March 2017 ~ Land of Trading

Wednesday 29 March 2017

Mar 29, 2017 - Market Update

08:54:00 #banks, #Brexit, #Commerzbank, #DeutscheBank, #EUR, #Evans, #Fed, #GBP, #May, #Praet, #Regeneron, #Roche, #Rosengren, #Sanofi, #Scoxit, #SP500, #Tencent, #Tesla, #Tusk, #USD No comments

Short recap

Asia up

Europe opening higher but with caution

Trump revoking pro-climate regulations

…having fun of all those …exits….? Well, me too.

Grexit, Italexit, Frexit, Germanexit, Brexit…and now:

Scoxit – Scottish parliament said yes to second Scottish referendum

UK Gov will not negotiate about it, thus the vote is just symbolic in nature

Norther Ireland looking at joining Ireland to become a part of EU

Seems to have busy upcoming two years after UK triggering Art 50 today

May to speak at Parliament at 11:30 GMT

Formal Brexit announcement at 12:30 GMT at the latest

As at 12:45 GMT Tusk (EU Council President) holds a press conference

GBPUSD down on unofficial Brexit trigger (to 1.2378 from around 1.2600 yesterday)

Tusk to focus on negotiations terms first, the rest may follow

EURGBP – a sentiment test today as the official letter gets delivered

USD turning the corner primarily on Trys yields expectations, general sentiment what is also reflected in important USD pairs

To keep the momentum we need continuation of good data and attractive tax policy terms

Fischer (Fed) seeing two more hikes as right this year

10-yr Trys yield at 2.42%

10-yr Bunds yield at 0.39%

Tesla – Chinese Tencent owning 5% shares what means a stable long-term relationship and fresh capital stream for Tesla

Roche Holding obtained an approval for multiple sclerosis drug from FDA

Sanofi and Regeneron Pharmaceuticals obtained an approval for dermatitis drug from FDA

Deutsche Bank and Commerzbank positive on S&P credit rating upgrade

On the back of a new law in Germany benefiting senior creditors

More and more bankers working for London based banks are getting nervous about what operations will be moved to EU

What in turn puts a pressure on the banks to keep the skilled and experienced employees from leaving

S&P 500 staying above 2350 support (next 2300)

But below the descending trendline

Valuations weighting on the market

Data

GE: Import Price Index – was up +0.7%

US: Pending Home Sales Index – to rise despite shortage of houses

Speakers:

Evans (1320 GMT)

Rosengren (1520 GMT)

Praet (1650 GMT)

Friday – EU issuing a statement on Brexit to define the guidelines

Apr 4 – EU making a formal statement on Brexit about what they want to achieve

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

Mar 28, 2017 - Market Update

08:33:00 #BoE, #CreditSuisse, #Dow, #DuPont, #DXY, #Elliot, #Ericsson, #EURUSD, #George, #Gold, #Kaplan, #Powell, #Qatar, #stocks, #US, #Yellen No comments

Short recap

Asia up on signs of stabilization in US stocks and USD

Europe opening higher

Chinese HNA Group in talks to acquire Forbes

Credit Suisse to make decision on capital increase soon

BoE asked UK banks to take steps their lending activities stay unaffected in case of full Brexit

Dow Chemical-DuPont merger (USD 130 bln) gets a green light from EU on asset sales plan

Westinghouse (Toshiba US) likely to file for bankruptcy today

PE fund Elliot giving the financial hand to a Chinese investors to buy AC Milan

Qatar wealth fund to be present in Silicon Valley

Ericsson under pressure on provisions

Saw some rebound in US stocks but it was weak

In general US stocks seem to be 20% overpriced compared to Europe

Gold – not able to break through, facing the profit taking

Correction can be within the range 1228-1236 despite positive tailwinds

Bunds – saw sharp rejection of 161 level yesterday

As markets may be refocussing more on high-yield space on the back of better macro data from EU

10-yr Trys yield at 2.39%

10-yr Bunds yield at 0.41%

EURUSD

Closed below the high from Dec 8 at 1.0873

200 DMA at 1.0878 and descending trendline kept the bulls

Bit of caution – As Le Pen is still part of presidential race in FR

It is prudent to still take this risk into account

In case of her win, the current rally would be strongly reversed

As the risks would need to be repriced across many asset classes

Betting suggests lower odds to her victory than official polls show

DXY

Got some technical support: from trendlines and 200 DMA

Otherwise can revisit 96 level

Data

US: Consumer Confidence Index – expecting slightly lower but confirming the trend

Fed speakers (GMT):

Yellen (1630)

George (1645)

