Playing the euro devaluation

Posted on 27. Dec, 2011 by Riskelia in Weekly Focus

The bullish dollar theme is undeniably linked to the “risk off” mode. As illustrated by figures 1 to 3, the explanatory factors of the G10 Currencies vs. USD theme comprise always equities factors, commodities themes, worldwide inflation bonds and short term interest rates differentials. Among the different parities vs. the dollar, the AUD is most [...]

Is dollar more precious than gold?

Posted on 20. Dec, 2011 by Riskelia in Weekly Focus

For the first time since the August 2008 deleveraging, the gold trend has gone below 10%. The recommendation is still in positive territory but it is about to go negative as showed in figure 1. Even more worrying, we come from a situation where the bubble was nearing 80%, reflecting extreme herding behavior and high [...]

Is defensive investment the best attack?

Posted on 13. Dec, 2011 by Riskelia in Weekly Focus

As most investors focus on high profile and volatile assets such as geographical benchmark equities, commodities and high yield, all our indicators point towards defensive investments:

Inflation bonds
Emerging bonds
Defensive equities (low beta) such as consumer staples and health care sectors

Among the Radar’s 30 top positive bets, six belong to a ‘defensive category’, which can be defined [...]

The euro devaluation process has started

Posted on 06. Dec, 2011 by Riskelia in Weekly Focus

It is often said that the EURUSD is a “risk on” asset. When looking for assets that are the most explanatory of EUR/USD returns, we find in decreasing order the World Inflation Bonds, the Crude Oil WTI and the spread Euribor vs. Eurodollar (figure 1).

The first two factors represent monetary effects characterizing the well-established inverse [...]