Weekly Markets Update

11 avril 2010 [WEEKLY MARKETS UPDATE]
Weekly Markets Update
1 Daily Markets Update| SFM Finanz , S. Optyker, C. Guizelli +41.21.566.16.22 Mob: +41.79.202.19.58 & +41 79.673.64.61
Fundamental Outlook:
Last week marker summary:

It has been another relatively quiet week of trading, with little economic data or corporate news to provide fuel for the next big move in
markets. Volumes moved back into line with three-month moving averages as traders returned from the holiday weekend basking in the
afterglow of data showing jobs growth released by the US government as markets were closed last Friday. A spate of risk aversion weighed
down markets mid week, as yet another round of uncertainty over Greece's finances drove investors to take shelter in Treasuries, the dollar
and gold. Despite the trouble in Europe, there was no shortage of positive news to buoy sentiment: the March ISM non-manufacturing index hit
its highest level since May 2006 on Monday, while the new orders sub-index hit its highest level since August 2005. Strong March same-stores
sales figures and excellent y/y comps for February Nevada casino revenue shed a positive light on consumer sentiment. The upward
momentum in crude has been checked, with the contract bumping up against the $86 handle after a two-month rally up from around $71. Gold
made fresh YTD highs briefly thanks to the Greece situation and ended the week at around $1,161. Hawks and doves on the FOMC continued to
illustrate the state of the exit strategy at the Fed. On Wednesday , chief dissenter Hoenig said rates at 1% could still be considered "highly
accommodative,"while later in the week Tarullo and Lacker took a more dovish stance, with Lacker insisting that rate increases are still "over
the horizon." In Washington, Former Fed Chairman Alan Greenspan made a spectacle of himself before Congress, deflecting all blame for the
economic crisis and claiming that he was right "70% of the time" during his stewardship of the US economy. For the week stocks posted
modest gains: the Nasdaq rose 2.2%, the S&P500 climbed 1.4%, and : the DJIA added 0.7%, briefly hitting 11,000 for the first time since Sept
2008 just before the close on Friday.
The US benchmark rate began the week testing 4% for only the second time since the 2008 financial crisis. Treasury markets were keying off
of last Friday's improved March jobs report and Monday's ISM manufacturing reading. Traders were also leery of $74B in coupon supply that
was set to come onto the market throughout the middle of the week. Wednesday's $21B 10-year note reopening put any supply concerns to
bed after garnering a 3.72 bid-to-cover ratio and drawing 3.9%, which was roughly 7 basis points below where the when issued yield had been
trading just that morning. Although Thursday's long bond reopening acceptance fell short of the 10-year's, markets have taken notice of the
strong influx in demand surrounding the key 4% level in the benchmark rate. The 10-yr/2-yr spread remains above 280 basis points, still right
near all time highs, but for the week prices look to finish higher than where they entered.
In currency trading the greenback began the week on a firmer note in thin holiday trading as dealers focused on a Fed Discount Rate meeting
on Monday while rumors made the rounds that the Fed might again raise the discount rate at the confab. In Europe, reports that Greek officials
could be looking to renegotiate the standby financing aid package offered by the EU and IMF sparked fresh risk aversion. Various official
comments sought to downplay the reports; a senior Greek official clarified that Greece was not trying to push the IMF out of the picture (as had
been rumored) but did concede that Greece was seeking more "clarity" on the IMF package. Tension in Europe was illustrated by the spread
between Greek and German 10-year bonds widened out to test 450bps by Thursday, the widest spread since the euro was launched in 1999.
Dealers commented that buyers of Greece's looming USD-denominated 10-year bond issue might demand a yield of as much as 7.25%. Greece
Fin Min Papaconstantinou commented that it would take time for Greek spreads to narrow and stated that the 2009 Greek deficit to GDP might
be revised higher by Eurostat from 12.9%. All the turmoil was fuel for a softer euro, although a sense of calm enveloped the market by Friday
morning, after the Greece finance ministry stated that its Q1 budget deficit was down 40% y/y at €4.3B and the country was on track to meet
its 2010 deficit target of 8.7%. Fitch downgraded Greece's sovereign ratings by two notches later on Friday, although the move did not upset
the euro's slight strengthening and lower spreads on Greek debt. Tentative details of the aid package leaked on Friday as a report emerged
that EU ministers could make a formal statement on Greek aid next Friday and may charge Greece in excess of 6% for emergency loans.
The BoE and ECB maintained rates at existing levels as expected on Thursday. The ECB press conference was centered on the peripheral debt
situation. Trichet commented that a Greek default was "not an issue" under the current information. EUR/USD maintained a foothold above
the 1.33 area. In the UK, Prime Minister Brown formally asked Queen Elizabeth to dissolve the Parliament and set an election date for May 6th.
US Treasury Secretary Geithner apparently chose diplomacy over political pressure to coax China into changing its FX policies. In order to
avert a potential diplomatic gaffe, Geithner delayed publication of the semi-annual currency report to Congress due on April 15 until after a
mid-month state visit by Chinese President Hu Jintao. Later in the week, Geithner made a surprise visit to Beijing for closed-door
meetings with Vice Premier Wang to present the US case for revaluation of the renminbi.
In China, rhetoric regarding yuan revaluation remained divided. China's Foreign Minister reiterated that yuan appreciation would not be a
viable solution to rebalancing US-China trade and denied charges that China manipulates its currency for advantage in trading. A Chinese
government economist stated that the country could return to a modest yuan appreciation policy and that a widening of the yuan trading band
was possible. On the monetary front, one of the newly appointed central bank advisors, Li Daokui, warned the PBoC could consider raising
interest rates as early as the current quarter if the rate of inflation exceeds 3%. Li also noted the PBoC would move unilaterally and without
rate change by the US. As the currency issue heated up, there was also press speculation that China was close to announcing a revision of its
currency policy with possible action similar to China's currency shift in policy back in 2005.
Central banks across the Asia Pacific rim rendered rate decisions this week. The Reserve Bank of Australia raised its cash target rate for the
fifth time in six meetings, shrugging off the recent deterioration in monthly trade, retail sales and dwelling approvals data. The accompanying
statement was on balance more hawkish, containing a specific mention of economic recovery "contributing to pressure on prices for raw
materials." Going forward, RBA said the buildup in investment the resources would lead to even higher pace of growth, even considering the
diminishing effects of fiscal stimulus. Moreover, the RBA downgraded its assessment on sovereign risk, suggesting sovereign concerns "have
been contained" (revised from "remain elevated"). The Australian dollar extended its gains following the RBA statement, approaching 0.93
handle for the first time in nearly three months.
This week's Bank of Korea rate decision - the first under the leadership of new Governor Kim - also took a more hawkish turn, weighing on
Korean equity and bond markets in the Friday trading session. The BoK left rates unchanged at 2.00%, as widely expected, and reiterated the
need to maintain easy policy for the time being but also pointed out risks of higher inflation in months to come. Governor Kim said
considerable upward pressure exists for the second half of the year and noted faster than previously expected growth in domestic economy.
With little political pressure for further easing from the Bank of Japan following last month's expansion of the 3-month lending program, the
BOJ maintained its economic assessment and kept rates ultralow at 0.1% with monthly JGB buying at ¥1.8T. The accompanying statement
reiterated that economic activity is picking up but growth is expected to be gradual, reaffirming commitment to easy monetary conditions
because of persisting downside risks to the economy.
The Week Ahead

