Strategic trade
Trade view / 29 April 2015 at 9:56 GMT

#SaxoStrats: Long USA, short Europe

Head of Equity Strategy / Saxo Bank
Instrument: SP500.I
Price target:
Market price:

The 12-month price-to-earnings ratio between US and European equities has collapsed to 2.1%, down from an average of 18.1% in 2006-2011. Our view is that US equities should trade at a premium due to higher profitability, better visibility, higher growth, etc.

For this reason, we are looking to short Eurozone equities via the db x-trackers Stoxx Europe 600 UCITS ETF (DX2X:xetr) while going long on the S&P 500 (SP500.I).

We will hedge our FX exposure by purchasing EURUSD (three-month forward rate) in an amount equal to the euro value of one leg.*

(* Note that is only necessary if the short STOXX 600 position is in the cash instrument. When it is in the CFD, it is not.)

Management and risk description

Key risks include the deterioration of US fundamentals relative to their European counterparts.

S&P 500 vs. STOXX 600
Create your own charts with Saxo Trader click here to learn more. 


Entry: Sell 26 units of the ETF (DX2X:xetr) for every one long S&P 500 (SP500.I).

— Edited by Michael McKenna

For more on equities click here.

Non-independent investment research disclaimer applies. Read more
Simon Nulty Simon Nulty
I thought SAXO was bullish on EZ with confluence of depreciating EUR boosting exports and QE. Has this position changed? Are you still expecting 40-60% upside in 2015?


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail