Following up on this morning's "Euro Just Pips Away from a Short Term Top (EUR/USD)".
From ZeroHedge:
Barclays On The Rally: "Fade It", Because The Summit Is "Not A Game-Changer For The EUR"
With everyone scrambling to buy into the bathsalts rally, and shorts rushing to cover with a panic bordering on a QE-announcement, it is somewhat ironic that today's voice of muted reason comes from none other than Liebor expert extraordinaire: Barclays, whose suggestion is simple: lock your profits: "We remain bearish on EURUSD, expecting it to grind slowly down to 1.15 over the next 12 months. We therefore suggest investors look to fade this morning's European currency strength versus the USD and non European commodity currencies such as the AUD and CAD." Why? They have their listed reasons. The unlisted ones are the same that every other bank has for becoming bearish recently (we have recently listed Citi, Goldman, SocGen and DB to name but a few): for a real fiscal and monetary policy intervention to take place (i.e., a rescue package that lasts at least a few months, as opposed to today's several day max rally): the market has to be tumbling. That, as we have explained repeatedly, is the only way to get a powerful response. Everything else is (quarter end) window dressing.I swiped the headline locution from yesterday's FT Alphaville:
From Barclays:
EUR: EU Summit is not a game-changer for the EUR
Very little progress, if any, on short-term measures was expected from this week's EU summit. However, the conclusions, so far, have exceeded expectations. Risk has rallied as a result. We expect the general improvement in sentiment to have legs because the measures announced tackle the dislocation in the banking sector. Also, later today further agreements on the roadmap towards fiscal integration are possible. We suggest investors remain long cyclical, non European currencies, such as the AUD versus the USD....MORE
Transacting at Libor, bro
