The probable scenario of a multi week rebound appears to be play here and the 2008 melt down scenario thankfully avoided.
I’m traveling unfortunately so i leave the analysis to the reports. Ill add comment in a few days but in hindsight my own book’s timing is so far so good on both sides of the play book. As i say, thus far. The next issue will be where to lose the longs. Not yet is all i can offer for now. Lets see how this price action develops. Given the sentiment is so poor it should be a strong rally here in the coming weeks.
Big picture for h1 the data should weaken in the US and earnings should continue to disappoint. There are few up side macro events on the horizon although the Bank of Japan and ECB could offer some monetary magic to propel this equity bounce higher. All paths from here remain likely golden in my opinion although the dollar basket index is likely to cap her advances in h1.
Without delay here the Swiss team:
And here GS’s latest with several conviction 2 longs on equities:
And here Citi’ Tech guru, Fitzpatrick:
Firstly as an interim
And secondly in his usual update:
And here MS with their usual FX run through.
In terms of historic correlations, Sterling’s key positive correlations are to its housing market and risk on generally. Sterling has become a risk on currency as it is a leveraged domestic consumption economy. Expect therefore a decent bounce in sterling in q1 vs the US$ so long as this equity rally sustains. Looking ahead she should be target no1 in terms of highly liquid currencies as a hedging vehicle later in the year.
Finally watch the BOJ. Japan is in a mess again as Fitzpatrick highlights above. More monetary “magic” will soon be coming, as it must if Japan is to remain solvent.
All the best
Rich