IIFT Daily Note with Peter Brown

Cyprus, a reminder the Eurozone crisis is not over!

Posted by:  |  Time: 7:39 am  |  Topic:
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Missed trading yesterday, what a day. A meltdown in the Euro and IBEX on the back of the Cypriot bailout. Burning depositors, comming from a country inside the Euro is serious stuff. It opens up the prospect of that happening somewhere more serious. Spain for example. It is important they reverse this option and protect savers. Depositors across the Eurozone are supposed to be protected by deposit guarantee schemes. This adds uncertainty and the market will not like it.

So we can expect volatility. We have no decision from Cyprus and while we await that the market will be nervous. Trading today could be volatile so be careful. Expect fast moves based on rumour.

Levels are Euro 1.3000   1.2900  S&P as usual bounced back strongly from a move to 1530, upside should be capped while Cyprus rumbles so 1560 on the topside. Range is huge but today is about trading with the sentiment. If the Euro market opens negative sell it and vice a versa.

IBEX unfortunately crashed yesterday, trading strategy is to sell if the mood is bad. Wait for the open.

USD/JPY is holding well and should start to make ground soon.

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