Stris Daily Eur. Open

August 20, 2013

Eurodollar:

TECHNICAL:

June 15 is full throttle Short on our model. Price indicators, Vol. weight MACD and BOP are all pointing towards more downside pressure.

FUNDAMENTAL:

Our Model is Short today. With little fundamental data on the docket and the existing themes in play and pushing markets lower we see more downside ahead.

SUMMARY:

Our combined model is Short. Our only note of caution is the FOMC Minutes tomorrow and that there may be some profit taking ahead of the expected Hawkish Minutes.





Macro Theme:

Clearly the market will lean towards being SHORT the 10's knowing that the BIG TAPER is just months away. Remember the TAPER is new just as TARP was 5 years ago. Bonds caught a bid and stayed bid and since the Taper talk bonds have been largely offered and stayed that way and likely will. FED Talk is of course down playing the impact but for now the Macro Trend is clear - SHORT BIAS

Euribor:

TECHNICAL:
Our Model for June14 is Short to Neutral today. Breaking 50 to the down side may difficult but will be important for continued price pressure to mount. Inidicators are showing concern about this consolidation above the 50 handle.


FUNDAMENTAL:

Our Model is Neutral to Short today. The theme should continue however, a weak PPI reading may supplant yesterday's Bundesbank comments. 

SUMMARY:

We are Neutral to Short bias. Both Models have a caution flag on a full throttle short.

Macro Theme:

The ECB is out of tools. Their situation is precarious as recent data has bottomed out but not strong enough to turn the European recession around which means all they can do IS TALK DOWN RATES but TAKE NO ACTION!