Trading the potential jump in risk appetite
The 1Q earnings season kicks off next week and if the last reporting season is any indication, it should have significant implications for risk
appetite. 4Q earnings were viewed as constructive for the markets as they showed the first semblance of organic growth. In other words, all of
the earnings were not based on cost cutting alone but also a smart pickup in top-line activity. While cost cutting did dominate and helped
overall earnings beat expectations by more than 5% in 4Q, sales figures also impressed to the upside by nearly 2%.
We expect this pattern of organic growth to continue and show through in the 1Q reports. Estimates for overall earnings growth currently rest
around 30% from a year ago. To be fair, very low comparable levels from last year make reaching this threshold quite easy. However, the
evidence of late (especially from the retail space) suggests we could surpass these estimates in a big way. Should this come to fruition, there
are a couple of plays in the currency space that should do quite well.
In this vein, we like to look at the inter-market correlations and what has done well in tandem with equities this year thus far. The currency
pairs best correlated with US equities in 2010 thus far have been – perhaps unsurprisingly – USD/CAD and AUD/USD. The former has seen a
whopping -95% correlation while the latter has moved in concert with stocks 90% of the time this year. Should we see a similar rally in
equities that we got in 1Q (roughly 7%) this would pin the S&P 500 near 1275. While not our base case, it is important to note that given the
2010 relationship this would place USD/CAD near 0.9530 and AUD/USD around the 0.9800 area by the end of June.
The better tone to earnings would also do well to nudge economic optimism higher. This coupled with what is likely to be a slow but steady
improvement in US economic data should help yields trend higher. We witnessed this past week the US 10-year flirting with the 4.0% area only
to be rejected on what was a very constructive auction later in the week (positive for bond prices, negative for yields). We think this was only
the beginning stages of what will be a gradual move higher, however.
In terms of playing this via the currency markets, USD/JPY stands out. The pair has seen an impressive 93% correlation with 10-year yields in
2010. The next major area of resistance once we clear the 4.0% hurdle is 4.3% and a move up there would translate with a USD/JPY trading
near the 100 zone. Food for thought!
Greece needs budget reform to win back confidence
Speculation that the EU may step in with a bail-out for Greece over the weekend provided a boost for the EUR ahead of the close of the
European business week. Comments from EU President Van Rompuy that the EU stands ready to intervene on Greece and remarks from the
European Commission that the interest rate that Greece would be charged would be worked out in due course suggested that the authorities
are working out the detail on how last month’s EU support mechanism could be tailored to meet the needs of the Greek government. Without
doubt time is running out for Greece. While the Debt Agency has met its April funding requirement, there is a need to raise EUR11.6 bln in May
and EUR 32 bln through the rest of the year.
While Greek bond yields have retreated from their highs, the government cannot issue at current levels and simultaneously hope to slash its
budget deficit to 3% of GDP by the end of 2012. While emergency funding from the EU or the IMF may provide some temporary relief to the
Greece funding crisis, it cannot heal the budget deficit. Years of fiscal mismanagement, a culture of low collection of taxes and inaccurate
statistics has left the market sceptical of the ability of Greece to embrace severe economic reform. As a consequence the EUR saw little initial
reaction to the announcement by the Greek government that the Q1 budget deficit has declined by 39.2% to EUR4.3 bln. The EUR may see
relief in the near-term if Greece funding crisis is offered a reprieve. However, the market will need to see concrete proof that Greece is
implementing budget reform before it takes Greece off the watch list. The EUR thus remains vulnerable.
UK politics/economics may be turning favorable for GBP
UK political opinion polls have not been consistent, but over the past week the Tory opposition party has found additional support. A
commitment by the Conservatives that they would not raise national insurance (tax on wages) has been met with approval by the electorate
and their decision to clarify how they would make GBP 12 bln in efficiency savings has been met with relief in the markets. The Tory party’s
promises to tackle the budget deficit have made it the more market friendly political party. However, its previous lack of detail on budget
reform combined with fears that too much austerity too soon could lead to a double dip recession have been undermining support. Fears of a
double dip recession were further pushed into the background on the release stronger than expected manufacturing production data and on
the indication from the NIESR that the economic recovery continued in Q1 in spite of prolonged wintry weather. If the Tory party pull a victory
out of the hat on the May 6 election day EUR/GBP would likely move a notch lower. This outcome would also strengthen the likelihood that
cable has already seen the lows of the year.
EURUSD
The Technical out look for the EUR/USD Sunday, April the 11th, 2010, level 1.3497
Last week the EUR/USD has been projected to slide between 1.3111/47 but failed to fall below the previous low at 1.3267. As I alerted in my
last Friday commentary: With daily chart indicators showing bullish divergences on RSI and Stochastic indicators and a risk of a double bottom
pattern(B1,B2) the fall from 1.3590 has possibly completed at 1.3282 already. Rise from 1.3282 is possibly developing into the third wave
consolidation that started at 1.3267, perhaps in a flat (3-3-5). Intraday bias have flipped back to the upside for 1.3530/50 areas and may bring
some tuff resistances to break, but a firm move above 1.3590 and confirm by a break of 1.3630/40, will indicate that the five wave sequence
from 1.5143 is completed at 1.3267 and stronger rebound should then be seen to 1.3815 and above. Remember however that the market is in
an established bearish mode, so stalk this current rally as a correction. On the down side, though, below 1.3364 will put focus back to 1.3266
and decisive break there will confirm that medium term fall from 1.5143 has resumed for an objective between 1.3111/47, the 61.8%
