UK creditworthiness under pressure Christian Blaabjerg, Filed in: FX Update 22 May 2009 at 8:36 GMT Non-Independent Investment Research Daily Trading Stance S&P downgraded yesterday the creditworthiness of the UK from AAA with a staple outlook to AAA with negative outlook. GBP could face continued selling pressure. The concern in the market is that this could also happen for the US. US Initial jobless claims was out worse than expected yesterday. Geithner felt compelled to comment on the numbers saying that the Jobless rate could pass 10%. We do expect this to happen - the next question is only when they will be doing another stress test of the US banking system as their assumptions turn out to be too optimistic in the prior one. Equities retraced on this. The Treasury's announcement of next week's auction ($40bln 2yr, $35bln 5yr and $26bln 7yr) made US 10yr and bunds sell-off yesterday. Euro government options expiry today. Be aware of thin market liquidity today as many European market participants are taking the day off following yesterday's bank holiday. Calendar Economic Data Releases Country Time (GMT) Name Expectation Prior Comment UK 08:30 GDP QoQ (1Q) -1.9% -1.9% UK 08:30 Private Consumption (1Q) -1.0% -1.0% US 18:00 Bernanke Speaks at Boston - - Earnings Releases Country Time (GMT) Name EPS exp. EPS prior Comment UK - British Airways - - US - GAP Inc 0.236 0.322 FX FX Daily stance Comment EURUSD 0 1.40 handle in sight. Await reaction from there. Suppt 1.3850 EURJPY 0/- Potential for a dip to 130.25 suppt while 131.70-80 caps USDJPY 0/- Downside still in focus. Immediate target 93.0. Abv 95.30 defers GBPUSD 0/+ Potential for further gains up to 1.5960 while 1.5815 suppts AUDUSD 0/- 0.7810-15 n/term res and may force a slide down to 0.7740. Abv sees 0.7920 Equities Equities Daily stance Comment DAX 0 Sell at the break of 4884 targeting 4857. S/L above 4896. FTSE 0 Sell at the break of 4329 targeting 4295. S/L above 4350. S&P500 0 Sell at the break of 883 targeting 878 initially, 868 finally. S/L above 889. Nasdaq100 0 DowJones 0 Futures Commodities Daily Stance Comment Gold 0/+ Still buy dips to 938-940 for a test of 966.0 res. Stop below 930.0 Silver 0 Res at 14.61 expected to hold. Seen ranging 14.40-14.60 Oil 0 Consolidating 60.5-62.0 FX Options FX Daily stance Comment EURUSD 0 1.40 handle in sight. Await reaction from there. Suppt 1.3850 EURJPY 0/- Potential for a dip to 130.25 suppt while 131.70-80 caps USDJPY 0/- Downside still in focus. Immediate target 93.0. Abv 95.30 defers GBPUSD 0/+ Potential for further gains up to 1.5960 while 1.5815 suppts AUDUSD 0/- 0.7810-15 n/term res and may force a slide down to 0.7740. Abv sees 0.7920 Provided by Saxo Bank Tweet Like LinkedIn Share Google+ Previous Next Comments Please sign in to comment or ask the author a question about this article. Recommended Recommend Unrecommend Recommend Tweet Like LinkedIn Share Google+ Related articles Look for US GDP today Watch out for US housing data today Goldman earnings will direct Europe and US opening today Look for earnings from JPMorgan and US Industrial Production/Capacity Utilization Bank of England minutes the main event today Topics This post appears under the following topics... GBPUSD EURJPY forex AUDUSD macro FX Options commodities FTSE100 equities Gross Domestic Product USDJPY gold silver DAX EURUSD