MARKET MOVER - BNP PARIBAS - Investment Services India

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NOKSEK to extend downtrend • Scandinavian currencies have been the out performers over the past week and in the case of SEK over the past month • The SEK uptrend has been accelerated with multi-year trendlines currently being tested; a break of which will open further significant appreciation potential • The NOK has remained supported, but the medium term technical position is less encouraging than that of the SEK… • …hence we expect NOKSEK to extend the major downtrend, especially given the sharp break lower through long term support The Scandinavian currencies have been the out performers over the course of the past week and in the case of the SEK the top performer among the G10 currencies over the past month as well. Technical indicators are still giving bullish signals for the SEK and the break through key technical levels suggests that the SEK has further upside potential. Indeed, EURSEK is now testing long term up trendline support currently intervening at 9.1065. A break below here will trigger another bearish signal leaving EURSEK vulnerable to a decline towards 8.9595 and then the 2005 low of 8.8800. EURNOK has been keeping the pressure on support in the 7.8405 and 7.8125 areas, which represents the bottom end of the three month trading range. A break below here is needed to trigger a decline back towards the 7.6785 May low. However, medium term technical indicators have now started to develop positive signals with both the 9-day and 9-week RSI moving higher. Hence, the ability to hold above the 7.8405/7.8125 support is likely to see a EURNOK rebound to test the major down trendline resistance at 8.0120. A break above here will trigger a renewed bullish signal opening upside potential towards the 8.2280 level, which is the peak from May as well as the 38.2% retracement level of the decline from the 9.1460 June 2009 high. The diverging technical picture between the NOK and SEK suggests that NOKSEK is now vulnerable. Indeed, NOKSEK has extended the major down trend, breaking lower through the bottom end of the long term trading range in the 1.1645 area to test the initial channel support at the 1.1495 level. The initial rebound from here has been limited by the key resistance at 1.1660 and down trendline resistance at 1.1685. Failure to overcome this resistance will keep the down trend intact. Indeed, medium term technical indicators are giving bearish signals. Hence, we expect a decline below the recent 1.1645 lows opening downside potential towards the major channel support at 1.1315 and then long term support at 1.1195. EURUSD has extended the recent recovery rally to test channel resistance in the 1.3445 area. From here a near-term correction lower is likely targeting the 1.32 and 1.3155 area. The ability to hold above 1.3155 will keep the outlook bullish allowing a move to 1.3690. Chart 1: EUR/USD – near-term correction lower 1.46 1.4580 1.41 1.3820 1.3690 1.36 1.3280 1.3400 1.3445 1.31 1.3275 1.26 1.2920 1.21 1.2180 1.16 1.1880 01-Feb-10 31-Mar-10 28-May-10 27-Jul-10 23-Sep-10 Source: BNP Paribas Ian Stannard 23 September 2010 Market Mover, Non-Objective Research Section 48 www.GlobalMarkets.bnpparibas.com
Chart 2: EUR/SEK – major support being tested EURSEK has extended the major down trend to test the lower boundary 10.25 10.2480 of the major 10.05 9.9570 descending channel 9.8815 and the long term up 9.85 trendline support which coincide at 9.1065/9.0930. A break below here will 9.65 9.6640 trigger another bearish 9.45 10.153 signal leaving EURSEK vulnerable to a decline 9.25 9.3585 towards 8.8800 over the medium term. 9.05 01-Feb-10 31-Mar-10 28-May-10 27-Jul-10 9.5300 9.0850 23-Sep-10 Source: BNP Paribas The technical picture for the NOK is less bullish with EURNOK failing to break lower through support. 8.40 8.30 8.20 Chart 3: EUR/NOK – holding above support 8.2640 8.2305 8.1735 Technical indicators are also giving bullish signals. 8.10 8.00 7.90 A break above the down trendline 7.80 resistance at 8.0120 will trigger gains 7.70 towards the 8.1735 and 8.2280 area. 7.60 8.1140 7.9950 01-Feb-10 31-Mar-10 7.6735 28-May-10 7.8000 27-Jul-10 7.9960 7.8500 23-Sep-10 Source: BNP Paribas The NOKSEK rebound has remained limited keeping the down trend intact. Chart 4: NOK/SEK – extending the down trend 1.28 1.26 1.2550 1.2585 1.2530 Major support at the 1.1645 level, which represents the bottom end of the major trading range has been broken. 1.24 1.22 1.20 1.18 1.2120 1.1870 1.2280 1.2035 We now expect the down trend to be extended towards 1.1315 and 1.1195. 1.16 1.14 06-Oct-09 03-Dec-09 01-Feb-10 31-Mar-10 28-May-10 1.1615 27-Jul-10 23-Sep-10 Source: BNP Paribas Ian Stannard 23 September 2010 Market Mover, Non-Objective Research Section 49 www.GlobalMarkets.bnpparibas.com
Page 1 and 2: Euromoney Interest Rates Survey 201
Page 3 and 4: ECB on a different page… …but i
Page 5 and 6: developments and is prepared to pro
Page 7 and 8: and property tax payments, dropped
Page 9 and 10: directly to effect outright purchas
Page 11 and 12: Services also on the slide The ‘f
Page 13 and 14: inflation rate is calculated exclud
Page 15 and 16: closer to a more normal level” to
Page 17 and 18: point advance in the June Tankan. P
Page 19 and 20: US: Belly of the Curve is Rich, but
Page 21 and 22: US: A Carry Trade with Extra Potent
Page 23 and 24: MBS: Remain Underweight, GNM CBRs U
Page 25 and 26: EUR: Re-Enter Flatteners on 5y/10y
Page 27 and 28: EGBs: Market Update & Top Trade Ide
Page 29 and 30: EUR Covered Bonds: Market Update
Page 31 and 32: GBP Curve Opportunities Update •
Page 33 and 34: Table 1: BNP Paribas' Inflation For
Page 35 and 36: Table 3: BNP Paribas' Inflation For
Page 37 and 38: Table 1: BNP Paribas Carry Analysis
Page 39 and 40: have been happy to buy the roll to
Page 41 and 42: Technical Analysis - Interest Rates
Page 43 and 44: Trade Reviews Options, Money Market
Page 45 and 46: ond market attracted huge swathes o
Page 47: warning to Greek banks that it migh
Page 51 and 52: Economic Calendar: 24 Sep - 1 Oct G
Page 53 and 54: Economic Calendar: 24 Sep - 1 Oct (
Page 55 and 56: Key Data Preview Chart 3: US ISM Po
Page 57 and 58: Key Data Preview Chart 7: US Consum
Page 59 and 60: Key Data Preview Chart 11: Japanese
Page 61 and 62: Key Data Preview Chart 7: UK CIPS M
Page 63 and 64: Economic Calendar: 4 - 29 October 4
Page 65 and 66: Next week's T-Bills Supply Date Cou
Page 67 and 68: Economic Forecasts GDP Year 2010 (%
Page 69 and 70: Market Coverage Market Economics Pa

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