Daily Trading Stance Wednesday, January 27, 2010

Theme Comment
 It is now more or less obvious that Bernanke will be reelected as Fed Chairman. That will be supporting risk, so we are
looking for a bounce in the markets over the rest of the week.
 Furthermore, New Home Sales have the potential to surprise on the upside, so we recommend being long stocks and
risk over the figures.
 Therefore we have a “buy on dips” stance for risk today – especially ahead of the FOMC Decision and Statement
tonight.

Economic Data Releases

Country Time (GMT) Name Saxo Consensus Prior
US 15:00 New Home Sales MoM (DEC) 4.3% 3.0% -11.3%
US 19:15 FOMC Rate Decision 0.25% 0.25%

FX Daily stance Comment

EURUSD 0 Expect consolidation within 1.4020 – 1.4120 range. Await breakout.
USDJPY 0 Seen ranging around 89.30 retracement lvl. Suggest 88.80-89.70 parameters.
EURJPY 0 Capped at 126.35 but ranging 125.0-126.20.
GBPUSD 0/- Look to sell rallies to 1.6160-70 area for a retracement back to 1.6085. Stop abv 1.6205.
AUDUSD 0/- Prefer to sell rallies to 0.9050 for test of 0.8960, poss 0.8930 sht-term. Stop abv 0.9110.

FX-Options Comment
EURUSD Front end started off strong but later saw sellers as spot came off the lows and later
found a base. There was also a buyer of 26 Mar 1.46 in 1 bio.
USDJPY Spot drops to 8915 and keeps vols well supported. No scramble for downside gamma
but back end vega sees good bids along with the risk reversals.
AUDUSD Vols remain bid throughout the Asian session. Market is rather long gamma in this spot
range so front end likely to get offered if spot ends up above 9050 after the FOMC.

Equities Daily stance Comment

DAX 0/+ Buy on dips towards 5640 targeting 5680. S/L below 5625.
FTSE 0/+ Buy on dips towards 5250 targeting 5290. S/L below 5230.
S&P500 0/+ Buy on dips towards 1088 targeting 1100. S/L below 1084.
NASDAQ100 0/+
DJIA 0/+

Commodities Daily Stance Comment

Gold 0/+ Buy at the break of 1105 and target 1115. Stop below 1100.
Silver 0/- Sell at the break of 16.70 and target 16.50. Stop above 16.80.
Oil (CLH0) 0 Neutral.

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
US (G(GMT)(GMT
07:30 Boeing 1.361 -2.220
US 07:30
) Caterpillar 0.280 0.440
US 08:30 ConocoPhilips 1.140 1.020
 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-sep 17-nov 17-jan 17-mar 17-maj 17-jul 17-sep 17-nov 17-jan
28-01-2009 28-03-2009 28-05-2009 28-07-2009 28-09-2009 28-11-2009
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 50.
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
jun-08 sep-08 dec-08 mar-09 jun-09 sep-09 dec-09
01-08 03-08 05-08 07-08 09-08 11-08 01-09 03-09 05-09 07-09 09-09 11-09 01-10

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
10 35

9
30
8

25
7

6 20

5
15
4

3 10

2
5
1
0
0
jul-09 aug-09 sep-09 okt-09 nov-09 dec-09 jan-10
mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09 okt-09 nov-09 dec-09
CBOE SPX VOLATILITY INDX
GDMA Hungarian - German Czech Republic - German Poland - German

The VIX Index is now at 25.

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.