Wakeup Call: Geithners Proposed 'New Rules' Of The Banking Game Will Hit Financials In Today's Trading

Daily Forex Fundamentals | Written by Saxo Bank | Mar 27 09 08:31 GMT |

Geithner's proposed changes on new regulation for the banking industry will put banks' profit under pressure. Capital reserve requirement will be higher. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment UK 09:30 GDP YoY (4Q) -1.9% -1.9% EC 10:00 Industrial New Orders YoY (JAN) -28.4% -22.3% US 14:00 University of M. confidence (MAR) 56.8 56.6 What's going on? The proposed changes by Secretary Geithner yesterday on regulating the financial industry will put banks profits under pressure as they will be forced to hold more reserve capital. Financial institutions that due to their size could posses a systemic risk will face the heaviest demands. Japan is now experiencing deflation. CPI YoY (FEB) was released yesterday at -0.1%. Russian banks are in trouble due to the amount of bad loans surges. Potentially 20% of the loans in Russia are at risk of defaulting within this year. The Russian Government is expected to step in with aid. FX FX Daily stance Comment EURUSD 0 Neutral. Ranging and risk/reward not convincing EURJPY - A retracement likely after sustained gains. Sell around 133 with a stop above 134 and target 131. USDJPY - Sell on rallies with a stop above 98.30. Target 97.50. GBPUSD 0/+ Could be supported by stock strength. Buy on dips with a stop below 1.4350 and target +1.46. EURNOK - Sell on rallies towards 8.80 and target 8.75. Keep a stop above 8.8150. Equities Equities Daily stance Comment DAX 0/+ Buy at the break of 4268 targeting 4330 initially, 4429 finally. S/L at 4200. FTSE 0/+ Buy at the break of 4000 targeting 4125. S/L at 3938. S&P500 0/+ Buy on dips. Target 840. S/L below 814. Nasdaq100 0/+ Nikkei225 0/+ Futures Commodities Daily Stance Comment Gold(XAUUSD) 0/- Sell at the break of 930 targeting 917. S/L at 938. Be careful - Close to trendline support. Silver(XAGUSD) 0/- Sell at the break of 13.47 targeting 13.14. S/L at 13.58. Oil (CLK9) + Buy at the break of 54.75 targeting 57. S/L at 53.75. FX Options FX-Options Comment EURUSD Despite the dump in spot down to 1.3500, implied vols are holding up quite well, Suggesting a likely move higher in spot in the days ahead. AUDUSD AUD Vols are softer today with the currency unable to breach 7100 for the time being. Spot should continue to trade sideways with a bias higher into next week. USDJPY Vols have been sold off in the front end suggesting very congested spot order boards. Overall, look for spot to trade lower into next week then higher into Easter. 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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