Market Views

Watched News

Euro Zone Focused:

• Needs Eur around 9 billion by May 19 but rates for raising debt on the markets are “prohibitive”, Greece Fin Min Papaconstantinou quoted on AFP, said Monday. (AFP)
• German Chancellor Angela Merkel says Greece must meet tough conditions to secure aid from Euro Zone partners.
• Greek 5-year n Portuguese 5-year credit default swaps hit session highs of 713 basis points n 318 basis points respectively b4 retreating briefly to 702.8 basis points n 305.5 basis points.
• ECB Weber: No risk of Eur collapse, and unrealistic that Greece would be removed from the Euro Zone (CNBC)
• German government an election on May 9.

UK Economy Focused

• Growing support for the Conservatives.

US Economy Focused:

• US Senate votes 57-41 to move on Financial Overhaul Bill as Test Vote Falls Short (DJ)
• Fed decision later this week
• Chatters circulating of large (couple of yards) USD sell related flows into month end, mostly tomorrow. Possibly against Eur and Gbp.

Asian Economy Focused:

• BOJ decision later this week
• Japan car sales figures weaker than expected, partly because of higher sales tax which was raised from 3% to 5%.
• China intervention into the real estate business could trigger an estimated 400 billion Yuan ($58.6 billion) to flow out of property and possibly equities (Bloomberg)

Australasia:

• RBNZ meeting later this week.

Market Views

Eur –CDS spreads continue to be the market’s most watched sentiment indicator on Greece’s debt issues, and the PIGS (Portugal, Italy, Greece and Spain). Despite yesterday’s blowout on CDS in Greece and Portugal, Eur/Usd continued to gain ground.

Flows: Eur and Eur/Jpy could be weighed by huge France’s 25th OATs (French Govt Bonds), with coupons of 14.66Bn, with redemptions 18.44Bn in Eur. Hearsay JPY repatriation in Eur/Usd, Eur/Jpy, Usd/Jpy. Look out for strategic levels:

1. Eur/Jpy. Look out for stops below 125.
2. Eur/Usd stops between 1.3280 to 1.3200

Intraday Strategy (Hourly):

A contrarian. Although the general sentiment tells me to short, I would remain to be a Buyer on Dips. Like to long @ 1.3350ish with a 30pips stop on Eur/Usd. 1st Target @ 1.3440. 2nd Target @ 1.3510. Look out for Technical Support at 1.3362 and 1.3325. Technical Resistance is seen at 1.3450 and 1.3520.

Gbp

Today’s books seems thin on cable.Cable is concerned with the uncertainty in the coming elections. As there will be light data in this session, would prefer some indications from the Eur to trade the cable.

Intraday Strategy (Hourly):

At this very moment (1630GMT), I would prefer to short @ 1.5442 with a 30pips stop @ 1.5472, with a target @ 1.5405. May continue to look for buying opportunities after the first target has been reached. Look out for Technical Support at 1.5398 and 1.5347. Technical Resistance is seen at 1.5502 to 1.5521.

Jpy

Some Jap names are repatriating real money to JPY from Eur/Jpy below 125, Usd/Jpy between 93.50 to 93, and Eur/Usd between 1.3280 to 1.32. Look out for Aud/Jpy @ 86.00 as well, where it will be defended. I would be expecting JPY to continue strengthen well in Asia.

Intraday Strategy (Hourly):

I’d like to look at Eur/Jpy with an interest to short between 125.70 to 125.50; given the volatility in this pair a realistic stop at 125.9 level seems appropriate to defend this position. My profit target would be to look at 124.34. No views on Gbp/Jpy.