26 února 2009

26/2 German government bonds dropping for 2nd day...

German 10-year government bonds fell for a second day after an industry survey showed consumer confidence in Europe’s biggest economy unexpectedly rose for a sixth month.

The declines pushed the yield on the 10-year bund to the highest level in three days as European stock markets rallied, sapping demand for the relative safety of fixed-income assets.
Economists forecast a government report today will show the rate of inflation in Germany dropped this month to the lowest level in almost six years.

The yield on the 10-year bund, Europe’s benchmark government security, advanced five basis points to 3.04 percent by 8:02 a.m. in London. The price of the 3.75 percent security due January 2019 slid 0.37, or 3.7 euros per 1,000-euro ($1,272) face amount, to 106.00.

The yield on the two-year German note rose four basis points to 1.29 percent. Bond yields move inversely to prices.

GfK AG’s confidence index for March, based on a survey of about 2,000 people, climbed to 2.6, the Nuremberg-based market- research company said today. Economists expected a drop to 2, the median of 22 estimates in a Bloomberg survey showed.

26/2 Crude oil trades near highest in a month...

Crude oil traded little changed in New York near the highest in a month after U.S. gasoline supplies fell as lower fuel prices led to increased demand.

Gasoline stockpiles declined 3.32 million barrels to 215.3 million barrels last week, the Energy Department said yesterday.

Consumption averaged 9 million barrels a day over the past four weeks, up 1.7 percent from a year earlier, as pump prices fell.

“The U.S. oil market is starting to ride on a short-term upward trend as factories begin gradually increasing their operations after massive reductions,” said Masaki Suematsu, an oil analyst at Newedge Group in Tokyo. “Oil may try and reach the $50 mark in the weeks ahead.”

Crude oil for April delivery was at $42.57 a barrel, up 7 cents, at 2:43 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, the contract rose $2.54, or 6.4 percent, to $42.50 a barrel, the highest settlement since Jan. 26. Prices have fallen 58 percent in the past 12 months.


Gold steady around $950 on Thursday, pausing for breath as investors took profit from an 11-month high hit last week and lay in wait for fresh news to begin buying again.The market has become more volatile after prices rose above the key $1 000 level last week, and though factors encouraging risk aversion remain, investors are choosing to cash in on the high prices now rather than chase them higher.
Traders said though light buying had aided prices, given talk of the global recession, some people may opt to sell gold to secure cash, causing the market to lack the momentum to push beyond $1 000 in the near term.Spot gold was trading at $952,45 an ounce as of 0245 GMT, little changed from New York's notional close of $952,10 on Wednesday. Gold fell 4% over the previous three sessions.The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings remained at a record high of 1 028,98 t on February 25, a level it first hit on February 19.

25 února 2009


Gold pulled back from the highs yesterday helped by improved stock market sentiment and profit taking. The massive flow into Gold recently has raised the specter of additional selling ahead. Flows into ETF’s which has driven the markets recently has ground to halt with the largest SPDR Gold Trust not seeing any increase in holdings since last Thursday.

The JPY has finally begun to weaken with the important break above 95 in USDJPY signaling further weakness ahead. This decline in a safe haven currency indicates either its reduced importance as a safe haven or some risk willingness returning to the market.

Given the incredible long position in the market some caution should be applied near term, especially if $950 on GCJ9 gives way.

Support: 950 937 931
Resistance: 973 985 990


WTI Crude continues to be stuck in a relatively tight trading range between $36.80 and $44.00. The renewed sell off in stock markets recently has not lead to any new lows being made and the bounce yesterday in S&P led to a 4% rally indication some resilience at current prices.

Behind the scenes the near month spreads has widened a little over the last couple of days as some investors have rolled their long into May or June in order to avoid the roll pressure from the US Oil Fund (USO:arcx) which currently holds 95,000 lots of April which needs to be rolled between the 6th and 11th March. Some are already now speculating in the spread widening around that time.

It is expected that OPEC will cut again in March to eliminate the floating storage of up towards 80 mio barrels which then in turn should begin to reduce onshore crude stock. Current expectations for global demand is a reduction of 1.5 mio barrels per day which compared to already agreed OPEC cuts of 4.2 mbd. Based on those assumption higher prices in H2 of 2009 is a possibility.

The above is most likely what currently hold Crude prices in a tight range and which also has lead to a certain dislocation from negative stock- and currency markets movements recently.

Support: 3780 3680
Resistance: 4020 4150 4395

24 února 2009


Crude oil (CLJ9) rose for the first time in three days as the U.S. stock market advanced, signaling that fuel use in the world’s biggest energy-consuming country may rebound.
Idea: If the support level above 37 hold, there might be some possibility to see some short-term bullish trend toward 41 level, where the oil is ranged last week. Buy dip around 38,00 with stop loss 36,90. First target 41.

23 února 2009

23/2 CHF could be under pressure due to pressure on Swiss banking secrecy.

The UBS is currently being sued by the US Government to hand out names of 52,000 US citizens that according to the US Government are customers in UBS and have avoided paying tax of their interest rates. Prior to this the UBS and the US Government settled in another lawsuit where UBS agreed to pay 780 million USD in penalty and hand out 250-300 names of US clients.

UBS and the Swiss banking secrecy more generally is under severe pressure from Obama who during his campaign stated that he will make sure that accounts in tax heavens held by US citizens will be taxed. The EU leaders followed Obama’s stance during the weekend in a pre G20-meeting. The Swiss government opposes this and is very reluctant to let go of the Swiss banking secrecy. However with political pressure from EU and the US chances are very small that Switzerland will win this battle.

The balance sheets of UBS and Credit Suisse added together are 8 times the GDP of Switzerland and the earnings in the banking sector accounts for approximately 14% of Swiss GDP. This makes Switzerland and especially the CHF very vulnerable towards the current turmoil around the Swiss banking secrecy.

On this note we expect that will the CHF will be under pressure when the case against the Swiss banking secrecy evolves.


After all the market noise last week relating to the expiry of March the market can once again focus on a single contract for a while. At least until US Oil begin to roll their 95.000+ long position in April on the 6th March.

Looking at 1st month continuation contract the market has now been trading sideways since the middle of November while the demand has deteriorated. It indicates that OPEC has had some success in stabilizing prices. It remains to be seen if the recent narrowing of time spreads is a confirmation that a bottom has been made.

First major level of resistance can be found at $44,75/90 which is trend line resistance area on both CLJ9 and CLc1. Support is 37.00 followed by 33.10 and then 32.40 (the big one).

The EURUSD broke higher on Friday taking out resistance from the 1,4719 high. This could indicate some consolidation for the Euro near term which again should lend some support to Commodities.

Support: 37.00 33.10 32.40
Resistance: 41.35 43.45 44.75/90 46.34

Gold has made a small pull back from $1007.7 despite a weaker dollar. The continued flow into futures and especially ETF’s should keep the market supported for now. A pull back should find buyers well ahead of main support at $951 with both 970 and 962 offering support on route.

Resistance located at 1008 with nothing above that before the 2008 high at 1034 (1032.70 on spot).