Francesc Riverola's Blog (2,694)

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Hi guys... time to have some fun

I am proposing you a small and casual contest called "The Oracle"

The goal.... let's find out how good - or bad - forecasters we are:…

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Added by Francesc Riverola on March 18, 2013 at 1:00pm — 97 Comments

Westpac - We remain short EUR/USD from 1.3021 and short EUR/GBP from 0.8718

Westpac - "AUD/USD: Domestic indicators are sufficiently mixed to leave the pair inside a rough 1.02-1.0425 range, with RBA easing probable but not imminent. Commodities are broadly weak, capping gains. Renewed Cyprus/Italy jitters help AUD vs EUR but not vs USD.

NZD/USD: Remains vulnerable to a deeper decline in the near term. The main reasons for this are (a) global risk sentiment has soured a little, (b) the speculative world remains extremely long the NZD, and (c) the drought has…

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Added by Francesc Riverola on March 18, 2013 at 11:46am — 1 Comment

Societe Generale - Selling EUR/USD on rallies

Societé Generale - "Following the Cyprus rescue package, EURUSD gapped lower but failed to take out the key support at 1.2880 (82 was the low) and has since retraced a bit. Longer term money is yet to react fully suggesting a sell on rally strategy remains appropriate. They will likely wait for the decision of the Cyprus parliament.

Initial reports were that it was set for for 10am EDT. With questionable odds it will pass, it seems we are seeing some back door negotiation between Cyprus…

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Added by Francesc Riverola on March 18, 2013 at 11:36am — No Comments

Goldman Sachs - Sterling Realignment but Little Change in the Dollar

Goldman Sachs - "FX markets remain dominated by offsetting policy forces, which we described as a non-cooperative Global Exchange rate Mechanism (...) Within such a regime, much of the market focus has to be on the risk of ‘realignments’, or policy shifts, which have the potential to move a currency to a new level. Such a shift has happened in the Yen already. Our view is that the risks from current levels are broadly balanced, and this is reflected in our new forecasts, centred around $/JPY…

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Added by Francesc Riverola on March 18, 2013 at 10:25am — No Comments

Danske Bank - Buy EUR/GBP and buy US 30 Year Bond yields

Danske Bank - "EUR/GBP – Strong trend favours dip buying

• Strategy Summary – Buy at .8576 for an objective of .9084. Place stop at .8441.

(...) While the current price congestion may persist over the shorter-term, only a breach of the 11 February low at .8442 would cause us to stand aside and revaluate.

US 30-Year Bond Yield – Bull MACD cross signals further upside

• Strategy Summary – Buy yields on weakness for 3.492%, with scope for an extension towards 3.648%. Place a…

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Added by Francesc Riverola on March 18, 2013 at 10:16am — No Comments

BTMU - Cyprus to dominate after shock 'deposit tax' announcement

Bank of Tokyo-Mitsubishi - "The immediate focus at the outset of the London trading session today will be whether or not the deal will be passed in parliament in Cyprus. The ECB had urged for a vote yesterday before the markets opened today but that was postponed – so the focus is very much on getting this passed in parliament.

There are apparent negotiations ongoing in tweaking the tax rate levels for deposits under 100k – this may be required in order to get the necessary support in…

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Added by Francesc Riverola on March 18, 2013 at 10:06am — No Comments

RBS - EUR downtrend continues as Eurogroup takes a punt on Cyprus

Royal Bank of Scotland - "The EUR was up on Friday with some broad-based USD weakness. But it failed to rise above the recent high around 1.314, reaching a high of 1.3107. The chart below identifies 1.314 to 1.317 as significant resistance from trading over the last 7 months. As such, EUR remains essentially in a downtrend since its high on 1 Feb. It is now testing significant resistance around 1.288, and the lower end of a recent declining channel.

(...) GBP rebounded from recent lows…

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Added by Francesc Riverola on March 18, 2013 at 10:00am — No Comments

BBH - Euro & Sterling: Risk for another leg down before a more sustained correction unfolds

Brown Brothers Harriman - "The euro's recent losses have met the minimum objective of the large head and shoulders topping pattern we previously identified (the right shoulder was carved out in the second half of Dec '12, the head was created by the brief move above $1.3700, and the right shoulder was formed in mid-Feb). This, coupled with retracement targets, suggested a test on the $1.2880-$1.2900. The euro neared $1.2900 (~$1.2911 on March 14) before bouncing almost two cents to briefly…

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Added by Francesc Riverola on March 18, 2013 at 9:45am — No Comments

UBS - EURUSD Bearish A break below 1.2876 would expose 1.2662; GBPUSD Bearish The recent recovery does not change the broader bearish picture

UBS - "EURUSD BEARISH The pair posted a new low and is currently trading just above support at 1.2876. A break below would expose 1.2662. Resistance is at 1.2998 ahead of 1.3107.

USDJPY BULLISH The latest weakness is held by the main support at 93.11. While this holds on closing basis, there is scope for resumption of upside. Resistance is at 96.71.

GBPUSD BEARISH The recent recovery does not change the broader bearish picture. Important resistance is at 1.5199. Support is at…

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Added by Francesc Riverola on March 18, 2013 at 9:00am — No Comments

Rabobank: GBP is all the bad news priced-in?