Kaplan (1700)

Powell (2030)

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 27, 2017 - Market Update

08:48:00 #BoJ, #Brent, #Brexit, #COT, #DAX, #DXY, #ECB, #EURUSD, #Gold, #Merkel, #NATO, #OPEC, #Scottland, #SP500, #trump, #USDJPY No comments

Short recap

Europe opening lower

Brexit – May visiting Scotland to offer more powers

Ahead of Scottish parliament vote on second independence referendum tomorrow

Wake up call for Trump trade after Obamacare repeal vote being pulled off (for the time being)

Risk of other reforms being delayed unless Republicans deliver very quickly

Trump to sign another batch of executive orders on Tuesday to support oil, coal and natural gas industries

Rumours about Trump giving the NATO bill of USD 374 bln to Merkel

Merkel’s party scored win in a local elections

Doubt about Trump trade to have wider implications for US stocks

As equity markets are forward looking and may discount the possibility of lower growth

Financials to feel the pain

S&P 500 – support at 2300 and 2250

DAX – resistance 12 200, former support at 12 100/000 now acting as a resistance

10-yr Trys yield at 2.36% (important 1.30% level)

10-yr Bunds yield at 0.39%

COT (Mar 21)

Institutional investors staying on sidelines, participation very low across commodity sector

USD longs up by 11%

EUR shorts down by 20%

WTI long reduction continued, shorts up

OPEC/Non-OPEC meeting confused the market

No extension, review later

Brent support at USD 50

Breaking USD 49.22 opens the door to Nov low at USD 43.58

Gold – resistance at 1258 (200 DMA)

DXY – H+S getting firmer foot, 200 DMA at 98.56

USDJPY – next support at 109.50 and 108.24 (200 DMA)

Check also 200 and 55 WMA

BoJ – easy monetary policy to stay

EURUSD – 1.0850 broken this morning

High from Dec 8 at 1.0873

200 DMA at 1.0880

Descending trendline around this level too

But still can get a touch above 1.0900 level (1.0910/25)

ECB – if the market attention shifts to macro from political uncertainty (Macron and Merkel doing better), ECB would likely need to pursue a less dovish policy

Data

GE: Ifo Business Climate Survey – no negative surprise expected

EZ: Private Household Sector Loans – expected slightly higher

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 24, 2017 - Market Update

08:50:00 #agreement, #Akzo, #Brexit, #DXY, #ECB, #EURUSD, #Fed, #Gold, #Kuroda, #LVMH, #Obamacare, #Oil, #PPG, #Praet, #RBS, #trade, #Tryump, #USDJPY No comments

Short recap

EU markets opening flat to higher

US stocks no clear direction but highest valuation in 15 years

Institutional investors overweighed in stocks despite seeing high valuations

Risk of crowded trade from short side on the horizon if Fed keeps hiking and Trump doesn’t deliver

EU stock and bond markets look completely mispriced

To watch EZ economic data, FR elections and rise of inflation (lower oil can mute it)

UK’s Brexit bill to be around GBP 50 bln according to Juncker

US to review 14 free trade agreements to benefit US companies

US House voting on Obamacare repeal – Republican debate to continue today

As mentioned yesterday, politicians have a show time but will get it done

Expecting vote between 1800-2000 GMT, to be a test of discipline for Republican party going to debates on tax and reform bills

Meanwhile, Trump was out saying he will let Obamacare in place if the vote is not successful

And move over to tax reform, what was a strong message to Republicans

Truly speaking, this vote is not a such weight lifter for the economy as tax, fiscal or infrastructural reforms are

Kuroda – QE in place as inflation far from 2%

Praet (ECB chief economist) – QE exit premature

No inflation/deflation risks in EZ

Job market still lagging

IT having structural problems, Lira is not a solution

PPG closer to Akzo Nobel takevover (EUR 23 bln) as the largest shareholder is in favor

LVMH doing well in China

RBS to close branches and shed jobs

Deutsche Bank to move its London’s HQ to new place

Oil higher on lower Saudis export to US

USD 50 should act as a short term support

10-yr Trys yield at 2.43%

10-yr Bunds yield at 0.43%

DXY found support above 99.26 (61.8% Fibo) and above triple bottom area

Fed balance sheet cuts talking making the rounds but real cuts will steepen the yield curve what in turn will support the USD

June hike is 50/50

EURUSD waiting for Obamacare vote

May be posed for higher move short term

But US-GE yield spread tells the other story medium term

USDJPY towards 111.60 resistance

Gold daily - strong resistance at 200 DMA and descending trendline

Data

EZ: PMI to decline slightly

US: Durable Goods Orders to increase but stay flat on y/y

Fed speakers:

Evans (1200 GMT)

Bullard (1305 GMT)

Dudley (1400 GMT)

Williams

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 23, 2017 - Is Czech Central Bank ready to remove the EURCZK 27.000 floor?

