More negative stories out of Hungary and Romania. HUF has now dropped 5% in two days and RON is under pressure as well. Both CDS prices are sky-rocketing.
The EUR is dropping again and the USD (and JPY) is king. The trend in VIX is higher and long-term trend indicators are now bearish on stocks.
We maintain a bearish stance on equities and believe that 1041 in S&P500 will be tested this week.
German 10-year break-even inflation rates dropping to 1.63% – and we still advice especially European investors to prepare for more disinflation.
Volumes are continuing higher as EUR / USD makes new lows. RR have moved significant further towards EUR puts as a result of ever increasing interest in downside strikes. These elements together say That we still have a long way to go on the downside.
Saxobank
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