Time to Take Risk Off the Table

Sydney Harbor Bridge & skyline
Scott E Barbour | Photographer's Choice | Getty Images
Sydney Harbor Bridge & skyline

Participation in the Greek debt deal looks good, but pitfalls still lie ahead, this strategist says.

The euro is on a roll today, what with investors anticipating healthy private-sector participation in the Greek debt-swap deal. But Willie Williams, director of institutional derivative sales at Societe Generale, wants to take away the proverbial punch bowl.

"I think we can continue to see a bit of a relief rally from here, but I still think there's a lot on the table that could send risk trading lower," he told CNBC's Scott Wapner.

In particular, Williams thinks nervousness about nonfarm payroll data in the U.S. could hurt investor sentiment, and if a coming report from China shows sufficient inflation, he thinks the Chinese will be less likely to cut interest rates, which would also dampen risk appetite.

To get ahead of the sentiment shift he anticipates, Williams wants to sell the high-yielding, risk-sensitive Australian dollar against the safe-haven Japanese yen. He recommends entering the trade at 86.50 with a stop at 88.00 and a target of 81.00

You can watch the discussion on the video.

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