IIFT Daily Note with Peter Brown

Happy New year

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Morning and welcome to a new year of trading. Looks like we will get a steady start. Good volatility without the crazy stuff.

Market will be dominated by bond auctions this month. Germany today for example. Italy mid month.They will come thick and fast. Has the market the appetite to absorb all this funding. We will see. On the markets, given the low level of US interest rates the S&P will want to go higher at every opportunity. levels above are 1280, 1300. 1325. 1350. this is the area we will trade into if the bond auctions go well. Euro should depreciate quite a bit this year, but January is notorious for the wrong move. expect the Euro to show some strenght early, maybe to 1.3300.  Most important are the bond yields, if Italy heads above 7% any of the days the Euro will fall.

Expect reasonable movements.  70 + on FX 100/150 on the S&P . Nice trading conditions.

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