Daily Trading Stance Tuesday, October 06, 2009

Theme Comment
Stocks rallied in the US yesterday on the back of Goldman upgrading banks and industrials. We do expect further
upgrades, which will bring equities higher, but the current snapback could be purely technical move before going
lower.
Risk willingness seems to be intact; AUD and EUR getting stronger, USD getting weaker. Crude rallying along with
equity markets.
Australia hiked interest rates by 0.25% to 3.25%. RBA said that economic conditions in Australia had been stronger
than expected.
Demise of the USD? Arab states have launched secret moves with China, Russia and France to stop using USD for oil
trading and instead using a basket of currencies; USD is selling off on this.

Economic Data Releases

Country Time (GMT) Name Expectation Prior Comment
UK 08:00 Halifax House Prices MoM (SEP) 0.6% 0.8%
UK 08:30 Industrial Production MoM (AUG) 0.2% 0.5%
CA 14:00 Ivey Purchasing Managers Index (SEP) 56.2 55.7

FX Daily stance Comment

EURUSD 0/+ 1.4720 a current sticking point but expect to break for a push to 1.4780-00 area. Suppt now 1.4680
USDJPY 0/- Break below 89.0 would target 88.25 again. Likely ranging 88.60-89.50
EURJPY 0/- Res level edging down to 131.40. Expect 130.50-131.50 range with preference to short
GBPUSD 0 Still lagging. 1.6015-25 n/term res. Abv sees 1.6100 en-route 1.62 else we stay 1.5930-1.6020
AUDUSD 0/+ More upside likely but facing exhaustion at 0.89 lvl. Suppt now 0.8800-10

FX-Options Comment
EURUSD Spot moved higher in Asia but vols are largely unchanged. Gamma is likely to find a base
at these levels until Thursday’s ECB meeting.
USDJPY Vols are better bid this session as spot goes under 89.00. Riskies are paid up along the
curve but a spot move back towards 90 should bring back the sellers.
AUDUSD Gamma came off after the RBA rate hike. But with mid curve still well supported, we
need spot to break significantly higher. Otherwise, vols are likely to ease.

Equities Daily stance Comment

DAX 0/+ Buy on dips towards 5530 and target 5583. Stop below 5512.
FTSE 0/+ Buy on dips towards 5039 and target 5078. Stop below 5022.
S&P500 0/+ Buy on dips towards 1036 and target 1045. Stop below 1033.
Nasdaq100 0/+ Buy on dips towards 1675 and target 1691. Stop below 1671.
Dow Jones 0/+

Commodities Daily Stance Comment

Gold 0/+ Immed res at 1023.0 but expect to break for a test of 1030.0. Suppt now 1,015
Silver 0/+ Still bid looking for test of 17.0. Suppt shifts up to 16.73-75
Oil (CLX9) 0/+ While suppt at 69.85 holds expect gains to extend up to 71.35 res lvl

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
(G(GMT)(G
MT)
 Daily Trading Stance

Top 100 Global Stocks CDS Index

#N/A Requesting Data... 140
3

2,5
120

100
1,5

1 80

0,5

60

-0,5 40
27-maj 27-jul 27-sep 27-nov 27-jan 27-mar 27-maj 27-jul 27-sep 07-10-2008 07-12-2008 07-02-2009 07-04-2009 07-06-2009 07-08-2009
# N/A R e qu esti ng Data... Saxo CDS Index

USD breakeven 10 Year – an expression for measuring inflation Credit Default Swaps are expressions for the perceived
expectations. default risk in a company. Now at 57.
AAA and BAA Corporate Bonds vs. 30yr US Treasuries
EURUSD Opt. Vol.
35 7

6
30

5
25

4
20
3
15
2

10
1

5
0
feb-08 maj-08 aug-08 nov-08 feb-09 maj-09 aug-09
0
sep-07 nov-07 jan-08 mar-08 maj-08 jul-08 sep-08 nov-08 jan-09 mar-09 maj-09 jul-09 sep-09
M o o d y B A A - US Ge n e ri c Go vt 3 0 Ye ar Yi e l d M o o d y A A A - US Ge n e ri c Go vt 3 0 Ye ar Yi e l d
EUR -USD OP T VOL1 W EUR -USD OP T VOL1 M EUR -USD OP T VOL1 Y

Volatility at different time horizons. Too low, now? Spreads are easing, but still showing tight corporate debt
markets.

CEE-German Govt. Bond Spreads CBOE SPX VOLATILITY INDEX

12 50

45
10
40

35
8
30

6 25

20

4 15

10
2
5

0
0
mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09
dec-08 jan-09 feb-09 mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09
C B OE SP X V OLATILITY INDX

GDM A Hungar ian - Ger m an CzechRepublic - Ger m an Poland - Ger m an

The VIX Index is now at 27.

1
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