15:33:00 #CNB, #Czech, #CZK, #EURCZK, #floor, #peg, #removal No comments

Well, as mentioned in our Market Update yesterday link, something must be baking no doubt...

There many traders asking the question how to trade the move but unfortunately, there is a huge two-way risk related to unpegging of EURCZK. As it is getting very crowded and nothing has been going on (spot wise) except for Czech National Bank regularly intervening there, the risk of abrupt move within almost inexistent liquidity is very high. Thus many brokers charge high margin requirements on spot trades or went manually on forwards and completely removed option trading.

More and more traders question the date when CNB will remove the peg. Wouldn’t be surprised if central bank moves soon (already in April/May) what is before the summer and well before next parliamentary elections in the fall this year in Czech Republic. It can do so even in between the official rate announcement days as the CNB may be pressed by inflation pressure.

Next CNB meeting is taking place on Mar 30, what is right before the end of the period (Q1 2017), thus before the deadline the CNB gave to market to keep the EURCZK floor at 27.000 intact. In other words we are getting closer as the following meeting takes place May 4.

Another date to watch may be Apr 10, when the March inflation data will be released. Meanwhile the year on year inflation moved to 2.5% level what is above the target level of CNB.

Read more in our article from Jan 2017 link

How to trade it? All of us recall the CHF event and let's believe CNB won't follow this example either. On the other hand, trades have learnt the lesson or hope so, and are aware of the potential risks. In other words, the first move will likely be down, followed by eventually swift correction back higher, bit of up-and-down yoyo...etc., and then we may get settled either way.

It is hard to say what the target lower level may be but market may still find, for example the 28.000/500 appealing to enter the shorts.

On the lower end we may look at: 26.600/650, 26.000, 25.500 or 24.000/300

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 23, 2017 - Market Update

09:31:00 #Bunds, #ECB, #Enbridge, #GE, #Gold, #House, #Iron, #Kaplan, #Kashkari, #LTRO, #Nikkei, #Obamacare, #OPEC, #SP500, #Spectra, #trump, #USD, #VIX, #Westinghouse, #Yellen No comments

Short recap

Asia slightly up

EU opening higher despite risk off sentiment still present in the markets and not a very great start of Chinese earnings season (Tescent disappointed)

US session showed hesitation with rebound in equities

As only techs experience a correction higher while financials, energy and materials ended the day on a lower note

Banking lobbying groups do not see any revamp of Dodd-Frank soon, may take the initiative and prepare their own proposals

Donation scandal in Japan

Sentiment in financials (banks) can be effected by the last round of LTRO from ECB

Consensus looks at allocating EUR 110 bln (last time it was EUR 62 bln)

Two more regional banks in Italy ready for a bail out what may not be welcome by EU regulators

Westinghouse Electric (Toshiba US) likely facing bankruptcy

GE linking top execs bonuses to cost cutting success

Enbridge looking to cut 1000 infrastructure positions after taking over Spectra Energy

S&P 500 below 2350

Nikkei 225 still flirting with 19 000, the 18 700 is the next

VIX (12.66) and stronger JPY not proving the rebound yet

Bit of fundamental view: Fed on the path of rising rates, political risks in Washington, not clear signs of what Trump really wants to do, risk of wave of protectionism, debt burden is huge around the world, population in developed markets getting older, overall there is an excess of production capacities

Gold taking a break before 1250 (50 % Fibo) and 1258 (200 DMA)

At the moment 200 DMA needs to be broken for further buyers to get attracted

Iron ore keeps falling

Supported by China tightening monetary conditions to address excessive leverage

Also refocussing away from infrastructure and property investments what in turn has negative effects on commodities (iron ore including)

OPEC meeting in Kuwait this weekend

10-yrs Trys yield at 2.41%

10-yr Bunds yield at 0.41% - lower after indecision from previous sessions as the higher rates expectations and QE coming to an end still present in the market

Lower USD making monetary conditions more accommodative

Data

UK: Retail Sales to accelerate

EZ: Consumer Confidence Indicator higher print is expected

Fed speakers: Yellen (1245 GMT), Kashkari, Kaplan

ECB speakers: Lautenschlaeger (1500 GMT)

US House voting on Obamacare repeal – expected at 1500 GMT but still not specific time is set. The leaders need to make sure they will have sufficient votes before actually, calling for a vote

Super important event in terms of whether Trump can/is able to deliver or not

Or in case of yes vote how it will turn out with respect to different lobby groups around Republican party

As the US political system is not complicated enough, Trump needs to win the votes of sceptical members of the House Freedom Caucus

Should you have any questions feel free to contact us anytime.

