Re: nincs cím

Morning Adviser Europe 9/24/2010 6:01:00 AM

Yen Weakens Suddenly

By Gareth Berry

It was a very quiet Asia trading session with China still on holiday and no economic data releases. EURUSD traded 1.3287-1.3364 while USDJPY traded in a wide range between 84.30 and 85.40 after a sharp upward spike. Japanese officials declined to comment on whether this was an act of intervention. Earlier, US initial jobless claims climbed unexpectedly to 465k from 450k previously. August existing home sales came in very close to the consensus estimate at +7.6% m/m and, as a result, did not prompt much of a USD reaction. Although no formal joint statement was issued after yesterday's meeting between President Obama and China's Premier Wen, a US official revealed that Obama stressed the "need for China to do more" on the currency issue. Today, August durable goods orders and new home sales are due. A number of Fed officials are also scheduled to speak: Richmond Fed President Lacker's speech is entitled "Reflections on Economics, Policy and the Financial Crisis"; Philadelphia Fed President Plosser is due to speak on "Monetary Policy after the Financial Crisis"; and Chairman Bernanke is due to deliver a speech entitled "Fixing Economics: Lessons from the Crisis."

Key Events 24 September 2010 Source: UBS Global Economics Country GMT Release/Event Frequency UBS Prev/Revised Consensus Actual Germany 08:00 IFO - Business Climate (Sep) index 106.2 106.7 106.4 Germany 08:00 IFO - Current Assessment (Sep) index 107.5 108.2 108.7 Germany 08:00 IFO - Expectations (Sep) index 105.5 105.2 104.0 Switzerland 09:00 SNB Publishes Quarterly Bulletin (Sep-27) United States 12:30 Treasury's Geithner Speaks United States 14:00 New Home Sales (Aug) lvl 310K 276K 295K United States 14:00 New Home Sales (Aug) m-o-m 12.30% -12.40% 6.90% United States 17:00 Fed's Lacker Speaks United States 18:00 Fed's Plosser Speaks United States 20:30 Fed's Bernanke Speaks

Research Spotlight "Lower For Even Longer" UBS Fixed Income Strategy With Tuesday's FOMC statement giving the green light to carry trades in rates, the reach for yield has become more intense. We still find selling volatility via callable bonds attractive, and recommend doing this over a relatively long horizon by buying agency callable bonds. We return to the stance advocated after the first round of quantitative easing: buy what the Fed is buying. The "lower for longer" theme also makes the front end of the sterling swap curve look too high. Please see the "Lower For Even Longer" note on www.ubs.com/fx for details.

EUR Targets : EURUSD 1m 1.28, 3m 1.15 There was mixed news from Ireland as two T-Bill auctions attracted strong demand, while GDP data was disappointing. Bid-to-cover ratios on the Feb 2011 and April 2011 bills were 4.08 and 11.7, respectively. This confirms the prevailing trend of a succession of healthy auctions despite ever-widening bond and CDS spreads. The Irish 10y-Bund spread set a new record high, widening 21 bps on the back of comments from the Director of Ireland's National Asset Management Agency that the subordinated debt of a prominent commercial lender lacked guarantees. Ireland Q2 GDP figures were well below consensus of +0.5%, registering a quarterly decline of -1.2%, clearly demonstrating the challenges of achieving growth in a climate of fiscal austerity. Q1 growth was revised down from +2.7% to +2.2%. With several European countries about to begin budgetary discussions for 2011, Ireland's recent experience may encourage other governments to pursue a less strict approach to fiscal consolidation. The PMIs for the Euro Area came in under expectations. The September PMI composite came in at 53.8 vs. expectations of 55.7 and down from 56.2 in August. Euro Area PMI in the manufacturing sector came in at 53.6 after 55.1 previously - a significant decline. Euro Area PMI in the service sector came in at 53.6 after 55.9. Again, the result was lower than expected and a significant decline. Ahead Friday is the German Ifo.

JPY Targets : USDJPY 1m 85, 3m 95 USDJPY suddenly spiked 80 pips at 04:15 GMT. Vice Finance Minister for International Affairs Tamaki said he had no comment on whether Japan had intervened. Finance Minister Noda also declined to comment. Earlier, Japan Prime Minister Kan met with US President Obama. Although no official announcement was made after the meeting, that in itself was significant. Clearly, we have yet to hear any official condemnation of Japanese intervention from the fiscal or monetary authorities in the US, silence which could be interpreted as an implicit green light for further intervention.

GBP, NOK Targets : GBPUSD 1m 1.50, 3m 1.35; EURNOK 1m 7.80, 3m 7.60 We remain short GBPNOK at 9.22 with a stop at 9.40 and a target of 8.80, on the grounds that the BoE and Norges Bank appear to have adopted opposing monetary policy stances. While the BoE has not ruled out further easing, Norges bank have clearly maintained an explicit tightening bias and has signalled a desire to return rates to 'more normal levels'.

FX Technicals

USDJPY rebounds towards 85.93 EURUSD NEUTRAL There is scope for move towards 1.3509 and 1.3818 next. Near-term support comes in at 1.3268 ahead of 1.3159 USDJPY NEUTRAL The pair rebounds towards 85.93 with scope for 86.70 next. Support holds at 84.05 ahead of 82.88. GBPUSD BULLISH Following the break of 1.5729, expect gains to extend towards 1.5999 key high. Support is defined at 1.5503 ahead of 1.5297 USDCHF BEARISH Break through 0.9933/18 region reinstates the bearish trend. Next support lies at 0.9786 ahead of 0.9625. Resistance at 0.9983 intraday high. AUDUSD BULLISH Bounce-off from 0.8771 found resistance at 0.9600, psychological level, ahead of 0.9850 key high. Near-term support is at 0.9442 ahead of 0.9309 USDCAD NEUTRAL Choppy action holds between 1.0108 and 1.0509. EURCHF NEUTRAL 1.3391 and 1.2991 mark the key near-term directional triggers. EURGBP NEUTRAL Upside potential held below 0.8609 ahead of 0.8774. Support defined at 0.8463 ahead of 0.8390 EURJPY NEUTRAL Eyes 114.74 with scope for 116.68 next. Support holds at 110.66 ahead of 107.73 *NOTE: The trend for each currency pair as defined in the table is determined by our proprietary model and is independent of our discretionary interpretation of price action