Wakeup Call: Equities Retracing A Bit After Yesterdays Drop

Daily Forex Fundamentals | Written by Saxo Bank | Mar 03 09 08:15 GMT |

Equities are most likely to retrace a bit in today's European session after yesterdays significant drop. However we still believe that we will go lower from here. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment CA Bank of Canada Rate (Mar) 14:00 0.5% 1.0% US Pending Home Sales Mom (JAN) 15:00 -3.5% 6.3% US Geithner testifies to House Panel on Budget 17:30 - - What's going on? Stocks dropping heavily in an ugly US close, generally down 4%. S&P500 briefly below 700. Hedge Funds still seeing redemptions. Our estimates show that they are still long EM stocks. Get out. Especially of EE. Or better yet, get short. Data is still horrible. US Construction Spending is continuing to contract, down 18% from the top in 2006. Today's US Vehicle Sales will offer no hope for the car industry. Oil was down by 10% yesterday. Iran's Oil minister is begging OPEC to stick to a cut in production. They won't and oil will continue lower. FX FX Daily stance Comment EURUSD 0/- Squeeze in Asia looks capped at 1.2675. Prefer shorts for re-test of 1.2525-30 else buy break abv. EURJPY 0/+ 122.0 near-term support for rebound through 124.0 for 124.60. USDJPY 0/+ 96.90-97.00 support holding well for retracement to 98.0. Above sees 98.85-00 in sights again. GBPUSD 0/+ As we stay above 1.40, pair risks retracement back to 1.4200-15 and 1.4250 behind. AUDUSD 0/+ Tentative gains above 0.64 need to extend beyond 0.6435-50 for 0.65+. Otherwise 0.6350 again Equities Equities Daily stance Comment DAX 0/- Sell at the 3779-level targeting 3686. S/L at 3822. FTSE 0/- Sell at the 3723-level targeting 3623. S/L at 3761 S&P500 0/- Nasdaq100 0/- Nikkei225 0/- Futures Commodities Daily Stance Comment Gold (XAUUSD) 0/+ Buy on dips towards 922 with a very close stop. Target 940. Silver (XAGUSD) - Sell at the break of 12.72. Target 12.30. Stop at 12.90. Oil (CLJ9) - Sell at rallies towards 41.60. Stop above 42.90. Target 38.50. FX Options FX-Options Comment EURUSD Medium/long term downside interests seen in the market suggesting that spot will head lower at some point but fron end seeing European names selling EUR puts. GBPUSD Vols trading higher and RR turning more towards puts again suggesting a break from the 1.40 level could be close. EURSEK Front end vols got paid up along with higher spot. Interests were mainly upside buyers and risk reversals are now favouring EUR calls so expect to see higher spot. 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. 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