Good luck Champs!

Mr Hawk

Mar 22, 2017 - Market Update

08:28:00 #Abe, #Apple, #Brexit, #Canada, #ECB, #EURCZK, #EURUSD, #FiatChrysler, #Gold, #Goldman, #Nikkei, #Obamacare, #Oil, #Trys, #USD, #USDJPY No comments

Short recap

Europe opening lower

Asia down as markets doubt about the Trump’s ability to bring real pro-growth policies in life. In other words the after Trump victory reflation trade is loosing momentum. Nikkei testing the important psychological level 19 000.

The US markets suffered heavy selloff that was also accelerated by negative comments from US administration about the ban of nuclear weapons.

Abe supported open markets policy in Brussels yesterday

EU-JP working hard on a trade pact

US regulators pushing for a risk reduction via making the securities settlement time shorter (2 instead of 3 days)

Trump putting pressure on lawmakers to vote for Obamacare repeal bill as it is a first major hurdle to implementing his agenda. Bear in mind that there is Senate and two Houses of Congress to get it through.

Brexit – 27 remaining members to meet on Apr 29 (note Art 50 to be triggered on Mar 29)

London based banks not to face lengthy set up process while moving to EZ

Goldman Sachs to start moving staff to EZ soon

UK banks to face investigation in relation to Russia money laundering activities

US banks hardly hit during US session (down 3%) as markets losing faith in Trump pro-growth policies, thus reflation trade

We may get ready for a 5-10% correction

S&P 500 below 2350 support

After closing the investigation of Opel (GM) in emission scandal yesterday, the French authorities continue with Fiat-Chrysler

Apple is out with newer version of iPad, priced at USD 329 (lowest in Apple world)

New opportunities for global investment banks open in Canada as the appetite for M&A from Canadian companies and pension funds is rising

Oil still feeling the oversupply

Russia open to support the OPEC/Non-OPEC deal

Gold – finding ideal support from risk off (lower stocks, USD, yields and mounting political risks in US)

EURUSD – important 1.0800/50 if broken we aim for 1.1000 and higher

But if the rally in EURUSD is based on political risk off how sustainable is it?

At the moment the Le Pen defeat is not a done deal yet, just recall the Hillary Clinton winning the debates but the winner was…

USD – suffering against EUR, JPY and GBP, while stronger against EM currencies (reflation trade fading away)

USDJPY – 111.60 important, driven by yields

10-yr Trys yield at 2.43% (mid band of 2.30%-2.60% range)

10-yr Bunds yield at 0.43% (flat)

ECB is “testing” the market reaction to possible taper announcement at Dec 2017 meeting with a 10 bps rate hike

EURCZK – at the beginning of this week we saw a significant increase in activity on the bid side across all forward maturities. At the same time the flow was also much higher than usual, what may continue as a part of risk off, reflation and EM flows, not to mention, of course, the likelihood of CNB to remove the EURCZK 27.000 floor this year.

Data

US: Existing Home Sales – expecting a small decline

Villeroy (ECB) to speak (0830 GMT)

Lautenschlager (ECB) to speak (1130 GMT)

Thursday: US House voting on Obamacare repeal

Super important event in terms of whether Trump can/is able to deliver

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 21, 2017 - Market Update

09:04:00 #BNP, #Brexit, #DAX, #Evans, #FBI, #Fed, #Gold, #Macron, #Nike, #Oil, #Porsche, #SP500, #Trys, #Weidmann No comments

Short recap

Asia printing highs

EU markets opening higher

Macron the winner of French presidential debate but Hillary Clinton was too

Weidmann (ECB) current policy is appropriate

Evans (Fed) will make decision about next hike in June

Will know more about financial and fiscal conditions and data

A small reaction to his speech only

UK to trigger Art 50 on Mar 29

FBI investigating links between Trump’s campaign and Russia

China to open further its economy to foreign capital (services, manufacturing, mining…etc.)

