The expected AIG loss of 60 bln. USD for Q4 and the planned Nomura raise of capital through equity markets will hit banks throughout Europe today
|Economic Data Releases|
|EC||Industrial New Orders YoY (DEC)||10:00||-21.7%||-26.2%|
|US||S&P/CaseShiller Composite-20 YoY (DEC)||14:00||-18.30%||-18.18%|
What's going on?
Banks are under pressure and will be today's losers in the stock market. Current fear is that the major banks of the world needs to nationalized in order to save them. AIG is going to post a 2008-loss at 60 bln. USD. Nomura is going to sell for 3 bln. USD of equity to bolster their balance sheet.
Central Europe's battered currencies rallied on Monday after four of the region's central banks (Poland, Hungary, Czech Republic, Romania) issued co-ordinated statements calling recent currency weakness unjustified. We still recommend short positions in any of the above mentioned currencies.
|EURUSD||0||While holding below 1.2745-50 risks re-test of 1.2640. Else we target 1.2850.|
|EURJPY||+||Buy dips to 120.60 support for push above o/n highs at 122.0.|
|USDJPY||+||Support at 94.85-00 expected to hold for rally through 95.75, target 97.40.|
|GBPUSD||+||Above 1.4660 sees 1.4750-70 target area. Risk of retracement down to sub-1.4450 first.|
|AUDUSD||+||Buy dips to 0.6425 for a re-test 0.6550 and higher.|
|DAX||-||Sell at the break of 3900 targeting 3813 initially, 3743 finally. S/L at 4000.|
|FTSE||-||Sell at the break of 3830 targeting 3665. S/L at 3957.|
|Gold (XAUUSD)||0||Retreat from 1,000 continues on p/t. Slippage to 975-980 expected|
|Silver (XAGUSD)||0||Potential double-top at 14.60 contains upside for now. Ranging 14.20-14.60|
|Oil (CLJ9)||0/-||Aiming for 37.10 support while 41.50 caps|
|EURUSD||Vols were pushed higher at the opening as many were caught short gamma after the move on Friday. Risk reversals moved closer to par and should range around 1.27.|
|USDCHF||Vols traded higher with interests looking to buy USD puts but good part of the interests was likely just to get some options on the book so likely to range with slight bias lower.|
|USDJPY||Vols are much higher from last week with plenty of interests looking for upside 96-97s and skew is coming off steadily so spot is likely to move higher.|
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