IIFT Daily Note with Peter Brown

ESM ruling

Posted by:  |  Time: 7:38 am  |  Topic:
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The ESM ruling from the German Constitutional Court will dominate today. We expect it at 9am our time.

The market is expecting a yes vote with conditions. The important issue is the conditions. If they are easy the Euro will probably test 1.2900. If they are difficult we will sell off and if they reject it outright the market will collaspe.

So for trading we have to be careful. The Euro has had a great run and needs a correction. My guess is there will be some conditions and the Euro will probably take some profit. See Forexlive for a good anaylsis. Medium term with the Fomc comming tomorrow I think we will go through 1.3000. But for now the clever thing is to wait and see and buy on any dip towards 1.2800

The S&P is sidelined ahead of tororrow. 1428  1438 range. We expect some sort of QE3 and a move towards 1445/50 then a correction

Gold looks likely to be the big winner, holding support at 1724 we expect a move towards 1800 over the next few weeks.

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