Re: euró kampec

UBS - Morning Adviser Europe 1/13/2011 7:17:00 AM

EUR

Targets: EURUSD 1m 1.30, 3m 1.25 Belgium's Prime Minister Leterme said that he does not think Belgium needs help from the stability fund, and that there is no justification for bond spread widening. He insisted he would do whatever it takes to defend the euro. Portugal's much-anticipated bond auction passed without incident yesterday. The bid-cover ratios were good though the yields remained elevated. The Portuguese Finance Minister said that 80% of the demand from the auction was from foreign sources. There were also headlines that Chinese officials remain interested in Eurozone sovereign bonds, including EFSF bonds, but the comments still sounded conditional. German Chancellor Merkel said Germany would do what is needed to support the euro but a government spokesperson later said now may not be the time to discuss EFSF expansion. The European Commission's Barroso said EU leaders may decide on potential EFSF changes in early February and a Bloomberg story specifically noted Greek bond purchases could be discussed at Tuesday's Ecofin meeting, as part of plans to expand the size and scope of the EFSF. The story cites unnamed sources 'with direct knowledge of the talks'. German Finance Minister Schaeuble said European nations are working on a mid-term solution to the current debt crisis that could include a comprehensive package but that no agreement is expected at the next Eurogroup meeting, though a deal may be possible at an upcoming summit. An internal EU report for the EU Commission (seen by Reuters) suggests that the European Stability Mechanism could take in contributions direct from financial institutions and it is in the interest of the financial system that institutions contribute to the safety net. Applying a banking tax of 0.2% of the Euro area bank assets would allow around EUR50 bn to be raised. We remain short EURUSD as a trade recommendation from 1.2900 with a stop at 1.3150.

CHF

Targets: EURCHF 1m 1.30, 3m 1.28 SNB Vice President Jordan said Swiss franc strength poses a threat to growth but did not comment if the SNB would take action to weaken the currency. He did appear to be especially concerned about how the Eurozone crisis might unfold and what it might mean for the CHF. He dismissed the idea of pegging the CHF to the EUR. Jordan said the SNB would have to raise rates over the medium term to maintain price stability but that it had some flexibility over the timing of rate hikes. We remain short CHFSEK from 7.17 as a trade recommendation, and have trailed our stop from 7.32 to 7.06.

FX Technicals

USDCAD holds above 0.9825 EURUSD BEARISH Currently holds support at 1.2867 ahead of 1.2796 Fibonacci level. Resistance is at 1.3170 USDJPY NEUTRAL 83.67 and 82.63 mark the near-term directional triggers GBPUSD BULLISH Sharp rise through 1.5709 has exposed 1.5822 ahead of 1.5911; support at 1.5583 yesterday's low USDCHF BULLISH Upside potential with focus on 0.9852 ahead of 0.9916. Support is at 0.9605 AUDUSD BEARISH The pair found support at 0.9804 ahead of 0.9753; resistance at 1.0015 USDCAD BEARISH Lower boundary of 0.9889/25 support area holds; a break here would expose 0.9712.Resistance is at 0.9951 EURCHF NEUTRAL Rise through 1.2726 has exposed 1.2797; initial support at 1.2517 EURGBP BEARISH Violation of 0.8285 would expose 0.8252; resistance at 0.8339 EURJPY BEARISH As long as resistance holds at 110.24, expect losses to target 106.83 ahead of 105.80/44 support zone. *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