Macro trade: Buying NOK - enough is enough.....

TRADE: Sell EURNOK here @ 8.5200.

Enough is enough. I have bought EUR put NOK call, strike 8.2000 expiry: 19-FEB for 177 pips.

Norway has been hurt from anti-safe haven outflow as investors have moved money from new Switzerland of Norway and Sweden to Spain and Club Med. Spread Germany vs. Spain was year low yday and EURNOK year high. The world is simple, but let's look at some fundamentals:

Norway GDP +2.0% / Spain: -1.30%,

Norway C/A Surplus +13% / Spain +1.1,

Norway unemployment 3.55% / Spain 26.5%

 

 

Need me to continue?

NOK & SEK is high risk currencies in terms of volatility hence my trade through options. Remember Scandies moves fast both ways.

 

Latest speech by Governor Øystein Olsen in Bergen on Dec-9^th 2013: Outlook for the Norwegian and the international economy

 

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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ECB conclusion: Buy EURUSD to test ECB non-commitment.

ECB press conference

NET CONCLUSION: Be long EURUSD to test ECB. 1.3620 stop below 1.3520 (on close)

None event from Draghi - subdued inflation and "forward guidance is working" is headlines. Well considering they have 2% inflation target and 0.9% realised inflation I find it hard to think/believe they have anything under control.

This is a "talk to the market" press conference. See me, Draghi, I am, we are credible, but....market immediately test him with much higher EURUSD . 

Now the game is probably to be long EURUSD untill we/they force ECB to cave in and move to next thing. Next thing? I don't know but increasingly I have the idea that more fiscal expansion under the excuse of inequilty and deflation is the response.

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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Macro digest: Sell CAC40 & France

Sold CAC-40.I CFD's @ 4.140.37 with stop at 4.250 (on Close)

France and its stock market owns the luxury goods market. According to Bain & Co. they are 25% of the world market for these sought after products. The problem with this "luxury" is of course that EMG growth overall and China growth is slowing dramatically under the headline: "quality growth instead of nominal growth".

I have just been to several of these luxury markets: Hong Kong, Singapore, Indonesia, Brazil and Dubai and except for the later all of these markets are in a deliberate slow-down move often engineered by the governments in those countries as either current account deficits (Indonesia & Brazil) or misallocation (China, Hong kong) of free floating capital have created bubble like economies in mainly housing and investments.

The Chinese President Xi have over the last few days indicated that 7.5% no longer is feasible - a Xinhua news story have the headline: Xi says environment for economic development isn't optismistic. This is by "official" China being interpreted to mean a new growth target for 2014 of 7.0% (down from 7.5% recently).

I have pointed out before (using a Barclay chart) that every 3rd plenum have a "growth tax" of roughly 200-400 bps of growth: 

 France, the country, remains the elephant in the room in Europe. Certainly part of core Europe but now trailing their other core partners in both growth, productivity but also on its ability to create a mandate for change which is overdue. Even the EU is now getting concerned about France (and that takes a very negative outlook):

EU issues warning to France over 2014 budget

Finally, Unilever CEO Mr. Polman pointed out that even on the company level EMG data looks vulnerable (Unilever is the EMG company...)

"Chief Executive Officer Paul Polman said the economic slowdown in emerging markets is here to stay as many countries need to enact structural reforms to adjust to new conditions after the boom of recent years"

My friend Mish wrote excellent piece on the whole sector the other day: LINK

A catalyst for the short position being that we broke 100 MA on the close yesterday:

The timing ahead of the ECB could cause some "noise" but a rule is a rule:  What to expect from ECB meeting

Safe travels,

Steen

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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MUST READ..... (BN) Unilever CEO Polman Says Emerging Market Slowdown to Last Y

Key story - Unilever is THE EMG company of the world. The move from "nominal growth" to "quality growth" is on - I saw it recently first hand in Indonesia, but even in Middle East.

Currencies only way they can "adjust" short-term - and in equity space the EMG earners should come under some pressure and soon... Likewise and properly better play is to short the French Luxury makers - and CAC40 direct. Short Luxury and short France - both trades is definitely high on my 2014 list.


Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

Research: http://www.tradingfloor.com/traders/steen-jakobsen
Please visit our website at www.saxobank.com


(BN) Unilever CEO Polman Says Emerging Market Slowdown to Last Y ears

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BFW 12/02 10:19 Unilever CEO Polman Says Emerging Market Slowdown to Last Years


+------------------------------------------------------------------------------+

Unilever CEO Polman Says Emerging Market Slowdown to Last Years
2013-12-02 10:14:32.71 GMT


By Albertina Torsoli
Dec. 2 (Bloomberg) -- Unilever Chief Executive Officer Paul Polman said the economic slowdown in emerging markets is here to stay as many countries need to enact structural reforms to adjust to new conditions after the boom of recent years.
"They are still relatively stronger economies but still fragile," Polman said. "And you see that growth coming off now a little bit, obviously not being helped either by lower demand coming from Europe and the U.S. This will last a few years. And it will only be corrected if some of the reforms have been made in these places."
Unilever, the world's second-largest consumer-goods maker, said Sept. 30 that slowing growth in emerging markets would weigh on second-half sales. So-called underlying sales rose 3.2 percent in the third quarter, the weakest increase in four years and a slowdown from the first-half's 5 percent pace, the Anglo- Dutch maker of Lipton tea reported Oct. 24.
"I am always surprised that I am the one who sort of has to announce there's a slowdown in emerging markets," Polman said, speaking Nov. 29 at a reception where he was awarded the
2013 World Wildlife Fund Duke of Edinburgh Conservation Medal for Unilever's efforts to reduce environmental damage.
Investors have pumped money into emerging markets since 2008, spurred by the liquidity generated by central banks, Polman said. U.S. Federal Reserve Chairman Ben S. Bernanke's statement on June 19 that the Fed may start tapering stimulus efforts this year put pressure on emerging markets, he said.
"People were thinking interest rates in the U.S. would go up again and then money came back to the U.S.," the Dutch executive said. "You saw a lot of these emerging market currencies go down 10 to 15 percent. Fortunately these countries are stronger, so you don't have another Asian crisis."
Polman is the first CEO of a major multinational company to receive the Duke of Edinburgh conservation award since it began in 1970. He spoke in Geneva.
"It's a great honor," he said of the prize. "WWF clearly understood you have to take some risk by working with people, coalitions together to move things forward."

For Related News and Information:
Unilever Sales Slowed in Third Quarter on Emerging Markets NSN MTZP9K1A1I4H <GO> Unilever's Emerging Market Pain Heralds Europe Forecast Cuts NSN MU19SY6KLVTQ <GO> Unilever Tops Locals With Non-Dairy Ice Cream in India: Retail NSN MTPVPP6JIJVY <GO> Unilever Income Statement: UNA NA <EQUITY> FA IS <GO> Top Retail Stories: RTOP <GO>

--Editors: Thomas Mulier, Marthe Fourcade

To contact the reporter on this story:
Albertina Torsoli in Geneva at +41-22-317-9202 or atorsoli@bloomberg.net

To contact the editor responsible for this story:
Celeste Perri at +31-20-589-8505 or
cperri@bloomberg.net










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