projection of 1.4578 to 1.3443 from 1.3815 at 1.3111 or the 150.0% projection of 1.5143 to 1.4217 from 1.4578 at 1.3147.
Furthermore in an Elliott Wave point of view, in the bigger picture, the EUR/USD's fall from 1.5143 has possibly completed the five wave
impulsive sequence already (1.4217, 1.4578, 1.3443, 1.3817, 1.3266) on bullish convergence conditions in daily on RSI and AC oscillators.
Some lengthier consolidation would now be seen with risk of stronger rebound. Nevertheless, we'd expect upside to be limited by 1.4217
cluster resistance (50% retracement of 1.5143 to 1.3266 at 1.4205) and bring fall resumption. The overall bearish outlook remains
unchanged. Technically the EURO IS IN A BEAR TREND as far that 1.4217 is not broken up
In the long term picture, long term up trend from 2000 low of 0.8223 has made an important top at 1.6039 in 2008. Subsequent price actions
are so far viewed as a correction only, in form of three waves. First wave has completed at 1.2329 while secondly should have completed at
1.5143. Fall from 1.5143, as the third wave of correction, is in progress and should extend to 1.1639 supports, and possibly further to 100%
projection of 1.6039 to 1.2329 from 1.5143. Nevertheless, we'd expect strong support from 61.8% retracement of 0.8223 to 1.6039 at 1.1209
to conclude the correction and bring another long term up trend.
USD/CHF:
The technical outlook for USD/CHF Sunday, April the 11th, 2010, level 1.0656
The USD/CHF's rebound from 1.0434 extended further to as high as 1.0785 last week and the break of 1.0750 cluster point may suggest that
correction from 1.0897 has completed with three waves down to 1.0435 already. But at this point 2 scenarios are possible:
1) The corrective structure in turn argues that rises from 0.9916 is still in progress. Though, with RSI oscillator showing bearish bias,
for the moment, but Stochastic oscillator still in up move, imply that initial bias is neutral and we may see some retreat first.
Downside should be contained by the lower band of the ascending channel, green line on the chart, now at 1.0621 or the 1.0582
support and bring rally resumption and above 1.0785, with a close over the key resistance at 1.0809, will target a retest on 1.0897
resistance and on a breach of this last level will pave the way to 61.8% projection of 0.10131to 1.0898 from 1.0506 at 1.0911 next.
2) First, I don’t like the fact that we have pass through the 1.0750 cluster point and close below. Secondly, the USD/CHF had tested the
upper band of the long descending channel from 1.2296 now at 1.0783 and had been rejected by this resistance and doesn’t pass
trough. Third, the wave structure: the move from 1.0506 to 1.0750 (A) and from 1.0750 to 1.0435 (B) is perhaps a flat correction (3-
3-5) and the current move down from 1.0785 is the beginning of the C wave of the correction from 1.0897. If the market passes
through 1.0621 and 1.0582 then USD/CHF will target 1.0547 support and would revive our bearishness for retest of 1.0506 minor
support first and a break of 1.0434 will invalidate the first scenario and turn outlook mixed.
Furthermore in an Elliott wave point of view, the bigger picture, we still favor the first scenario, while the pull back from 1.0897 was deeper
than expected, the three waves corrective structure reaffirmed the view that rise from 0.9916 is still in progress. Break of 1.0897 will confirm
this case and also have USD/CHF sustain above the upper band and of the long descending channel from 1.2296 now at 1.0783, green line on
the chart. This will in turn affirm the case that correction from 1.2296 has completed with three waves down to 0.9916 and will pave the wave
for another high above 1.2296. On the downside, though, break of 1.0434 will invalidate this view and turn outlook mixed.
EUR/CHF:
The technical outlook for EUR/CHF Sunday, April the 11th, 2010, level 1.4385
The awakening of the sleeping beauty, the prince is back! The EUR/CHF stayed in a very tight range last week but Friday's rise argues that
rebound from 1.4143 is resuming. Initial bias is mildly on the upside this week for further rebound. But after all, we'd expect the 38.2%
Fibonacci retracement from 1.4143 to 1.4846 at 1.4461 or the strong resistance near 1.4557 to limit upside. While the consolidation might
continue for a while, we'd expect down trend to resume sooner or later. Below 1.4310 minor support will turn bias to the downside for
retesting 1.4143 low first. Break of 1.4143 will target 1.4 psychological level first and target 1.3869 next
Furthermore in an Elliott wave point of view, the long term picture, the current decline in EUR/CHF should be resuming larger term down
trend from 1.6827. Sustained trading below 1.4135 (2008 low) has confirm this case and we are heading to the61.8% projection of 1.6368 to
1.4315 from 1.5138 at 1.3869. On the upside, break of 1.4557spike resistance is needed to be first signal of bottoming. Otherwise, outlook will
remain bearish.
In the long term picture, fall from 1.6827 should be resuming whole down trend from 1993 high of 1.8234. We'd expect such down trend to
extend towards 100% projection of 1.8234 to 1.4391 from 1.6827 at 1.2984 in the longer run.
GBP/USD:
The technical outlook for GBP/USD Sunday, April the 11th, 2010, level 1.5376
GBP/USD's rebound from 1.4798 extended further to as last week and further rise cannot be ruled out. However, we continue to expect upside
to be limited by 38.2% retracement of 1.6456 to 1.4783 at 1.5422 to conclude the rise from 1.4798 as well as the three wave consolidation
from 1.4783 and bring down trend resumption. Below 1.5151 minor support will flip intraday bias back to the downside for retesting 1.5042
minor support first and will target 1.4783 low. A break o this last level will confirm that whole decline from 1.6456 has resumed for 1.4364/37
(200% projection of 1.6875 to 1.5829 from 1.6456 at 1.4364 or 61.8% projection from 1.6456 to 1.4783 from 1.5381 at 1.4337and 76.4%
retracement from 1.3500 to 1.6875 at 1.4337). On the upside, note that decisive break of 1.5422 Fibonacci level will suggest that stronger
rebound is underway for 1.5616 first and for 1.5815 cluster resistance next.
Furthermore in an Elliott wave point of view, the bigger picture, there is no change, we're holding on the bearish view that medium term
rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is
tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5815
resistance is needed to invalidate this view. Otherwise, outlook will remain bearish. In the longer term picture, the corrective nature of the
multi-decade advance from 1.0463 (1985 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in