To support foreign securities listings and investments in science, technology and infrastructure

All of that seems like the opposite to Trump world

BNP Paribas ready to fill the gap in investment banking field in Europe

As it sees opportunities after its rivals scaled back activities there and in a hunt for an increase in revenue

Porsche family interested in Porsche shares owned by Piech family

Nike reporting today, struggling with increasing competition from Under Armour and Adidas

Eli Lilly having positive results from a combination of drugs treating breast cancer

Opel cleared in France in diesel emission investigation

S&P 500 still in uptrend

Support at 2365 then 2354

DAX still in uptrend channel

Support rising trendline, 11 930 and 11 480/500 levels

Oil not much upside potential

Likely to settle in lower range

Gold neutral

Levels: 1220-1238 then 1261 and Fibo levels

10-yr Trys yield at 2.48%

Saw additional strength in Trys as June hike priced lower at 40%

Risk of Trys yields to decline to lower range of 2.30%-2.50/60% band

Data

UK: Consumer Price Index expected to rise above 2%

UK: CBI Industrial Trends Survey ready for a slight decline

US: Current account expecting deficit to widen

JP: BoJ Minutes

Speakers (GMT)

BoE Carney (1035)

Fed: Dudley (1035), George (1600), Mester (2200), Rosenberg

Central banks’ future action:

Fed toward 3%

BoE not before late 2018

ECB and BoJ no action

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 20, 2017 - Market Update

08:52:00 #Abe, #Bombardier, #Brent, #Bunds, #DeutscheBank, #DXY, #FOMC, #France, #G20, #Gold, #LePen, #Merkel, #Mnuchin, #Oil, #Sinopec, #SwisRe, #Tesla, #Trys, #USD, #WTI No comments

Short recap

Asia mixed after last week

EU markets opening lower

G20 take away:

Free trade short of support

Mnuchin to correct imbalances – but the simple message to US is: “Consume less, Save more”

End of globalization trends? Or end of US on globalization map?

Merkel and Abe showed strong support for free trade on Sunday (after G20)

G20 outcome is negative for stocks

FOMC feelings still present in the market

Positive on EU stocks (if French elections positive) but higher EUR is a risk

US stocks negative view, may be playing with put options going to Q2

Deutsche Bank to issue news shares worth of EUR bln as a part of strategy shift

Swiss Re to focus more on tailor made solutions to generate more profits out of the deals

Tesla raised USD 1.2 bln to fund its activities, especially Model 3 and battery production

The proof that investors are still interested to participate at Tesla story via shares or convertible notes

Sinopec close to buying refinery from Chevron in South Africa (USD 1 bln)

Bombardier still struggling to handle the deal with Toronto Transportation Agency worth of CAD 770 mln

Oil – speculative shorts double while longs were cut (COT report)

May be pointing to new weakening cycle in oil as US shale production keeps rising

Critical levels: WTI USD 51.15 and Brent USD 48

Gold – also experienced net long positioning cut by almost the half (COT report) going to FOMC last week

Risk to upside move higher on weaker USD, geopolitical risks and huge demand from India

Levels: 1238 (61.8% Fibo), then targeting last high at 1263

USD close to key support levels, trading below 100 DMA

DXY 99.26 (61.8% Fibo), H+S, descending support line around 98.90

Few Fed speakers this week with Yellen (Thu) can clarify the FOMC stance
Important event for USD will be Obamacare repeal vote on Thursday
If passed, likely USD supportive - a sign of Trump having support for his further policies

EURUSD not clearly ready to break 1.0800/50 on political risks ahead of French elections

But market keeps pricing out the risk of Le Pen win despite her advances in the polls

Security question back on the table after shooting at the airport in Paris

10-yr Trys yield at 2.49%, failed to break clearly 2.60% level again

Back to 2.30%-2.50/60% range

Bund yields rising at short end while longer end is unchanged

10 bps rise in EZ rates by Jan 2018 is already priced in

Visco (ECB) – rising rates and terminating QE can be closely linked

Data

EZ: Labour Cost Index – expected to go higher

US: Chicago Fed National Activity Index – expected to go higher

France – election debate tonight

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 19, 2017 - (Chart of the Day) US 10 year T-Notes - Top down analysis

14:21:00 10 year t-notes, chart of the day, price action, supply demand, technical analysis, us yields No comments

Hi,

today we will look at the 10 year T-Notes charts: weekly, daily and intraday.

Latest buying wave ( yields sell-off ) after hike ( some called it "dovish" hike ) did not hurt bears in my opinion, simply mkt is looking for supply lvls ( for more details pls check 30 min chart below ) and I do expect lower levels to come.

Join Us:

FREE LIVE TRADING ROOM - click here

Weekly chart:

Daily chart:

30 min chart (possible intraday levels and scenarios):

Please don't hesitate to contact Us should you have additional questions.
We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Happy Trading

Mr Price Action

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom, Blog: landoftrading.blogspot.com

Mar 17, 2017 - Land Of Trading Forex Live Trading Room Edu Market Makers ...

