Wakeup Call: European Stock Markets Will Open 5% Lower Today

Daily Forex Fundamentals | Written by Saxo Bank | Nov 20 08 08:08 GMT |

Stocks in Europe will be hit from the negative news regarding the US economy and US carmakers which may/may not be saved by the US government. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment UK Retail Sales YoY (OCT) 09:30 1.4% 1.8% US Intial Jobless Claims (NOV) 13:30 505K 516K US Philiadelphia FED (NOV) 15:00 -35.0 -37.5 What's going on? Several of the EM sovereign fixed income CDS prices are continuing to go higher. That’s a negative sign. Our global Top100 stocks CDS index is moving higher. Also a negative sign. Focus on US carmakers and financials remain the driving themes in the US stock market. The FOMC meeting minutes yesterday was very gloomy reading. The recession in the US is going the worst in 50 years. FX FX Daily stance Comment EURUSD - Good reversal pattern. Resistance now 1.2570. Looking for 1.2330 test now. EURJPY - 120.00 is basic resistance and 121.10 final resistance. To test 113.65 soon? USDJPY 0/- Low beta play on JPY strength. Resistance 96.00/20. Break of 94.50 next focus. GBPUSD - Pattern reversal – looking for follow through below 1.4900 for 1.4560 test AUDUSD - RBA – please go away. If 0.6330 falls convincingly, could test toward 0.6000 Equities Equities Daily stance Comment DAX - Sell. Target 4145. S/L at 4295. FTSE - - S&P500 - Sell. Target 775. S/L at 807. Nasdaq100 - Nikkei225 - Futures Commodities Daily Stance Comment Gold (XAUUSD) - Sell at the 746-level. Target 733. S/L at 755. Silver (XAGUSD) - - Oil (WBSZ8) - Sell at the 52.94-level. Target 51. S/L at 53.51. Analysis Disclosure & Disclaimer Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Saxo Bank utilizes financial information providers and information from such providers may form the basis for an analysis. Saxo Bank accepts no responsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in Saxo Bank's analysis derive from objective fundamental macro economical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations to buy or sell a specific financial instrument, such recommendation should be seen as Saxo Bank's opinion that the specific instrument will respectively outperform the relevant market or underperform compared to the market. Saxo Bank's recommendations should statistically correspond to an even distribution between buy and sell recommendations. The recommendations may expire promptly due to market volatility and in general, Saxo Bank does not anticipate its recommendations to be valid more than one month. An analysis will be updated if and only if a market development or other issues relevant to the analysis render a new analysis on the same topic relevant. Saxo Bank's analysis does not cover any specific financial product over time but only products which Saxo Bank's strategy team finds it important to cover at any given point in time. In order to prevent conflicts of interest, Saxo Bank has established appropriate business procedures, incl. procedures applicable to research and analysis to ensure objective research reports. Saxo Bank's research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. Saxo Bank is under supervision by the Danish Financial Supervisory Authority. Saxo Bank does not engage in corporate finance activities and accordingly, Saxo Bank's employees, incl. the persons responsible for an analysis, do not receive remuneration associated with investment banking transactions.