an early stage of a long term down trend. Rebound from 1.3503 should have completed and the whole fall from 2.1161 is likely resuming for
61.8% projection (2.1161 to 1.3503 from 1.7043) at 1.2310 next.
AUD/USD:
The technical outlook for AUD/USD Sunday, April the 11th, level 0.9339
The AUD/USD picked up momentum again and broken 0.9327 resistance last week. The development affirmed the view that consolidation
from 0.9404 has completed with three waves down to 0.8577 already. Initial bias remains on the upside for a test on 0.9404 high this week and
we got also a potential target at 0.9414 the 123.6% projection from 0.8577 to .09071 from 0.8800. On the downside, below 0.9264 minor
support will indicate that a temporary top is formed and turn bias neutral. But downside should be contained above 0.9124 support and bring
another rise.
Furthermore in an Elliott wave point of view, the bigger picture: The AUD/USD is still trading well inside medium term rising channel, green
line on the chart, now at 0.9298 and rise from 0.6008 should still be in progress. The break of 0.9327 resistance affirms the view that rise from
0.8577 is resuming such rally and break of 0.9404/14 will confirm. If we treat the rise from 0.8577 as the fifth wave in the rise from 0.6008
with equal length as the first wave from 0.6008 to 0.7267, upside target will be 0.9836, which is close to 2008 high of 0.9849. On the downside,
break of 0.9000 support will, however, suggests that AUD/USD's rally might have completed prematurely and would turn focus back to 0.8802
support instead.
In the longer term picture, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above
76.4% retracement of 0.4773 (01 low) to 0.9849 (08 high). Rise from 0.6008 is possibly developing into a new uptrend which will extend the
long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.7702 cluster support holds and expect an eventual
break of 0.9849 high. However, a break of 0.7702 support will firstly argue that whole rise from 0.6008 has completed. Secondly this will open
up the case that AUD/USD is in phase of a long term consolidation and will gyrate in the large range of 0.6008/0.9849 for some time.
USD/JPY
The technical outlook for USD/JPY Sunday, April the 11th, 2010, level 93.18
USD/JPY's retreat from 94.68 extended further to as low as 92.82 and did draw some support from mentioned 38.2% retracement of 89.83 to
94.68 at 92.82. However, momentum of subsequent recovery was weak and the pair weakened again. Initial bias is neutral this week and a
break below 92.82 will bring deeper fall towards 61.8% retracement of 89.83 to 94.68 at 91.68 before concluding the correction. On the
upside, a break above 93.77 will flip intraday bias back to the upside for retesting 94.68 high. Firm break there will confirm rally resumption
towards 100% projection of 84.81 to 93.74 from 88.13 at 97.06 next.
Furthermore in an Elliott wave point of view, in the bigger picture, the break of 93.78 high affirms the bullish case and that whole down trend
from 124.13 has completed at 84.81 already. Stronger rally should now be seen to 101.43/65 medium term resistance zone for confirmation.
On the downside, break of 88.13 support is needed to indicate that rebound from 84.81 is finished. Otherwise, outlook will now remain bullish.
In the long term picture, downside momentum is clearly diminishing and bullish convergence condition in weekly oscillators; the long term
down trend in USD/JPY might have reversed. Focus now turns to 101.43/65 medium term resistance zone and decisive break there will also
break the lower high lower low pattern since 124.13. This will suggest that a long term bottom is in place and another rising leg of the sideway
pattern that started at 79.75 in 1995 should then be in progress for upper side of the range at 147.68.
EUR/JPY
The technical outlook for EUR/JPY Sunday, April the 11th, 2010, level 125.77
EUR/JPY pulled back to as low as 123.41 last week but was supported well above 121.05 support and rebounded. Consolidation from 127.88
might still continue and initial bias is neutral this week. But after all, note that rise from 119.64 is still in favor to continue as long as 121.05
support holds. Above 127.88 will target 100% projection of 121.05 to 127.88 from 123.41 at 130.24 next. On the downside, note that firm
break of 121.05 will confirm that rise from 119.64 is finished and the three wave corrective structure will in turn indicate that medium term
fall is still in progress for another low below 119.64.
Furthermore in an Elliott wave point of view, the bigger picture, the strong break of 126.88 cluster resistance (38.2% retracement of 138.47 to
119.64 at 126.83) indicates that choppy fall from 139.21 has likely completed at 119.64 already. The corrective structure in turns argue that
whole rally from 2009 low of 112.10 is still in progress. Sustained trading above 134.36 resistance will further affirm this case and pave the
way to a new high above 139.21. On the downside, break of 121.05 support is needed to revive the case that EUR/JPY has topped out in
medium term at 139.21 and will pave the wave for another low below 112.10 instead.
In the long term picture, The uptrend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Fall from 169.96 should
develop into a three wave correction with first wave completed at 112.10. Second wave from 118.10 might still be in progress but after all,
we'd expect another long term fall to 118.10 and beyond after the third wave starts.
GBP/JPY
The technical outlook for GBP/JPY Sunday, April the 11th, 2010, level 143.29
GBP/JPY pulled back to as low as 140.94 last week, but was supported by the short term trend indicator, in blue on the chart, and rebounded
strongly. Nevertheless, as upside is limited below 144.71 resistance, more consolidations could still be seen in near term. Initial bias remains
neutral this week for more sideway trading and another fall cannot be ruled out. On the upside, break of 144.71 resistance will confirm that
whole rise from 132.13 has resumed and should target 61.8% projection of 134.53 to 144.71 from 140.94 at 147.23 next. On the downside, a
though, below 140.94 will indicate that correction from 144.71 is still underway.
Furthermore in an Elliott wave point of view, in the bigger picture, with the break of 143.59 cluster resistance (61.8% retracement of 150.68
to 132.13 at 143.59) has dampened the bearish view and argue that medium term fall from 164.05 is completed with three waves down to
132.13 already. The corrective structure in turn argue that whole rise from 2009 low of 118.18 is still in progress. Sustained trading above
61.8% retracement of 163.05 to 132.13 at 151.23 will affirm this case and set the stage for another high above 163.05. On the downside, break