12:36:00 dxy, eurgbp, eurusd, forex, Forex Trading, fx trading, live market coverage, live trading room, market makers method, price action, supply demand, usdjpy No comments

Hi,

This time we were covering ECB rate decision, main focus on EUR crosses, we were looking for some kind of market makers manipulation and... finaly some trades hit entry lvls.... next day on Friday after NFP :)

Join Us and check how and what we are doing

FREE LIVE TRADING ROOM - click here

Mar 17, 2017 - Market Update

08:49:00 #bonds, #budget, #China, #defense, #Draghi, #DXY, #ECB, #EURUSD, #G20, #Gold, #Mnuchin, #Nowotny, #replacement, #SP500, #valuations No comments

Short recap

Asia cautious before G20 FinMin and central bankers meeting (Fri/Sat)

EU opening lower

Foreign investors to be able to by Chinese mainland bonds in HK (important change going forward)

G20 – not high expectation, protectionism, free trade and currencies the main themes

US Treasury Secretary Mnuchin made “diplomatic comments” on USD and good international trade relations

US budget – Trump looking at heavy spending for security, topped with cuts in green projects, diplomacy and foreign aid programs

This may back fire to US as they will lose the international presence to mainly China

New approach from US to North Korea coming

US defense stocks to do well (draft of new budget) but trading at high valuations

S&P 500 weak with 2370/80 support

EU equities – as mentioned few time before EU stocks may be an interesting opportunity on the back of short covering after eventual Le Pen defeat

Institutional investors and HF staying short EUR and hedging stock positions for now

What may be reversed after FR elections

Gold – correction higher coming to an end as weaker USD is being offset by higher bond yields

Still neutral but geopolitical risks and potential stock market correction may push gold higher

Nowotny knocked it up yesterday evening – as ECB rate increase may be on the way

Could rise deposit rate before main refinancing rate and end of QE

His comments helped EUR and Bund yields higher

10-yr Bunds yields erased half of the FOMC losses

Now 0.47%, on the way to 0.50%

10-yr Trys yields higher at 2.53%

In between the lines there was also “likely” discussion about who will replace Draghi in 2019

…now it makes sense why Nowotny’s rhetoric was so strong

On the contrary:

USD pullback not to last long as it is getting expensive as it is getting expensive to finance short USD positions

FX markets not reflective yet the rate differentials

Rates not reflecting the 2018/19 dots fully

USD is the 3^rd highest yielding currency among G10

DXY support at 99.26 (61.8% Fibo), then 99.00

Zone of uncertainty, range to decide about next USD direction

USD needs to find support around these levels

Otherwise we have already reached a cyclical high

Data

UK: Bank of England Quarterly Bulletin – anything on future rate hikes?

US: Industrial Production – expected further increase

US: University of Michigan Consumer Sentiment Index – a negative surprise may be coming

Merkel meeting Trump today

Mar 17-18 – G20 FinMin meeting

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 16, 2017 - Trump to announce the budget...

09:31:00 #budget, #trump No comments

Trump to annonce the budget at 1100 GMT today (Thu)

Good luck Champs!

Mr Hawk

Mar 16, 2017 - Market Update

09:17:00 #Audi, #DAX, #Dutch, #EDF, #EURUSD, #Fed, #FOMC, #FXoptions, #Gold, #H&M, #Inditex, #Kuroda, #SP500, #trump, #Trys, #USDJPY, #vols, #Zara No comments

Short recap

Asia took the inspiration from Wall Street on dovish sounded Fed

EU opening higher on significant repricing of equities after Dutch elections and Fed

The Dutch stayed smart and said no to nationalism, thus sending the wave of relief across Europe

Fed still on the safe side

Hiked 25 bps, still sees 3 hikes this year as economy is doing well

On track to reach 2% inflation target, outlook for hikes/pace unchanged

Overall positive FOMC (in line) but what surprised many was no upgrade to the outlook/pace of hikes (dots) for 2017/18 despite the stronger data in Jan/Feb

That may prove that Fed is open to create asset bubbles and accept higher inflation over dumping the growth

Next hikes likely in June and Sept, Dec may bring balance sheet reduction talk

S&P 500 eying 2400

DAX to retest the April 2015 highs at 12 400

And may find additional support from another rise in car sales in EU (proving that economy is doing well)

Inditex (owner of Zara) doing better than H&M on the back of growing online business and better presence in emerging markets

