Francesc Riverola's Blog (2,701)

BTMU - Cyprus: We assume sense will prevail

Bank of Tokyo-Mitsubishi - "After a long time of relative calm in euro-zone financial markets, we are back to headline watching as we await the outcome of the parliamentary vote from Cyprus. The euro has dropped a bit in the last 30mins on the news from CNBC that the Cypriot president has told Angela Merkel that parliament will not pass the bank deposit tax legislation. It is clear that the most logical and now necessary step that needs to be taken is for the levy under 100k to be scrapped…

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Added by Francesc Riverola on March 19, 2013 at 10:49am — No Comments

ANZ - India: Take Profit on Short USD/INR Trade. Look to Re-Enter at 55. Stay Long 5Y Bonds

ANZ - "The Reserve Bank of India delivered a 25bp cut in the policy rate as expected, taking the repo rate to 7.50% and the reverse repo rate to 6.50%.

(...) Also, DMK, the ruling UPA government’s largest ally, announced that it is pulling out from the coalition. While the UPA, together with support from smaller parties, can continue to govern as a minority government, it cannot afford the departure of another coalition partner.

Over the longer term, we think that there could be more…

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Added by Francesc Riverola on March 19, 2013 at 10:39am — No Comments

UBS - So you want to be short EUR?

UBS - "As the dust continues to settle from the Cyprus fallout, it cannot be denied that the way the country’s bailout was handled has simply reinforced the prejudices of many investors who have a structural bias against the euro. From muddled messages to the lack of coordination, clients looking from afar will ask: if such a small country can cause so much stress, then what will happen if a larger periphery country faced…

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Added by Francesc Riverola on March 19, 2013 at 10:31am — No Comments

Goldman Sachs - Dollar Weakness Ahead

Goldman Sachs - "Our core view over the medium and longer term is to expect broad Dollar weakness. This is due to the structural, large deficits in the balance of payments and government budget that are likely to persist, and the easy monetary policy stance of the Fed. In December, the FOMC announced open-ended asset purchases at a rate of US$85bn per month funded by balance sheet expansion, until the labour market improves ‘substantially’, and we expect these purchases to continue through…

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Added by Francesc Riverola on March 19, 2013 at 10:29am — No Comments

UBS - We downgrade our one and three month EURUSD forecasts

UBS - "This year we expect the euro to trade back to 1.20 against the dollar by year end as America's economy outperforms, the Federal Reserve starts scaling back its asset purchases in the second half of the year, foreign central bank and sovereign wealth fund managers desist from dollar diversification and America's shale energy boom cuts the US current account deficit.

But we had expected this year's range so far in the euro of 1.30-1.37 to remain intact into Q2'13.

(...) Italy's…

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Added by Francesc Riverola on March 18, 2013 at 6:49pm — No Comments

TD Securities - USD/CAD Look to buy dips

TD Securities - "The twin rejections at 1.0340 and the subsequent loss of short-term range support and the double top neckline trigger at 1.0257 clearly puts a softer spin on the charts for USD/CAD. Trend momentum has turned negative on the short-term term studies, suggesting limited scope for USD/CAD gains at the moment. But downside scope may also be limited. The measured move target derived from the 1.0340 double top has already been largely reached (1.0174). The USD has, so far, found…

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Added by Francesc Riverola on March 18, 2013 at 6:43pm — No Comments

AllianceBdernstein - UK Budget: No Fiscal Consolidation, But Looser Money Ahead

AllianceBdernstein - "We expect little change in UK fiscal policy in Wednesday’s budget. Instead the Chancellor George Osborne may try to nudge the Bank of England towards more aggressive monetary easing, putting further pressure on the pound.

This week, British Chancellor George Osborne will present his fourth annual budget. He will do so with the economy flat-lining, deficit-reduction stalling and many commentators calling for a loosening of fiscal policy to re-start growth. Having…

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Added by Francesc Riverola on March 18, 2013 at 3:42pm — No Comments

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Hi guys... time to have some fun

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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

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