of 134.53 support is now needed to revive that case that GBP/JPY has topped out at 163.05.
In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Note that the fall from 215.87 is not treated
as the fifth wave, but the third wave inside the third wave that started at 241.35. Another long term decline is still expected after completion of
the correction from 118.81.
USD/CAD
The technical outlook for USD/CAD Sunday, April the 11th, 2010, level 1.0024
The USD/CAD reached as low as 0.9976 last week but drew support from parity and recovery was limited by the 38.2% Fibonacci retracement
of 1.0303 to 0.9977 at 1.0100 ( high at 1.0105). Intraday bias remains neutral this week and some more consolidations would probably be
seen. But after all break of 1.0302 resistance is needed to indicate that USD/CAD has bottomed out. Otherwise, another fall would remain in
favor. Below 0.9977 will confirm down trend resumption and target the 61.8% projection of 1.0679 to 1.0062 from 1.0303 at 0.9921
Furthermore in an Elliott wave point of view, medium term decline from 1.3063 is still in progress. It's unclear whether such fall is resuming
the long term down trend from 1.6196 (2002 high) or it is a part of a consolidation pattern that started at 0.9056 (2007 low). In either case, fall
from 1.3063 is now expected to continue towards 100% projection of 1.3063 to 1.0784 from 1.1723 at 0.9444 next. On the upside, break of
1.0779 resistance is needed to be the first signal that fall from 1.3063 is finished. Otherwise, the Outlook for the USD/CAD remains bearish and
we will stay bearish as long as 1.0779 resistances held.
In the longer term picture, while long term down trend from 1.6196 (2002 high) has made an important low at 0.9056, the sustained trading
below the long trend indicator, light green line on the chart, now at 1.0271 argues that the long term trend has not reversed yet. Fall from
1.3063 is either resuming the long term down trend or is part of a sideway consolidation pattern that started at 0.9056 (2007 low). We'll stay
neutral for the moment until the fall from 1.3063 finally confirms whether it's impulsive or corrective in nature.
GOLD
The technical outlook for GOLD: Sunday, April the 11th, 2010, level 1160.6
Gold's rise from 1085.0 is still in progress and with the break of 1163 resistance had confirmed that the consolidation from 1131.5 is finished
at 1085.0 already. Now a support top may be in place at 1145.03 and bias is turned bullish. Some retreat might be seen in Gold but downside
should be contained above 1145.03 support and bring another rise. As noted before, rally from 1043.93 is still in progress and should bring
the metal to 1163 resistance again and abreak of this level will be followed by the 100% projection of 1043.93 to 1145.8 from 1085 at 1189
next.
Furthermore in an Elliott wave point of view, the bigger picture, price actions from 1227.5 are treated as correction to rise from 931.3 only, no
doubt. The lack of impulsive structure of rise from 1044.5 argues it's possibly part of consolidation from 1227.5, rather than resumption of the
long term up trend. Above 1145.8 will bring retest of 1227.5 high but upside will likely be limited there and bring at least one more fall before
the consolidation concludes. On the downside, below 1084.8 support will shift favors to the case that correction from 1227.5 is developing into
a three wave move with another low below 1044.5.
CrudeOIL
The technical outlook for OIL Sunday, April the 11th, level 84.88
Crude oil continues to struggle around mentioned target of 61.8% projection of 69.50 to 83.16 from 78.56 at 86.92 and had formed a
temporary top. Some consolidations would likely be seen for the moment with risk of pull back to the short term trend indicator now at 84.82
But break of 78.56 support is needed to indicate that crude oil has topped. Otherwise, outlook will remain bullish. Sustained trading above
86.92 will target 90 psychological level next.
Furthermore in an Elliott wave point of view, in the bigger picture, the strong break of 83.95 high confirmed that medium term rally from 33.2
has resumed. Nevertheless, there is no change in the view that it's the second wave of the whole correction that started in 2008 at 147.27.
Hence, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, below
78.56 support will be the first signal of topping and will turn focus back to 69.50 support for confirmation.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 1998 low
of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we still
prefer the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between
76.77/90.24 Fibonacci resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.
DOW JONES INDU. Future June 2010
The technical outlook for DJI: Sunday, April the 11th, 2010, level 10936.9
The Dow Jones was consolidating, last week, below the lower band of the ascending channel now at 10954.58 and we are very near to break
this last level. If the DOW broke this last level and by the way will reenter the bullish channel, green line on the chart, the DOW will reach first
10973 the 123.6% Fibonacci projection of 9789.9 to 10432.9 from 10171.4 and a clear break of this level may bring the DOW to 11135.9 or
11211.77. On the down side, the short term trend indicator in light blue on the chart now at 10838.78 may give some support and bring
resumption of the rally. On a break of this level the DOW may fall to 10726 support but 10624may hold. As far as 10600held now, I remain
bullish for the DOW but with a stop now below 10595.
Furthermore in an Elliott wave point of view, the count suggests that the bear market ended in Mar 09.The anticipated 50% retracement rally
was actually the start of a new 70-80 year super cycle bull market. The three waves up, thus far, are only Major waves 1-2-3 of Primary wave I
of Cycle wave I of this bull market. Should the current downtrend conclude with alternation with the Jun/July downtrend, and hold the 10%
correction, it will be labeled Major wave 4 with now up Major wave 5.With the break up10723: the move from 10723.4 to 9789.9 is wave 4 of I
and the current wave is wave 5 of I: because now we may count 5 waves up on this rally and we get a first target at10973 and perhaps to
11135.9. Remember that this Wave I is the start of a super bullish super cycle of 50-70 years and will be followed by a wave II in correction
that may be profound.
Economic Calendar
Monday, Apr 12, 2010
GMT Ccy Events Consensus Previous
01:30 AUD Home Loans Feb -1.0% -7.9%
01:30 AUD Investment Lending Feb -- 0.9%
01:30 AUD Value of Loans M/M Feb -- -5.0%
08:00 EUR Italian Industrial Production -0.3% 2.6%

