IIFT Daily Note with Peter Brown

Cyprus still dominates the Euro market.

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The banks open today but you will not get your money back. The damage from the Cyprus bail in will take some time to feed through but already there is evidence that funds are flowing from Europe to the US. This will keep the Euro weak for some time and the challange now is to try and establish how low it can go. Talking to people yesterday most commentators are thinking below 1.20 One bond broker is looking for PAR! I certainly think 1.18 is a reasonable target.

I am now trading the Euro from the short side and will be a seller only, for the next while. I will not look at buy trades no matter how attractive they seem.

This is the strategy I use on the IBEX and is highly successful.

On the S&P I think the mood may change in April but I am loath to short the market. It is unusual for there to be such a contrast between the two products, the normal correlation is they rise and fall together. However the S&P could do with a correction so we buy on dips until there is news to cause that.

Levels today are.  S&P  1560  1550  1547  Euro 1.2850  1.2820   1.2750

USD/JPY is setting up for a buy in the 94.00 region. The new year should ring in some buying towards 96.50  98.50

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