Daily Trading Stance Friday, October 23, 2009

Theme Comment
Stocks in a strong reversal higher yesterday. The risk-trade is on again. USD and JPY lower and commodities, AUD and
EUR higher.
US 10-year Treasuries threaten to break support at 117-20. That could be an intraday trigger for new highs in stocks.
The S&P500 trendline resistance today is at 1114.
Earnings show improvement, but there is an ongoing discussion about the quality of earnings in especially financial
shares.

Economic Data Releases

Country Time (GMT) Name Expectation Prior Comment
UK 08:30 UK GDP QoQ (OCT) 0.2 -0.6
EC 09:00 Industrial New Orders YoY (AUG) -22.5 -24.3
US 14:00 Existing Home Sales MoM (SEP) 4.9% -2.7%

FX Daily stance Comment

EURUSD 0/- May struggle past 1.5075-00 area. Prefer to sell, stop above 1.5140, target 1.4950 again
USDJPY 0/- Seen capped at 91.70-80 for a retracement back to 91.0, possibly 90.50
EURJPY 0/- Res at 137.85-00 seen holding for a retracement back to 137.0, then 136.60
GBPUSD 0/- Prefer to sell rallies to 1.6700-10, stop abv 1.6760. GDP data to determine n/term direction
AUDUSD 0 85-00
Expectseen holding for
o consolidate a retracement
below 0.9300. Suggested range 0.9240 – 0.9300

FX-Options Comment
EURUSD German name seen buying more middle of the curve 10 delta EUR puts for customers.
Buying interests likely to continue so expect vols to be well supported.
USDJPY Vols have been soft in Asia and as spot moves nearer to 9200, risk reversals have also
eased off. Expect spot to range between 9100-9250 in the near term.
AUDUSD Curve got given as spot fails to break higher. Even if it does grind to 9300 again, front end
should continue to be offered except for 2 week date which gets the RBA and nonfarm .

Equities Daily stance Comment

DAX 0/+ Buy on dips towards 5819 and target 5880. Stop below 5792.
FTSE100 0/+ Buy on dips towards 5255 and target 5298. Stop below 5229.
S&P500 0/+ Buy on dips towards 1093 and target 1103. Stop below 1089.
Nasdaq100 0/+
DJIA 0/+

Commodities Daily Stance Comment

Gold 0/+ Buy at the break of 1065 and target 1076. Stop below 1060.
Silver 0/+ Buy on dips towards 17.50 and target 17.70. Stop below 17.40.
Crude Oil 0/- Sell on rallies towards 82.50 and target 80.00. Stop above 83.30.

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
US (G(GMT)(G
Bf-Mkt Honeywell 0.716 0.740
US Bf-Mkt
MT) Microsoft 0.324 0.370 Important for sentiment
US 14:00 Schlumberger 0.625 0.680
 Daily Trading Stance

Top 100 Global Stocks CDS Index

US Breakeven 10 Year 140
3

2,5
120

100
1,5

1 80

0,5

60

-0,5 40
12-jun 12-aug 12-okt 12-dec 12-feb 12-apr 12-jun 12-aug 12-okt 23-10-2008 23-12-2008 23-02-2009 23-04-2009 23-06-2009 23-08-2009
US Br eakeven 10 Year Saxo CDS Index

USD breakeven 10 Year – an expression for measuring Credit Default Swaps are expressions for the
inflation expectations. perceived default risk in a company. Now at 54.
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
mar-08 jun-08 sep-08 dec-08 mar-09 jun-09 sep-09
0
okt-07 dec-07 feb-08 apr-08 jun-08 aug-08 okt-08 dec-08 feb-09 apr-09 jun-09 aug-09 okt-09
M o o d y B A A - US Ge n eri c Go vt 3 0 Ye ar Yi e l d M o o d y A A A - US Ge n eri c Go vt 3 0 Ye ar Yi e l d
EUR- USD OPT VOL 1W EUR- USD OPT VOL 1M EUR- USD OPT VOL 1Y

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 45

40
10
35

8 30

25
6
20

15
4

10

2
5

0
0
apr-09 maj-09 jun-09 jul-09 aug-09 sep-09 okt-09
dec-08 jan-09 feb-09 mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09
CBOE SPX VOLATI LI TY I NDX

GDM AHungar ian - Ger m an Cz echRepublic - Ger m an Poland - Ger m an

The VIX Index is edging lower, now at 21.

1
General
These pages contain information about the services and products of Saxo Bank A/S (hereinafter referred to as “Saxo Bank”). The material is provided for informational purposes
only without regard to any particular user's investment objectives, financial situation, or means. Hence, no information contained herein is to be construed as a analysis; or an
offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy in any jurisdiction in
which such an offer or solicitation, or trading strategy would be illegal. Saxo Bank does not guarantee the accuracy or completeness of any information or analysis supplied. Saxo
Bank shall not be liable to any customer or third person for the accuracy of the information or any market quotations supplied through this service to a customer, nor for any
delays, inaccuracies, errors, interruptions or omissions in the furnishing thereof, for any direct or consequential damages arising from or occasioned by said delays, inaccuracies,
errors, interruptions or omissions, or for any discontinuance of the service. Saxo Bank accepts no responsibility or liability for the contents of any other site, whether linked to this
site or not, or any consequences from your acting upon the contents of another site. Opening this website shall not render the user a customer of Saxo Bank nor shall Saxo Bank
owe such users any duties or responsibilities as a result thereof.

Analysis Disclosure & Disclaimer

Risk warning
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any analysis, forecast or other information herein contained. The contents of this
publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in
connection therewith can or will be limited. Trades in accordance with the analysiss in an analysis, especially leveraged investments such as foreign exchange trading and
investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.