s.a. M/M Feb
08:00 EUR Italian Industrial Production 2.8% 0.1%

w.d.a. Y/Y Feb
08:00 EUR Italian Industrial Production -1.0% -3.3%

n.s.a. Y/Y Feb
12:15 CAD Housing Starts Mar 200.0K 196.7K
14:30 CAD Business Outlook Future Sales -- 49

Q1
14:30 CAD BoC Senior Loan Officer -- -8.7

Survey Q1
18:00 USD Monthly Budget Statement -$87.5B -$191.6B

Mar
22:45 NZD NZ Card Spending M/M Mar -- -0.4%
23:01 GBP BRC Retail Sales Monitor Mar -- 4.5%
23:01 GBP RICS House Price Balance Mar 18% 17%
23:50 JPY Domestic CGPI M/M Mar 0.3% 0.1%
23:50 JPY Domestic CGPI Y/Y Mar -1.1% -1.5%
Tuesday, Apr 13, 2010
01:30 AUD NAB Business Confidence Mar -- 19
01:30 AUD NAB Business Conditions Mar -- 8
04:00 JPY Tokyo Condominium Sales -- 10.7%

Y/Y Mar
06:00 EUR German CPI M/M Mar F 0.5% 0.5%
06:00 EUR German CPI Y/Y Mar F 1.1% 1.1%
06:00 EUR German HICP M/M Mar F 0.6% 0.6%
06:00 EUR German HICP Y/Y Mar F 1.3% 1.3%
06:00 EUR German WPI M/M Mar 0.5% 0.1%
06:00 EUR German WPI Y/Y Mar 3.6% 2.1%
06:45 EUR French CPI Y/Y Mar 1.5% 1.3%
06:45 EUR French CPI M/M Mar 0.4% 0.6%
06:45 EUR French HICP M/M Mar 0.4% 0.6%
06:45 EUR French HICP Y/Y Mar 1.6% 1.4%
06:45 EUR French CPI Ex Tobacco Index 119.5 118.99

Mar
06:45 EUR French Current Account -- -3.4B

(EUR) Feb
08:30 GBP Visible Trade Balance (GBP) -7.300B -7.987B

Feb
08:30 GBP Trade Balance Non EU (GBP) -3.900B -4.834B

Feb
08:30 GBP Total Trade Balance (GBP) -3.050B -3.768B

Feb
08:30 GBP DCLG UK House Prices Y/Y -- 6.2%

Feb
11:30 USD NFIB Small Business -- 88

Optimism Mar
12:30 CAD International Merchandise 0.4B 0.8B

Trade (CAD) Feb
12:30 CAD New Housing Price Index M/M 0.5% 0.4%

Feb
12:30 USD Trade Balance Feb -$38.8B -$37.3B
12:30 USD Import Price Index M/M Mar 0.9% -0.3%
12:30 USD Import Price Index Y/Y Mar 11.7% 11.2%
14:00 USD IBD/TIPP Economic Optimism 47.8 45.4

Apr
14:45 USD Fed's Daniel Tarullo Speaks in -- --

Washington D.C.
20:30 USD API U.S. Crude Oil Inventories -- 1070K

(APR 9)
20:30 USD API U.S. Gasoline Inventories -- -2957K

(APR 9)
20:30 USD API U.S. Distillate Inventory -- 723K

(APR 9)
21:00 USD ABC Consumer Confidence -- -43

(APR 11)
22:45 NZD Retail Sales M/M Feb 0.2% 0.8%
22:45 NZD Retail Sales ex Auto M/M Feb 0.4% 0.3%
23:00 USD Fed Chairman Ben Bernanke -- --

Speaks in Washington D.C.
23:15 USD Fed's Jeffrey Lacker Speaks in -- --

Morgantown West Virginia
Wednesday, Apr 14, 2010
00:30 AUD Westpac Consumer -- 0.2%

