Short recap
Asia up on better steel industry performance that pushed
China factory activity higher
Europe opening mixed
Trump's head of communication is leaving – who knows why?
Wouldn’t be better if Trump has left and all the other staff
members stay? The problem is solved then…
USDCNH down as overnight funding rising
EU Commission proposing EMU gov debt securitization
(thus packaging debt of different countries together)
After GE refused the idea of Eurobonds
Equities
Vivendi closer to controlling Telecom Italia
on EU antitrust approval
Struggling IT banks Banca Popolare di Vicenza and Veneto
Banca – one of the options is to close them if no state aid solution is
agreed on
LSE buying bond data and index business from Citi
(USD 685 mln)
Amazon above USD 1000 watermark to attract more
buyers
As analyst expect another 10% push higher on average
Gilead Sciences and GlaxoSmithKline go
tough in HIV drugs
Goldman Sachs bought USD 2.8 bln bonds of
Petroleos de Venezuela bonds at discount
BlackRock CEO – US financial markets “probably fully
priced in” and Q2 earnings could dissappoint
Few words on stocks…
Some argue that stock prices are too high but after
considering the slow pace of interest rates rise, they are reasonable for the
time being. Of course, staying vigilant is important but some sectors like
mining or Japanese equities (trading at 20% discount to US peers) may be of
interest. Earnings are solid, still favorable to be investing in stocks based
on earnings performance, few unknowns on the horizon like North Korea, Trump,
China growth or possible snap elections in Italy as we head to quiet summer period.
So what’s next? Well, the ECB’s possible wording
adjustment in June and then Fed’s 3rd rate hike and taper in H2.
HP to report the slide in earnings amid the push
towards more focussed strategy and data center hardware business
Palo Alto Networks to report lower profit despite
fast-growing cyber security industry. In case of the company, the competition
bites.
Bonds
10-yr Trys yield at 2.22%%
10-yr Bund yield at 0.28%
Brainard dovish on soft inflation (thus pushing Trys yields lower) but expecting rate hike
pretty soon
EURUSD
Month end flows likely visible
Closing below 1.1140/55 range the 1.1000 is in sight
As the next likely 1.0840
1.1000 – growing in importance
1.1128 (61.8% Fibo Nov/Jan)
Expiring options around 1.1150 level, towards 1.1200 and
large at 1.1250
USDJPY
Resistance at 111.00
Next 50 DMA at 111.21 and 50% Fibo at 111.24
200 DMA at 110.20 – a pretty strong support right above
110.00 level
GBPUSD
Polls changing the game and potentially election outcome
for May
As she may not be able to form the government alone what
in turn would weaken UK’s negotiation position in Brexit talks
1.2775 is the next to watch, followed by 200/100 DMA at
1.2586/1.2573 levels
Data
EZ: Flash CPI
Core CPI should move back close to 0.8% level (market
expectation 1.0%) vs 1.2% prior
CPI expected at 1.5% vs 1.9% prior
Former FBI director James Comey to testify
before Senate (tentative)
Beige Book
ECB’s
Coeure (0720 GMT), Lautenschlaeger (1230 GMT)
Fed’s Kaplan (1200 GMT), Williams (2330 GMT)
Thu
ECB’s Villeroy
Fed’s Powell
Fri
US NFPs 185k exp vs 211k prior
Unempl. rate 4.4% exp vs 4.4% prior
Average earnings +0.2% exp vs +0.3% prior
Fed’s Harker
EU-China Business summit (Juncker/Li)
June 8 – ECB meeting – Draghi being alone but
inflation data from US and JP suggesting ECB to carry on with ultra-loose
stimulus
June 8 – UK elections including Scotland, if
SNP/Sturgeon wins the independence referendum likely to follow
June 11/18 – French Legislative (Parliamentary) elections
(a big question mark for Macron to gain majority)
June 13/14 – FOMC meeting – hike probability was
at 89% after yesterday’s data. If data supportive, we may see one hike in June,
then in Sept followed by balance sheet reduction announcement in Dec
June 15/16 – EcoFin meeting to discuss Greece
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
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