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Happy Thanksgiving to those that celebrate it, and happy 'half-days' of trading for the rest of us....
Onto the markets, just a quick note to set out our views on a few key instruments. In our view, Gold and Silver seem likely to continue their pullback, with Gold possibly heading for c.1620, and further down to nearer 1500 before levelling off. As readers may note, it is these levels that may start to make us interested. Silver may still test nearer 25. The USD Index (DXY) is likely to represent a safety zone for some time and we expect that it could reach 90 over the next 12-18 months. We remain bullish on GBP vs EUR but having taken our profit some time back at 1.17, we are intending to gradually re-build our position on pullbacks, which could take us to as low as 1.13. We have raised our concerns on the major equity indices in previous letters, and the current action continues to bear this out as being a prudent path. We are still negative on banks and also miners, with some rare exceptions. Some of the low beta sectors are of more interest and as we expect 2012 to be a very messy year, we are not intending to deploy a lot of cash at these levels, instead choosing to stay liquid, picking off opportunities if and when they present themselves. We are closely watching the commodity space, Natural Gas, Wheat and Sugar in particular and are currently treating these tactically as the cross-winds of the MF Global position unwind and the USD strength have injected some considerable volatility. At some point we may establish some medium term long positions but for now we are tackling these both ways.
Meenaz P Mehta
Chief Investment Officer
Axis Investment Management
Happy Thanksgiving to those that celebrate it, and happy 'half-days' of trading for the rest of us....
Onto the markets, just a quick note to set out our views on a few key instruments. In our view, Gold and Silver seem likely to continue their pullback, with Gold possibly heading for c.1620, and further down to nearer 1500 before levelling off. As readers may note, it is these levels that may start to make us interested. Silver may still test nearer 25. The USD Index (DXY) is likely to represent a safety zone for some time and we expect that it could reach 90 over the next 12-18 months. We remain bullish on GBP vs EUR but having taken our profit some time back at 1.17, we are intending to gradually re-build our position on pullbacks, which could take us to as low as 1.13. We have raised our concerns on the major equity indices in previous letters, and the current action continues to bear this out as being a prudent path. We are still negative on banks and also miners, with some rare exceptions. Some of the low beta sectors are of more interest and as we expect 2012 to be a very messy year, we are not intending to deploy a lot of cash at these levels, instead choosing to stay liquid, picking off opportunities if and when they present themselves. We are closely watching the commodity space, Natural Gas, Wheat and Sugar in particular and are currently treating these tactically as the cross-winds of the MF Global position unwind and the USD strength have injected some considerable volatility. At some point we may establish some medium term long positions but for now we are tackling these both ways.
Meenaz P Mehta
Chief Investment Officer
Axis Investment Management