Confidence Apr
00:30 AUD Westpac Consumer -- 117.3

Confidence Index Apr
03:00 NZD Non Resident Bond Holdings -- 64.2%

Mar
06:30 JPY BoJ Governor Masaaki -- --

Shirakawa Speaks in Tokyo
Japan
09:00 EUR Eurozone Industrial 0.1% 1.7%

Production s.a. M/M Feb
09:00 EUR Eurozone Industrial 2.8% 1.4%

Production w.d.a. Y/Y Feb
11:00 USD MBA Mortgage Applications -- -11.0%

(APR 9)
12:30 USD Advance Retail Sales Mar 1.1% 0.3%
12:30 USD Retail Sales Less Autos Mar 0.5% 0.8%
12:30 USD Retail Sales Less Auto & Gas 0.6% 0.9%
Mar
12:30 USD CPI M/M Mar 0.1% 0.0%
12:30 USD CPI Y/Y Mar 2.4% 2.1%
12:30 USD CPI Core M/M Mar 0.1% 0.1%
12:30 USD CPI Core Y/Y Mar 1.2% 1.3%
12:30 USD CPI Core Index s.a. Mar -- 220.579
12:30 USD CPI n.s.a. Mar 217.714 216.741
13:30 USD Fed's Sandra Pianalto Speaks -- --

in New York City
14:00 USD Fed Chairman Ben Bernanke -- --

Testifies in Washington D.C.
14:00 USD Business Inventories Feb 0.3% 0.0%
14:30 USD DOE U.S. Crude Oil -- 1976K

Inventories (APR 9)
14:30 USD DOE U.S. Gasoline Inventories -- -2498K

(APR 9)
14:30 USD DOE U.S. Distillate Inventory -- 1074K

(APR 9)

Morgantown West Virginia
17:00 USD Fed's Richard Fisher Speaks -- --
in New York City
18:00 USD Fed Releases Beige Book -- --

Economic Report
22:30 NZD Business NZ Performance of -- 53.3

Manufacturing Index Mar
23:00 USD Fed's Brian Sack Speaks in -- --

New York City
23:01 GBP Nationwide Consumer 81 80

Confidence Mar
23:50 JPY Japan Buying Foreign Stocks -- 50.2B

(JPY) (APR 9)
23:50 JPY Japan Buying Foreign Bonds -- 401.7B

(JPY) (APR 9)
23:50 JPY Foreign Buying Japan Stocks -- 540.4B

(JPY) (APR 9)
23:50 JPY Foreign Buying Japan Bonds -- -320.2B

(JPY) (APR 9)
Thursday, Apr 15, 2010
00:30 JPY BoJ Holds Quarterly Branch -- --

Managers' Meeting in Tokyo
01:00 AUD Consumer Inflation -- 3.2%

Expectation Apr
04:30 JPY Industrial Production M/M -- -0.9%

Feb F
04:30 JPY Industrial Production Y/Y Feb -- 31.3%

F
04:30 JPY Capacity Utilization M/M Feb -- 3.9%

F
08:00 EUR Italian Trade Balance (Total) -- -3360

(EUR) Feb
08:00 EUR Italian Trade Balance EU -- -165.0M

(EUR) Feb
08:00 EUR ECB Publishes Monthly -- --

Report
12:30 USD Empire Manufacturing Apr 24.00 22.86
12:30 USD Initial Jobless Claims (APR 440K 460K

10)
12:30 USD Continuing Claims (APR 3) 4600K 4550K
13:00 USD Net Long-term TIC Flows Feb -- $19.1B
13:00 USD Total Net TIC Flows Feb -- -$33.4B
13:15 USD Industrial Production Mar 0.7% 0.1%
13:15 USD Capacity Utilization Mar 73.3% 72.7%
14:00 USD Philadelphia Fed. Apr 20.0 18.9

Charlotte North Carolina
16:15 USD Fed's James Bullard Speaks in -- --

New York City
17:00 USD NAHB Housing Market Index 16 15

Apr
17:40 USD Fed's Dennis Lockhart Speaks -- --

in Pensacola Florida
19:00 USD Former Fed Chairman Paul -- --

Volcker Speaks in New York
City
19:15 USD Fed's Jeffrey Lacker Holds -- --

Press Briefing in Charlotte
North Carolina
22:00 NZD REINZ House Sales Y/Y Mar -- -3.8%
22:00 NZD REINZ Housing Price Index -- 0.4%

M/M Mar
22:00 NZD REINZ Housing Price Index -- 3214.8

Mar
Friday, Apr 16, 2010
-- JPY Japan Cabinet Office Economic -- --

Report
01:00 USD Fed's Janet Yellen Speaks in -- --

San Francisco California
06:00 EUR EU 25 New Car Registrations -- 3.0%

Mar
07:15 CHF Producer & Import Prices 0.4% -0.3%

M/M Mar
07:15 CHF Producer & Import Prices Y/Y -0.1% -1.0%

Mar
08:00 EUR Italian CPI (NIC incl. tobacco) 0.3% 0.3%

M/M Mar F
08:00 EUR Italian CPI (NIC incl. tobacco) 1.4% 1.4%

Y/Y Mar F
08:00 EUR Italian HICP M/M Mar F 1.5% 1.5%
08:00 EUR Italian HICP Y/Y Mar F 1.4% 1.4%
09:00 EUR Eurozone CPI M/M Mar 0.9% 0.3%
09:00 EUR Eurozone CPI Y/Y Mar 1.5% 1.5%
09:00 EUR Eurozone CPI - Core Y/Y Mar 0.9% 0.8%
09:00 EUR Eurozone Trade Balance s.a. 3.0B 1.8B

(EUR) Feb
09:00 EUR Eurozone Trade Balance -0.5B -8.9B

(EUR) Feb
09:05 EUR Italian Current Account (EUR) -- -5461

Feb
12:30 CAD Manufacturing Shipments 1.0% 2.4%

M/M Feb
12:30 CAD New Motor Vehicle Sales M/M 7.0% 0.0%

Feb
12:30 USD Housing Starts Mar 610K 575K
12:30 USD Housing Starts M/M Mar 6.1% -5.9%
12:30 USD Building Permits Mar 625K 612K
12:30 USD Building Permits M/M Mar -1.9% -1.6%
13:00 USD Fed's Kevin Warsh Speaks in -- --

New York City
13:55 USD U. of Michigan Confidence Apr 75.0 73.6

P
17:00 USD Fed's Thomas Hoenig Speaks -- --

in New York City
The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject
Currencies, Futures, Commodities & Securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific
recommendations or views contained in this research report. In addition, said analyst has not received
compensation from any subject company in the last 12 months.
Investors should consider this report as only a single factor in making their investment decision.
International securities involve additional risks such as currency fluctuations, differing financial accounting standards, and
possible political and economic instability. These risks are greater in emerging markets.
Small-cap stocks generally involve greater risks. Dividends are not guaranteed and will fluctuate. Past performance may
not be indicative of future results.
.
Investors should consider the investment objectives, risks, and charges and expenses of mutual funds carefully
before investing. The prospectus contains this and other information about mutual funds. The prospectus is
available from your financial advisor and should be read carefully before investing.
For clients in the United Kingdom:
For clients of SFM Finanz.

