IIFT Daily Note with Peter Brown

Short term positive, long term negative.

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We got a deal on Cyprus before the deadline. This was always going to happen but the job now is to decide the impact and longet term damage for the Eurozone. Bailing in and haircutting large deposits will have major negative impact on banks across the zone. Remember many banks in larger countries are dependant on ECB money to stay open. A move from emergency liquidity to a properly funded balance sheet is now further down the road. And a return to growth in some of these countries is now futher away.

So we may get a short term rally over the next few days but the Eurozone is a crisis that has a long way to run. The contrast between Europe and the US is becomming stark and strategies playing the differential may be the way forward.

I like the S&P and the USD/JPY ( after Japanese year end)

I do not like the Euro, UK, Dax, IBEX.

Today is to decide how much we rally if at all.

Levels are S&P 1560  1546  1536

Euro 1.3050  1.3000 1.2960  1.2920

 

 

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