Liar Liar

Sorry, sorry friends!

Been travelling trading like a madman, so have not been able to "justify" my views on-line, hope to be back into it this week, so here is my 10 min QUICK-AND-DIRTY views:

Foreign Exchange:

Think market is getting ready to "attack" all-time high, based on a number of things but mainly the mere fact that ECB will hike and FED will not in 100 years risk anything by hiking.

The retractment of former hawkish comments from Fed in Was. Post yesterday and FT/WSJ today seems to confirm this.

We are long, again, EURUSD, EURGBP (from today on weaker than expected BOE outlook).....long GBP p JPY c, dlt 10 - from 2 figures higher - think this one could move to 180 over next 2 month - as market comes back down to earth.....

Fixed Income

Bought 2- and 10 years this morning as we had the above "leaks" but also due to divergence in 10 y contract. Market is SERIOUSLY ahead of themselves on yields.......

Mean reversion in 10 y notes indicate 4.30% as hard roof... 3.70% the next target....

Still LOVE individual corporate bonds - pharma, natural resources...

I note several leverage mortgage fund is under severe pressure both here in Scandi-land but also across Europe. Fixed income funds getting KILLED.........Yield curve inverting takes the European banks into serious earnings crisis......

COMMODITIES

Looking to see if 132.50 ish holds today in August contract, if so, I am going long into 145-155 range... next..

Iowa floated - major issue for production in the US - NBC News got segment EVERY day this week how to SAVE money on groceries! If that is NOT telling I do not know what is!

DBA (ETF still excellent play)

EQUITY

Been massively short banks, mainly LEH, DBK and BARC - closed all of them, waiting for GS results today, focus now on European banks for me - the inverted yield curve is slow and awfull grind for EURO banks - funding is an issue again - watch how SWAP rates expanding..

Short small STOXX 50 - took of large DAX put play (with profit for once!) - looks to like bifurcation from here:

1. Rebound, based on short-term oversoldness - reaction 2-3% up before final 5th leg down...

2. Directly lower - it seems, even on days Crude tanks, the market is extremely heavy ........

I am 50/50 on those two - and awaiting clarification - 1367/72 close will indicate scenario 1 in play....

Net long individual stocks: pharma, Water, resources, and steel - hedge with short S&P.....

If first scenario plays.. merely taking hedge of......

OVERALL:

This is not time for momentum in stock market -deflation history returns are: -3.0% y-o-y, so make damn sure you like your stocks before commiting.

Final notes: Like EURGBP higher to new high - like JPY exposure. Playing FI from mean reversion side . Open on equity awaiting "catalyst" for 5th and final clean-out of downside - possible below March low...on LEH or similar story...

"Announced hikes" being taken back from central banks - politicians in P.I.GS countries standing on the ready to fight Trichet!

I am writing extensive report on my US visist - let me prewarn you its not NICE reading :-)

Good luck,

Steen