Wakeup Call: Risk Off As CIT Files For Bankruptcy

Daily Forex Fundamentals | Written by Saxo Bank | Nov 02 09 07:50 GMT |

CIT filed for bankruptcy, despite government bail-out. Also watch out for earnings from Ford today Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment US 15:00 ISM Manufacturing (OCT) 53.0 52.6 US 15:00 Pending Home Sales MoM (SEP) 0.0% 6.4% US 15:00 Construction Spending MoM (SEP) -0.2% 0.8% What's going on? A real whipsaw in markets Thursday/Friday. Our take: The market isn't too impressed by the US GDP figures on Thursday. They looked good on the surface, but showed discomforting details on closer scrutiny: Disposable Income is down and the impact from CFC is temporary. Government spending was again going through the roof. All in all: unsustainable and not showing a real recovery. CIT filed for bankruptcy, despite government bail-out. Our stance is now a sell on rallies and we skip the 1121 target. Look for 50/55 DMA to cap the upside today and the days to come. FX FX Daily stance Comment EURUSD 0 Break abv 1.4775-80 lvl would target 1.4825. Else we stick to 1.4680-1.4780 range. USDJPY 0/- Seen capped at 90.25-30 lvl. Sell there for 89.40, stop abv 90.85. EURJPY 0/- May struggle past 133.50-60. Sell there for revisit to 132.0, stop abv 134.10. GBPUSD 0 Break abv 1.6485 risks 1.6520-25 but capped there for retracement back to 1.6460. AUDUSD 0/+ Likely drifting higher to 0.9075-80 res. Capped there ahead of RBA mtg tom. Suppt now 0.8975. Equities Equities Daily stance Comment DAX 0/- Sell on rallies towards 5347 and target 5288. Stop above 5374. FTSE100 0/- Sell on rallies towards 5014 and target 4965. Stop above 5038. S&P500 0/- Sell on rallies towards 1047 and target 1034. Stop above 1053. Nasdaq100 0/- DJIA 0/- Futures Commodities Daily Stance Comment Gold 0 Neutral. Silver 0/- Sell on rallies towards 16.68 and target 16.46. Stop above 16.80. Crude Oil 0/- Sell at the break of 76.50 and target 74.50. Stop above 77.50. FX Options FX-Options Comment EURGBP/GBPUSD: Friday GBP vols were again paid heavily and 1y vols are now trading 1.75 vol higher from the previous Friday levels. We shall expect to see GBP moving into a bigger range and trend towards new lows against the eur. EURUSD: After the US opening vols got paid with 1m 0.6 vol higher and seems like the 1.47:1.49 range trading trading is threaten on the downside, with rr still firmly favoring EUR puts. Saxo Bank 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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