Mar 23, 2017 - Market Update

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

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