A summer break with no breakthrough

- FI Strategizer: "Next week, US data confirming the slowdown in the economic recovery should be supportive for Treasuries. In the EMU, solid figures on German IP and orders should keep investors moderately optimistic, with Bunds suffering slightly. We do not expect major
surprises from the ECB meeting."
- EU Portfolio Strategy: "We would return to a minor long duration stance of +0.5 years. We keep our positive view on Italy and we increase moderately our exposure on Spain, closing further the gap with EFFAS weightings. We remain moderately overweight on France."
- Trade Idea: "Over the last week, Spain tightened sharply vs. Italy, especially at the front end and at the extra long end. We prefer Italy, due to its sounder macroeconomic fundamentals and we thus suggest switching from Spain into Italy at the 3Y maturity."
- MM: "This week, results of the 3M auction sent a reassuring signal, confirming that the EU banking system is sound. Next week, only the 1W MRO is scheduled, with EUR 190bn expiring. In line with this week, we expect demand to be slightly lower than the amount expiring, leading to another modest drop in liquidity."
- Supply Corner: "Next week, primary market activity will slow down. There will be no redemptions or coupons in the EMU, while gross supply should be a modest EUR 4bn, coming from Austria and Spain. Activity should focus on the short end, with little action on the extra long end."
- FX Strategizer: "The USD took the full impact of soft US news, but we do not expect the current market scenario to improve sharply. Investors are likely to scale back their risk exposure, which should provide USD, JPY and CHF some relief and put AUD, NZD and EUR under pressure."
- EUR: "The EMU growth prospects will not be strong enough to completely offset the outstanding budget crisis. The EUR-USD strength should ease and the next key resistance level at 1.3125 won’t be broken easily."
- JPY: "The latent downward pressure in USD-JPY and the modest upside potential for EUR-USD will limit any EUR-JPY rebound. EUR-JPY is thus unlikely to break through, while USD-JPY should stay in the 86/88 band."
- CHF: "As feared, the EUR-CHF recovery proved to be quite capped above 1.38: as risk aversion might spark more demand for safe-haven currencies, a full break of the 1.36 base may prompt a further sell-off."
- GBP: "Sterling should stay firm also in August with risks that our mediumterm target for cable at 1.60 may be hit rapidly. EUR-GBP should offer a more constrained picture, as a full break towards 0.80 might require time."
- Pacific Rim & CAD: "Commodity units are now less supported by tighter monetary policy at home. The AUD, NZD and CAD should hold the line vs. the USD, but their recent rally is likely to stay frozen in August."
- Nordics: "A more pronounced plunge of EUR-SEK and EUR-NOK below 9.40 and 7.95 appears quite ambitious at this stage. The two Nordic units should thus struggle in the “land of nowhere” in the coming weeks too."

Unicredit Curves & Crosses 20100730

No comments:

Post a Comment