Rabobank: "GBP: If there were ever any doubts over whether the UK economy was facing a difficult 2013, recent poor economic developments have put paid to any further discussion. Following a sharp decline since the start of this year, the outlook for sterling is now dominated not by the question of whether the pound faces economic headwinds but instead by doubts at the whether or not these are yet fully priced in. UK commentators have been warning of the risks of a triple dip recession, bad… Continue

Added by Francesc Riverola on March 16, 2013 at 4:41pm — No Comments

Deutsche Bank - Asia Forex: Uneven ground

Deutsche Bank - "USD strength has played out unevenly across Asian FX. Regional currencies can be grouped into three categories reflecting the distance from their post-crisis highs against the USD. The first group (CNY, PHP and THB) is trading at or very near their highs, with currencies benefiting from strong structural stories or supportive policy biases. The second group (SGD, TWD, KRW and MYR) began to struggle only this year, succumbing to yen weakness and broader USD headwinds. The…

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Added by Francesc Riverola on March 16, 2013 at 9:04am — No Comments

UBS - Sterling is likely to be the biggest mover in the week ahead

UBS - "Sterling is likely to be the biggest mover in the week ahead. On Wednesday, Bank of England Monetary Policy Committee minutes are released while, separately, the UK Budget may announce a review of the central bank's inflation target. We expect this will cause the pound to weaken.

(...) This week's key points are:



- dollar bulls should check the FOMC's new forecasts

- PMI data key for euro in the week ahead

- new BoJ leadership approved, still buy USDJPY…

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Added by Francesc Riverola on March 16, 2013 at 8:48am — No Comments

Goldman Sachs - Central Bank Watch

Goldman Sachs -

Added by Francesc Riverola on March 15, 2013 at 3:02pm — No Comments

TD Securities - Upcoming Week: The Big Three - Central banks, PMIs and the UK Budget to dominate

TD Securities - "Upcoming Week:

UK

1. 2013-14 Budget (Wed 20 Mar): We expect the OBR’s

forecasts to judge that most of the weakness in the UK

economy is cyclical but expect the PSNCR forecast for

2013/14 to be revised up from £161bn to £163.3bn.

2. BoE Minutes (Wed 20 Mar)

3. Retail Sales (Thurs 21 Mar)

Remaining Europe

1. Italian Politics (ongoing)

2. Flash PMIs (Thurs 21 Mar)

3. EU Leaders’ Summit (Thurs-Fri…

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Added by Francesc Riverola on March 15, 2013 at 2:52pm — No Comments

Rabobank - GBP Enough is enough?

Rabobank - "BoE Governor King may have had a preference for more QE at last month’s policy meeting but his remarks yesterday suggest that he has become unsettled by the extent of sterling’s drop this year and potentially by the accusation that he has specifically tried to weaken the pound. If the MPC do judge that the falls in sterling in recent weeks have been ‘too far too fast’ there is reason to expect that the committee may collectively decide to delay further policy stimulus. This…

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Added by Francesc Riverola on March 15, 2013 at 12:21pm — No Comments

Westpac - EM Asia: USD/KRW, USD/SGD & INR/IDR

Westpac - "EM Asia: USD/KRW: Risks to USD/KRW still appear skewed to the upside and while we should see more selling interest emerge in the pair on moves above 1120, it certainly doesn't fell like we have reached a top yet.

USD/SGD: We maintain our bias to buy dips in USD/SGD. Data momentum remains soft and if next week's inflation data is benign, we see scope for easier policy at the April MAS meeting. We would look to…

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Added by Francesc Riverola on March 15, 2013 at 12:06pm — No Comments

BTMU - USD/JPY will find it difficult to sustain these levels once the BOJ takes its first monetary steps

Bank of Tokyo-Mitsubishi - "Our view is unchanged – we suspect yen weakness can carry on over the coming weeks into the first meeting, possibly through the second meeting but beyond then we expect the yen to correct stronger. Our three-month USD/JPY forecast is currently 92.00. With little sign of any major shift in risk appetite amongst Japanese households and with Life Insurance Companies more likely to reduce hedging ratios only gradually by buying on dips, we suspect USD/JPY will find it…

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Added by Francesc Riverola on March 15, 2013 at 9:24am — No Comments

Societe Generale - Three themes, one king

Societé Generale - "The FX markets are now under the influence of a trilogy of themes: the American economic revival, diverging monetary policy expectations and the (unfinished) euro area (EA) crisis.

Those themes all point in the same direction: a stronger dollar. Dollar strength is now far less dependent on risk conditions; the US economic outperformance and the fears of a not-too-distant Fed exit imply that the dollar is no longer a funding currency of choice in the carry trade. The…

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Added by Francesc Riverola on March 15, 2013 at 9:11am — No Comments

JP Morgan - American energy independence and the dollar

JP Morgan - "The multi-year boom in US oil and gas production has spawned bold forecasts, such as eventual American energy independence and long-term dollar appreciation. The logic is simple and powerful: since America’s energy trade deficit has accounted for 30% to 50% of the country's overall trade deficit over the past decade, becoming a net energy exporter could improve the current account substantially and transform the dollar from a generally counter-cyclical asset like the yen to a…

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Added by Francesc Riverola on March 15, 2013 at 8:49am — No Comments

UBS - EURUSD Focus is on the support at 1.2876; USDJPY Scope for further strength in the near-term

UBS - "EURUSD BEARISH Bearish trend conditions persist. Focus is on the support at 1.2876, a break below would expose 1.2662. Resistance is at 1.3074 ahead of 1.3134.

USDJPY BULLISH There is scope for further strength in the near-term. A break above 96.71 would open 97.79 and then 99.875. Support is at 95.45 ahead of 94.48.

GBPUSD BEARISH Yesterday's sharp advance does not change the broader bearish picture. Important resistance is at 1.5199. Support is at 1.4912 ahead of…

Added by Francesc Riverola on March 15, 2013 at 8:37am — No Comments

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