This report is for distribution only to persons who fall within Articles 19 or Article 49(2) of the Financial
Services and Markets Act (Financial Promotion) Order 2000 as investment professionals and may not be
distributed to, or relied upon, by any other person.
Proprietary Rights Notice: By accepting a copy of this report, you acknowledge and agree as follows:
This report is provided to clients of SFM Finanz (SFM) only for your personal, noncommercial use.
Except as expressly authorized by SFM, you may not copy, reproduce, transmit, sell, display, distribute, publish,
broadcast, circulate, modify, disseminate or commercially exploit the information contained in this report, in printed,
electronic or any other form, in any manner, without the prior express written consent of SFM. You also agree not to use
the information provided in this report for any unlawful purpose.Th is i s RJ Ac li en t re l eas a bl e res ea rch
This report and its contents are the property of SFM and are protected by applicable copyright, trade secret or other
intellectual property laws (of the United States and other countries). United States law, 17 U.S.C. Sec.501 etseq,
provides for civil and criminal penalties for copyright infringement

Weekly Markets Update

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Weekly Markets Update

Enviado por

Direitos autorais:

Formatos disponíveis

11 avril 2010 [WEEKLY MARKETS UPDATE]

Weekly Markets Update

Last week marker summary:

The Week Ahead

DOW JONES INDU. Future June 2010

GMT Ccy Events Consensus Previous

01:30 AUD Home Loans Feb -1.0% -7.9%

01:30 AUD Investment Lending Feb -- 0.9%

01:30 AUD Value of Loans M/M Feb -- -5.0%

08:00 EUR Italian Industrial Production -0.3% 2.6%

08:00 EUR Italian Industrial Production 2.8% 0.1%

08:00 EUR Italian Industrial Production -1.0% -3.3%

12:15 CAD Housing Starts Mar 200.0K 196.7K

14:30 CAD Business Outlook Future Sales -- 49

14:30 CAD BoC Senior Loan Officer -- -8.7

18:00 USD Monthly Budget Statement -$87.5B -$191.6B

22:45 NZD NZ Card Spending M/M Mar -- -0.4%

23:01 GBP BRC Retail Sales Monitor Mar -- 4.5%

23:01 GBP RICS House Price Balance Mar 18% 17%

23:50 JPY Domestic CGPI M/M Mar 0.3% 0.1%

23:50 JPY Domestic CGPI Y/Y Mar -1.1% -1.5%

Tuesday, Apr 13, 2010

GMT Ccy Events Consensus Previous

01:30 AUD NAB Business Confidence Mar -- 19

01:30 AUD NAB Business Conditions Mar -- 8

04:00 JPY Tokyo Condominium Sales -- 10.7%

06:00 EUR German CPI M/M Mar F 0.5% 0.5%

06:00 EUR German CPI Y/Y Mar F 1.1% 1.1%

06:00 EUR German HICP M/M Mar F 0.6% 0.6%

06:00 EUR German HICP Y/Y Mar F 1.3% 1.3%

06:00 EUR German WPI M/M Mar 0.5% 0.1%

06:00 EUR German WPI Y/Y Mar 3.6% 2.1%

06:45 EUR French CPI Y/Y Mar 1.5% 1.3%

06:45 EUR French CPI M/M Mar 0.4% 0.6%

06:45 EUR French HICP M/M Mar 0.4% 0.6%

06:45 EUR French HICP Y/Y Mar 1.6% 1.4%

06:45 EUR French CPI Ex Tobacco Index 119.5 118.99

06:45 EUR French Current Account -- -3.4B

08:30 GBP Visible Trade Balance (GBP) -7.300B -7.987B

08:30 GBP Trade Balance Non EU (GBP) -3.900B -4.834B

08:30 GBP Total Trade Balance (GBP) -3.050B -3.768B

08:30 GBP DCLG UK House Prices Y/Y -- 6.2%

11:30 USD NFIB Small Business -- 88

12:30 CAD International Merchandise 0.4B 0.8B

12:30 CAD New Housing Price Index M/M 0.5% 0.4%

12:30 USD Trade Balance Feb -$38.8B -$37.3B

12:30 USD Import Price Index M/M Mar 0.9% -0.3%

12:30 USD Import Price Index Y/Y Mar 11.7% 11.2%

14:00 USD IBD/TIPP Economic Optimism 47.8 45.4

14:45 USD Fed's Daniel Tarullo Speaks in -- --

20:30 USD API U.S. Crude Oil Inventories -- 1070K

20:30 USD API U.S. Gasoline Inventories -- -2957K

20:30 USD API U.S. Distillate Inventory -- 723K

21:00 USD ABC Consumer Confidence -- -43

22:45 NZD Retail Sales M/M Feb 0.2% 0.8%

22:45 NZD Retail Sales ex Auto M/M Feb 0.4% 0.3%

23:00 USD Fed Chairman Ben Bernanke -- --

23:15 USD Fed's Jeffrey Lacker Speaks in -- --

Wednesday, Apr 14, 2010

GMT Ccy Events Consensus Previous

00:30 AUD Westpac Consumer -- 0.2%

00:30 AUD Westpac Consumer -- 117.3