The FOMC minutes showed that they are forecasting 9.5% unemployment rate in 2010. The yield curve shifted lower and by that action it was revealed that monetary policy will remain lax in all of 2010.
What's going on?
· Yesterday’s GDP data was basically in line with expectations and the Conference Board Consumer Confidence was better than expected. The FOMC minutes unfortunately showed that the most important economic institution in the world is confused and in completely uncharted territory. E.g. they are forecasting 9.5% unemployment rate in 2010?!? The yield curve immediately shifted lower, since everybody knows that is not going to happen. In other words, the Fed has revealed that monetary policy will remain lax in all of 2010.
· Another data-heavy day: The USD will edge lower and risk (stocks, HY, AUD etc.) will edge higher.
Calendar
Economic Data Releases
|
|
Country
| Time (GMT)
| Name
| Expectation
| Prior
| Comment
|
US
| 13:30
| Personal Income/Spending MoM (OCT)
| 0.1% / 0.5%
| 0.0% / -0.5%
|
|
US
| 13:30
| Durable Goods Orders MoM (OCT)
| 0.5%
| 1.4%
| Saxo Bank: 0.3%
|
US
| 15:00
| New Home Sales MoM (OCT)
| 0.4%
| -3.6%
| Saxo Bank: -1.5%
|
FX
FX
| Daily stance
| Comment
|
EURUSD
| 0/+
| Buy dips to 1.4955, or break of 1.5015, for a test of 1.5060. Stop below 1.4910.
|
USDJPY
| 0/-
| Sell rallies to 88.50-60 res area for a push through 88.0 targeting 2009 low of 87.15.
|
EURJPY
| 0
| Expect consolidation within a 132.0 -133.0 band.
|
GBPUSD
| 0/+
| Break abv 1.6620 suggests 1.6675 next target but seen capped there for return to 1.6585-95.
|
AUDUSD
| 0/-
| May have seen temp top at 0.9262. Retracement can extend to 0.9220 before rebound higher.
|
FX Options
FX-Options
| Comment
|
EURUSD
| Vols have slipped with plenty of sellers for strikes 7 Jan and under. As spot revisits the
|
| 1.50 area, expect more offers keeping spot capped.
|
USDJPY
| Seeing a few buyers of short date low delta downside this morning with the move in spot
|
| lower. 8800 level remains key and gamma being at such low levels remains good value.
|
AUDUSD
| Front end remains soft all day in Asia. 1m traded down to 14.2 and spot has settled in
|
| a range around 9250 level. Few buyers of upside 9300-9400 strikes for 3w-1m area.
|
Equities
Equities
| Daily stance
| Comment
|
DAX
| 0/+
| Buy on dips towards 5748 targeting 5784. S/L below 5731.
|
FTSE
| 0/+
| Buy on dips towards 5311 targeting 5344. S/L below 5295.
|
S&P500
| 0/+
| Buy on dips towards 1102 targeting 1110. S/L below 1099.
|
NASDAQ100
| 0/+
|
|
DJIA
| 0/+
|
|
Futures
Commodities
| Daily Stance
| Comment
|
Gold
| 0/+
| Buy on dips towards 1175 and target 1185. Stop below 1170.
|
Silver
| 0/+
| Buy around 18.75 and target 18.95. Stop below 18.66.
|
Oil (CLZ9)
| 0/+
| Buy on dips towards 76.10 and target 78. Stop below 75.20
|
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