Audi under emission scandal scrutiny

EDF working hard to put back to use 4 nuclear reactors after technical issues

FX – we need to respect the magnitude of the moves

EURUSD – back to the range 1.0500-1.0800/50

FOMC and Dutch election risks are off

Now we have Trump to watch as the importance of Fed is much lower as per their data dependency

But only until another round of speculations about June 14 hike re-emerge again

USDJPY – to follow yields, back to the range now

May get lower on yields even to touch the 111.50 level

Kuroda sees 1% inflation in 2018

FX options

Vols lower across the board

1m EURUSD down to 6.7% (lowest since Sep 2016)

1m USDJPY down to 7.9% (lowest since Dec 2015)

On the other hand overnight vols up on central bank meetings:

EURNOK, EURCHF, EURGBP, USDTRY - all up

Gold – fully depending on USD and yields

1221 important for further move up

But geopolitical risk of nationalism in EU receded

10-yr Trys yields at 2.52%

Experienced covering of shorts in Trys yesterday (strongest move since June 2016)

Questions – how durable this move is?

FR-GE yields spread below 60 bps on lower Le Pen fear

Data

BoJ meeting

SNB meeting (to be watched as EURCHF is not behaving in a normal way)

BoE meeting – no change expected

Trump to present budget (1100 GMT)

US: Housing Starts – expected slightly higher

US: Job Openings & Labor Turnover Survey – expected a small dip

Mar 17 – Merkel meeting Trump

Mar 17-18 – G20 FinMin meeting

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 15, 2017 - Trump to announce a tax reform...

12:12:00 #tax, #trump No comments

...rumors based on leaked info: Trump to announce a tax reform at 1300 GMT today

Good luck Champs!

Mr Hawk

Mar 15, 2017 - FOMC hiking...and EURUSD towards 0.9500 ?

11:49:00 #EURUSD, #Fed, #FOMC, #hike, #trump, #Trys, #yields No comments

...a long awaited "D" day is here again:

EURUSD – crucial for bulls to stay above 1.0505/15 level

Still within the wider range 1.0500/1.0850

Tomorrow’s trading (after FOMC) to show further direction

But wouldn’t be surprised if we stayed range bound again

Base setup – a contrarian view:

ECB can not be dovish going to G20 and on German higher rates hopes

Should Germany want higher rates and higher currency, the Germanexit needs to take place

USD not reacting to strong data doesn’t mean bearish view

Monthly chart setup showing strong demand around 1.0500 level

FOMC can give the confirmation to break the level and head to parity

Than to 0.9500 in medium term

Likely this move will be accompanied by spike toward 1.0750/0850 as market will look for liquidity

Yields expected to spike up but correct in the coming days (as history shows)

10-yr Trys yield likely to test 2.64% level that contained the recent selloff

If Fed not convincing about higher pace of rate hikes due to Trump policy uncertainty

USD selloff to follow what will hurt more then stronger currency

Looks like being bullish USD is an edge and market is positioning for weaker USD

On the other hand ECB and FOMC will need to take into account lower oil prices

And their impact on inflation at some point

...also today:

Dutch elections (polling stations close at 2000 GMT, first exit polls to start right after)

US debt ceiling deadline

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 15, 2017 - Market Update

09:20:00 #BoE, #BoJ, #Brexit, #China, #Dutch, #ECB, #EURUSD, #Fed, #FiatChrysler, #FOMC, #guidance, #hike, #Oil, #S&P, #Safran, #SNB, #Trys, #Volkswagen, #Zodiac No comments

Short recap

Asia saw some profit taking ahead of FOMC

EU stocks opening higher

EU may officially authorize the start of Brexit talks on June 20 meeting

China keeps building in disputed South China Sea

Interesting to see extremely low level of volatility across many asset classes despite Trump and his policies

May be something is already boiling and FOMC tonight will be the trigger

Oil volatility giving the lead to equity markets

Lower oil may be a new catalyst for stocks

S&P 500 levels 2350/2400

Would need a strong impulse from FOMC to break 2400

US tech and healthcare overstretched and most sensitive to any correction

Volkswagen still recovering from diesel emission scandal and seems to be motivated to search for a tighter cooperation with other big names in the industry, like Fiat-Chrysler for example

Safran still interested in Zodiac Aerospace

Credit Suisse Fear Barometer (S&P500 puts to calls) strongly up as investors pay more for downside protection

EURUSD – crucial for bulls to stay above 1.0505/15 level

Still within the wider range 1.0500/1.0850

Tomorrow’s trading (after FOMC) to show further direction

But wouldn’t be surprised if we stayed range bound again

Base setup – a contrarian view:

