Daily Trading Stance Tuesday, October 27, 2009

Theme Comment
Stocks under pressure on rumours of 1) an S&P downgrade of major banks and 2) BofA raising capital via share issue.
None of them confirmed. S&P500 trendline support @ 1053.04 today. Good risk-reward for a buy at dips.
USD and JPY generally higher, but AUD getting a boost from the highest business confidence since 1995. More articles
pointing to tightening lending standards and monetary policy in the SE Asian countries. The huge discrepancy in
monetary policy is a negative for USD and EUR that are still dominated by low rates.

Economic Data Releases

Country Time (GMT) Name Expectation Prior Comment
US 13:00 Case-Shiller Home Prices YoY (AUG) -11.90% -13.30%
US 14:00 Conf. Board Cons. Confidence (OCT) 53.5 53.1
US 14:00 Richmond Fed Manuf. Index (OCT) 14 14

FX Daily stance Comment

EURUSD 0/- May struggle past 1.4920 res lvl, look to sell rallies for a break below 1.4940-45 for 1.48. Stop abv 1.50.
USDJPY 0/+ Buy dips to 91.80 for rebound back to 92.35, then 92.80. Stop below 91.50.
EURJPY 0 Stuck in 136.60 -137.60 range but would prefer to play from short side .
GBPUSD 0/- Break abv 1.6350 would target 1.6395 but sell there for retracement to 1.6250. stop abv 1.6450.
AUDUSD 0 85-00 seen
Neutral. holding
Could for of
run out a retracement
steam at 0.220 lvl.

FX-Options Comment
EURUSD RR was paid yesterday and the curve is now 0.5 vols bid for EUR puts, frontend a touch higher.
Mkt talking abt large 1.49 strike expiring tomorrow which could hold EURUSD in tight range until then.
Mkt interest for shortdated EUR puts make us believe the pair will trade lower in the short term,
1.47-1.4750 target and then correct higher again.

Equities Daily stance Comment

DAX 0/+ Buy on dips towards 5550 and target 5635. Stop below 5512.
FTSE100 0/+ Buy on dips towards 5105 and target 5161. Stop below 5083.
S&P500 0/+ Buy on dips towards 1062 and target 1074. Stop below 1057.
Nasdaq100 0/+
DJIA 0/+

Commodities Daily Stance Comment

Gold 0/+ Buy on dips towards 1040 and target 1050. Stop below 1035.
Silver 0/- Sell at the break of 17.00 and target 16.66. Stop above 17.16.
Crude Oil 0/- Sell on rallies towards 80 and target 78.50. Stop above 80.70.

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
DE (G(GMT)(G
07:30 Vestas Wind Systems 0.610 0.217
GE 11:00
MT) Daimler AG -0.020 -0.990
 Daily Trading Stance

Top 100 Global Stocks CDS Index

US Breakeven 10 Year 140
3

2,5
120

100
1,5

1
80

0,5

60
0

-0,5
40
17-jun 17-aug 17-okt 17-dec 17-feb 17-apr 17-jun 17-aug 17-okt
28-10-2008 28-12-2008 28-02-2009 30-04-2009 30-06-2009 31-08-2009
US Breakeven 10 Year Saxo CDS Index

USD breakeven 10 Year – an expression for measuring Credit Default Swaps are expressions for the
inflation expectations. perceived default risk in a company. Now at 52.
AAA and BAA Corporate Bonds vs. 30yr US Treasuries
EURUSD Opt. Vol.
35 7

30 6

25 5

20 4

15 3

2
10

1
5

0
0
mar-08 jun-08 sep-08 dec-08 mar-09 jun-09 sep-09
okt-07 dec-07 feb-08 apr-08 jun-08 aug-08 okt-08 dec-08 feb-09 apr-09 jun-09 aug-09 okt-09

EUR-USD OPT VOL 1W EUR-USD OPT VOL 1M EUR-USD OPT VOL 1Y Moody BAA - US Generic Govt 30 Year Yield Moody AAA - US Generic Govt 30 Year Yield

Volatility at different time horizons. Too low, now? Spreads are easing, but still showing tight
corporate debt markets.
CEE-German Govt. Bond Spreads CBOE SPX VOLATILITY INDEX
12 45

40
10
35

8 30

25
6
20

4 15

10

2
5

0
0
apr-09 maj-09 jun-09 jul-09 aug-09 sep-09 okt-09
dec-08 jan-09 feb-09 mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09
CBOE SPX VOLATILITY INDX
GDMA Hungarian - German Czech Republic - German Poland - German

The VIX Index is edging lower, now at 24.

1
General
These pages contain information about the services and products of Saxo Bank A/S (hereinafter referred to as “Saxo Bank”). The material is provided for informational purposes
only without regard to any particular user's investment objectives, financial situation, or means. Hence, no information contained herein is to be construed as a analysis; or an
offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy in any jurisdiction in
which such an offer or solicitation, or trading strategy would be illegal. Saxo Bank does not guarantee the accuracy or completeness of any information or analysis supplied. Saxo
Bank shall not be liable to any customer or third person for the accuracy of the information or any market quotations supplied through this service to a customer, nor for any
delays, inaccuracies, errors, interruptions or omissions in the furnishing thereof, for any direct or consequential damages arising from or occasioned by said delays, inaccuracies,
errors, interruptions or omissions, or for any discontinuance of the service. Saxo Bank accepts no responsibility or liability for the contents of any other site, whether linked to this
site or not, or any consequences from your acting upon the contents of another site. Opening this website shall not render the user a customer of Saxo Bank nor shall Saxo Bank
owe such users any duties or responsibilities as a result thereof.

Analysis Disclosure & Disclaimer

Risk warning
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any analysis, forecast or other information herein contained. The contents of this
publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in
connection therewith can or will be limited. Trades in accordance with the analysiss in an analysis, especially leveraged investments such as foreign exchange trading and
investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.