Market Economics | Interest Rate Strategy - BNP PARIBAS ...

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Technical Analysis – Interest Rates & Commodities Bond & Short-Term Contracts • Europe: Positive bias within MT falling wedge toward key 2.789 (LT falling support) with 2.849 (2009 low) tested • US: Supportive as pullback extended below key 3.751 (LT H&S neckline) to almost reach 3.45 (ST 61.8%) • Short-term contracts u0: A ST toppish tone on Euribor (below its ST channel) & ED (below its 2-dip neckline) Equities & Commodities • WTI (Cl1): Still up MT within LT rising channel but weak ST given ST rising channel & 2-dip neckline breaks • Equity markets: Markets turned consolidative/weak ST within Europe for a move below MT 61.8% US 10y: Pullback around key 3.756 but beware of a ST falling channel break MT Trend: Toppish Range: 3.45/3.70 The break above the MT falling channel in 3.104
Germany 10y: Within MT falling wedge testing key 2.789/2.849 MT Trend: Down Range: 2.78/3.00 Decisive break below key 3.093 (October 2.576 3.208 => 3.243 low & October/April MT trading range low boundary), opened MT way down towards 2.73 target area with 2.849 (2009 low) tested, next support being MT falling support line at 2.789 It is now on a key support area (2.789/ 2.849) & a failure to break it down could allow a technical rebound towards 3.068 (38.2%). However, we need now a break above 3.171/243 to turn again negative on a MT basis. The bias will now be neutral but supportive between 2.79/2.85 & 3.17/3.24 Tech Snapshot - Below key 3.093 (October low) - Within MT falling wedge & ST channel - 2.849 (2009 low) tested Strategy: Waiting now for a bearish signal to enter short. Bullish will keep long below 3% but could already take at least some profit on 2.80/85 area. UK 10y: Will stay supportive within the channel. Watch LT rising wedge support MT Trend: Toppish Range: 3.75/3.92 Break above 4.084 (June 09 top & wave “A” top) in February strengthened the MT rising scenario towards 4.50 theoretical target area but return seen below it weakened MT rising scenario with fall close to critical 3.791 (LT rising wedge sup) . A break now below it is the main risk for 3.618 (LT 50%) initially A break above ST falling channel (4.004) is needed now to reopen the ST way up even though a renewed break above 4.084 (wave “A” top) and then 4.105 (61.8%) is needed to rekindle the MT rising scenario 3.456 4.302 Tech Snapshot - Within ST falling channel -Testing LT rising wedge support Strategy: Wait for a ST falling channel break to re-enter short. S&P: Top reversal done on key 1228 with break below ST rising channel MT Trend: Consolidative Range: 1130/1190 1150 (wave “3” top) breakout strengthened the rising wave “5” scenario towards potential 1111 ⇐ 1132 ⇐ 1150/53 –!– 1228 ⇒ 1278 ⇒ 1330 1325 target but it stalled just below key 1228 (LT 61.8%) with a top reversal printed Break below ST rising channel & now daily Head & Shoulders neckline (1180) turned ST study consolidative & gave a first corrective signal now to develop a ST technical correction towards key 1153/55 (38.2%+ LT rising channel sup) initially & on a breakout 1132 and 1111 (50, 61.8%). Tech Snapshot - Close to LT rising channel support - Topped below key LT 61.8% - Break below ST rising channel - Top reversal printed Strategy: Keep short if you are below 1185 for 1130/50 Christian Sené 7 May 2010 Market Mover, Non-Objective Research Section 59 www.GlobalMarkets.bnpparibas.com
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Market Economics | Interest Rate St
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UK: all eyes on the election US: re
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Event response The ECB is being ove
Page 7 and 8: Eurozone Periphery: Compare and Con
Page 9 and 10: over 20% in Q1) and, last but not l
Page 11 and 12: Market Stress Charts • Signs of s
Page 13 and 14: Chart 7: Greek Bank CDS* 900 Greece
Page 15 and 16: • The plan also contains a number
Page 17 and 18: Germany: Downs and Ups • The impa
Page 19 and 20: Retail sales data from month to mon
Page 21 and 22: On inflation, the statement was als
Page 23 and 24: quarterly average of 2.7% in the fi
Page 25 and 26: US Credit: Still the Recovery’s B
Page 27 and 28: Japan: Rising Chance of Sales Tax H
Page 29 and 30: BNP Paribas Surprise Indicator •
Page 31 and 32: UK headline After surprising to the
Page 33 and 34: US: Supply Could Affect Swap Spread
Page 35 and 36: steep curve is typically associated
Page 37 and 38: decline. We continue to maintain ou
Page 39 and 40: Chart 12: 90-119 Day Dlq for FRE 90
Page 41 and 42: the gamma sector for some time now.
Page 43 and 44: EUR: Limited Nervousness at ECB Ten
Page 45 and 46: with the big redemption (EUR 17.7bn
Page 47 and 48: measures are not promptly taken to
Page 49 and 50: Table 1: BNP Paribas' Inflation For
Page 51 and 52: Table 3: BNP Paribas' Inflation For
Page 53 and 54: Table 1: BNP Paribas Carry Analysis
Page 55 and 56: What’s the call? It is relatively
Page 57: Update on FIN SEN and FIN SUB 5/10y
Page 61 and 62: Judging Currencies by Liquidity •
Page 63 and 64: type of regulation would reduce mon
Page 65 and 66: Euro Dives • The euro is collapsi
Page 67 and 68: Currency Spot Trade Recommendations
Page 69 and 70: Economic Calendar: 7 - 14 May (cont
Page 71 and 72: Key Data Preview Chart 1: US Payrol
Page 73 and 74: Key Data Preview Chart 5: UK Manufa
Page 75 and 76: Key Data Preview Chart 9: French GD
Page 77 and 78: Key Data Preview Chart 13: US Indus
Page 79 and 80: Treasury and SAS Issuance Calendar
Page 81 and 82: Central Bank Watch Interest Rate EU
Page 83 and 84: FX Forecasts* USD Bloc Q2 '10 Q3 '1
Page 85: RESEARCH DISCLAIMERS: IMPORTANT DIS
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