developments and concludes with a summary of our core strategy views.
- Market more confident on ECB’s OMT backstop despite Spanish procrastination
- EZ equity dip should tempt buyers but EUR’s corrective bounce at its limit
- UK data still looking constructive, political risks worth closer scrutiny
- Pound looks rich, Cable support at 1.5977 vulnerable, switch to neutral EUR/GBP
- US data improving, election noise should distract from fiscal cliff worries near-term
- S&P500 remains bullish, pre-crisis highs at 1,576 in play while market holds 1,419/22
This note covers US, UK and European markets for the week commencing October 22nd.
Full report below…
View: Periphery debt tempting, short Bunds great risk reward at current levels
Gloom continues to dominate Eurozone investor’s thinking with the market reluctant to buy into the idea that there are now adequate backstops (ESM, OMT) available to finally stabilise the debt crisis, continuing to focus on the always distracting political noise. This seemingly forgets as to just how the Eurozone crisis has developed over the past three years or so, specifically just how long it takes for the numerous political factions forging those numerous ‘breakthrough’ agreements to find a consensus on the critical final details. Furthermore one can see from previous bailouts that the longer one generally stalls the easier conditions imposed eventually are, making foot dragging an essential component. Of course the Greek problem remains but even there there seems to be a realisation among the core that it is better to keep the patient’s heart beating than force the country out; at least immediately – which means this side of next year’s German federal elections. In fact senior politicians from both sides have been clear about this over the past couple of weeks.
Full report below…
Our weekly publication insight into which data and events has the potential to move markets in the week ahead, an update on the more interesting chart developments and concludes with a summary of our core strategy views.
- ECB’s OMT ‘plan’ to remain just that as PM Rajoy stalls amid ranging periphery yields
- EZ equity run could extend but EUR’s corrective bounce reaching its limit
- UK data still looking constructive, market buying into improvement
- Pound looks rich, still waiting for signal to short Cable, like long EUR/GBP
- US data improving, election noise should distract from fiscal cliff worries near-term
- S&P500 remains bullish, pre-crisis highs at 1,576 in play while market holds 1,419/22
This note covers US, UK and European markets for the week commencing October 15th.
Full report below…
Our weekly publication insight into which data and events has the potential to move markets in the week ahead, an update on the more interesting chart developments and concludes with a summary of our core strategy views.
- ECB’s OMT ‘plan’ to remain just that while periphery yields look tolerable
- EZ equity run could extend but EUR’s corrective bounce reaching its limit
- UK data remains constructive for now, market buying into improvement
- Pound vulnerable to political risk, prefer USD, still waiting for signal to short Cable
- US data improving, election noise should distract from fiscal cliff worries near-term
- S&P500 remains bullish, pre-crisis highs at 1,576 in play while market holds 1,422
This note covers US, UK and European markets for the week commencing October 8th.
Full report below…
View: Spain ‘worries’ totally predictable, PM Rajoy’s delaying tactics all part of the game
Watching the Eurozone crisis unfold is a bit like sitting down to watch a few Road Runner cartoons, we all know Wylie Coyote is going to run over a cliff at some point we just don’t know what sort of pain and suffering he’ll go through first and the particular shape he’ll form when he hits the bottom. In these terms one could well compare the market to a four year old, deriving endless surprise, dare we say enjoyment, from what is a tried and tested formula. And so we find ourselves with panicked headlines from Spain once again with the usual media tarts rolled out with a new damning indictment on why the project is doomed, a scenario as predictable as any of those classic cartoons.
Full report below…
View: Persist with selling EUR/USD rallies, current move looks stretched, timing the risk
We’ve seen a solid bounce in EUR/USD after a brief penetration of the 1.3000 level this morning, maintaining immediate bullish momentum. While there are doubts surrounding the execution of the ECB’s OMT plan as Spain looks to avoid a formal bailout and the oversight that would accompany this, which is a prerequisite for any central bank support, the onset of QE3 followed by BoJ easing has refocused attention on the influence of central banks on currencies. This is naturally bad for the dollar with the Fed clearly having the most robust/effective track record for keeping the Greenback weak in contrast to Europe where a strong currency is still seen as a sign of confidence in the project rather than a helpful adjustment mechanism. The less said about the Bank of Japan’s ability to guide the JPY weaker the better.
Full report below…
Our weekly publication insight into which data and events has the potential to move markets in the week ahead, an update on the more interesting chart developments and concludes with a summary of our core strategy views.
- ECB’s OMT plan, German ESM approval positive, political posturing should now complicate
- EZ equity run ought to extend but EUR bounce bad news for periphery, still corrective
- Unwind of Jubilee a positive s/t kicker for UK data, overall trend still weak
- Pound vulnerable to fundamentals and political risk, waiting for signal to short Cable
- Fed delivers above expectations with open ended QE3, underpins Gold
- S&P500 move through 1,440 brings pre crisis high at 1,576 into view
This note covers US, UK and European markets for the week commencing September 17th.
Full report below…
View: Bears should have much better levels to play from, 1.63% the key level for Bunds
Quite how far this risk on move can go is hard to say, much of the detail of the Draghi plan was leaked ahead of time but still there was a rush of new money into risk assets once the OMT was formally unveiled and this morning’s German constitutional court decision was equally unsurprising in its outcome, even the oversight the Court requested with regard to the level of German contributions to the ESM.
Full report below…
Our weekly publication insight into which data and events has the potential to move markets in the week ahead, an update on the more interesting chart developments and concludes with a summary of our core strategy views.
- ECB’s OMT plan a significant step thanks to prospects for ‘unlimited’ support
- EZ equity break dents bear case in the s/t, still sceptical of EUR bounce
- Unwind of Jubilee a positive s/t kicker for UK data, overall trend still weak
- Pound vulnerable to shaky fundamentals and political risk, looking to short Cable
- Payrolls might be the QE3 ticket, but look to buy DXY dips, Gold bullish
- S&P500 rally building surprising steam, move through 1,440 would reinforce bulls
This note covers US, UK and European markets for the week commencing September 10th.
Full report below…