ECB can not be dovish going to G20 and on German higher rates hopes

Should Germany want higher rates and higher currency, the Germanexit needs to take place

USD not reacting to strong data doesn’t mean bearish view

Monthly chart setup showing strong demand around 1.0500 level

FOMC can give the confirmation to break the level and head to parity

Than to 0.9500 in medium term

Likely this move will be accompanied by spike toward 1.0750/0850 as market will look for liquidity

Yields expected to spike up but correct in the coming days (as history shows)

10-yr Trys yield likely to test 2.64% level that contained the recent selloff

If Fed not convincing about higher pace of rate hikes due to Trump policy uncertainty

USD selloff to follow what will hurt more then stronger currency

Looks like being bullish USD is an edge and market is positioning for weaker USD

On the other hand ECB and FOMC will need to take into account lower oil prices

And their impact on inflation at some point

Data

US: Consumer Price Index – expecting to touch 2.7%

US: Retail Sales – to easy slightly but keep rising

FOMC – 25 bps hike expected

But the wording on the pace of future hikes the most important

Dutch elections (polling stations close at 2000 GMT, first exit polls to start right after)

US debt ceiling deadline

This week is busy:

Mar 16 – BoJ meeting (right after Fed hiking…)

Mar 16 – SNB meeting (to be watched as EURCHF is not behaving in a normal way)

Mar 16 – BoE meeting

Mar 17 – Merkel meeting Trump

Mar 17-18 – G20 FinMin meeting

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

Mar 14, 2017 - Market Update

08:48:00 #Blackstone, #Brexit, #DHCorp, #Dutch, #EUR, #FTSE, #FXoptions, #GBP, #Gold, #Intel, #Mobileye, #MorganStanley, #Mylan, #Roche, #USD, #Vista, #VIX, #vols No comments

Short recap

Europe opened lower

Brexit bill approved without any amendments – victory for May

Not to be invoked before Mar 27

FTSE pushed to retest the highs

14 mln Americans to lose medicare coverage is a bit bitter pill for Trump and his administration to swallow

Merkel to meet Trump on Friday instead of today due to flight cancellation (NY area bad weather conditions)

Intel buying Mobileye (USD 15.3 bln) to enter the field of autonome driving with direct competition of Nvidia and Qualcomm

Building a one place to do get all, so car makers can get all what they need in driverless technology and equipment

Mylan settled with Roche to produce a biosimilar version of breast cancer drug

Vista Equity Partners buying DH Corp (CAD 4.8 bln) to bet on fintech future

Morgan Stanley taking wealth management more digital and hiring tech specialist to train advisors

Blackstone to set up EU headquarters in Luxembourg

US cyclicals reversed yesterday and VIX dropped, proving we are in a bullish trend going to FOMC

EUR – a nice correction of Friday move in many crosses

But let’s wait for FOMC and market reaction

Thursday to be a “D” day (decision day) for EURUSD and its direction

USD – getting muscles ahead of FOMC

FX options

Vols keep falling with Implied still above Realized

Despite risk events like Dutch elections and FOMC

Once these events are off the table, expecting further drop in vols

Looking further to French election vols on election days decline in line with overall market

Seeing the vols cheap considering that Le Pen is still strong part of the presidential race

May be vols pricing is derived from current market sentiments? It doesn’t really make sense.

GBP vols no reaction to Brexit bill approval

Just spot dropped to 1.2123 from around 1.2200

Vols in line with the market heading lower

Trys and Bund yields higher (2.62% and 0.48% respectively)

Peripheral spreads unchanged, waiting for Dutch elections tomorrow

GE-FR spread steady at 61 bps, to watch reaction to Dutch elections results

Oil still second guessing on how big and sustainable the supply overhang is

WTI and Brent oversold, resistance 50.60 and 53.30 respectively

US shale production rising

Gold range bound

Levels: 1177, 1193 and 1210, 1221

Data

GE: ZEW Economic Survey – expecting higher

EZ: Industrial Production – expecting higher

US: NFIB Small Business Optimism Index – to keep positive

This week is busy:

Mar 13-14 – US budget draft to show first details of Trumps stimulus plan

Mar 15 – FOMC (25 bps hike expected)

Mar 15 – Dutch elections (polling stations close at 2000 GMT, first exit polls to start right after)

Mar 15 – US debt ceiling deadline

Mar 16 – BoJ meeting (right after Fed hiking…)

Mar 16 – SNB meeting (to be watched as EURCHF is not behaving in a normal way)

Mar 16 – BoE meeting

Mar 17 – Merkel meeting Trump

Mar 17-18 – G20 FinMin meeting

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

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