June 30, 2017 - Market Update (Markets getting ahead of themselves, US Q1 GDP revised up, S&P - Fed to start taper in Sep, Bunds-Trys spread at 183 bps, Raiffeisen Bank having difficulties with IPO, Small techs smashed on low liquidity)

Short recap

Asian down on risk off flows from EU/US

Europe opening mixed

This week we witness lots of end of month, quarter and half a year flows/positions squaring

Market is ahead of itself based on reactions, valuations, low vols, complacency

China manufacturing up on good production/new orders

US Q1 GDP revised up on consumer spending

Well, never underestimate the consumption power of Americans as history proves

According to S&P Fed will start taper in Sep and rise rates one more time in 2017

Higher German inflation did not help USD yesterday

US trade deficit report not published yet as it is under review at White House

Can be released anytime…or tweeted…

Equities

Deutsche Bank defending bank privacy in Trump’s case

Raiffeisen Bank International having difficulties with IPO of its 15% stake in Polish lender

As profitability is questioned

Fox bidding for Sky to face hurdles

Gabriel Resources asking USD 4.4 bln in damages from Romania

Icahn backing a break up of AIG

Good results of stress tests opens the door for buybacks and dividend rises at US banks

What in turn pushes their shares higher

Techs on a roller coaster but NASDAQ likely to target 5300 area

Small techs smashed as they were first to go on their low liquidity

Bonds

10-yr Trys yield at 2.28%

10-yr Bund yield at 0.46% - reaching the Jan/Mar highs around 50 bps

Central banks in sort of harmony

But market is pricing the ECB rate hike well well in 2018

Bund-Trys spread keeps narrowing to 183 bps

EURUSD

Right below strong resistance from descending trendline and 1.1495 & 1.1615

If broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

Decent offers seen towards and above 1.1450

Still well bid on market perception of hawkish ECB, thus downside limited

But big option expiries around 1.1350-75 area (EUR 1.7 bln)

Support at 1.1400 and from options

USDJPY

Corrected despite higher US yields but yield spread as a driving force to stay

On position squaring flows, crosses were heavy too

In general the underlying theme is up, choppy, consolidating

But central banks comments still in the air

Offers ranging 112.00/15

Bids from 111.50

Support 111.93/79 (Ichimoku), 111.78 (100 DMA), 111.76 (10 DMA)  and then 111.53/50 (50 DMA)

Resistance 112.24 (61.8% Fibo), 113.05 (76.4% Fibo)

Gold

Not doing well on a sell off in bonds and JPY

Resistance at 1245 (61.8% Fibo) and ascending trendline, then 1250 (100 DMA) and 1254 (50 DMA)

Support at 1234 (76.4% Fibo), 1233 (200 DMA)

Data/Events

ECB’s Lautenschlager (1130 GMT)

ECB’s Nowotny

ECB’s Coeure (1200 GMT)

US trade deficit report can be released anytime

...or tweeted…

July 5 – FOMC minutes

July 6 – ECB Minutes

July 7 – US NFPs

July 7 – Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting – Trump meeting Putin

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 GMT)

July 20 – ECB meeting

July 26 – FOMC meeting

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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June 28, 2017 - Market Update (Draghi's reflation & Yellen's “no new financial crisis in our lifetime” words, Cyber attacks - a new era to come? Bonds, equities down - a new risk off combination? JPY a perfect summer carry trade)

Short recap

Asia down inspired by US session after another delay of healthcare bill vote

Europe opening lower

World coping with another cyber attack – a new era to come?

Draghi replaced deflationary forces by reflationary ones and pushed EUR higher

Sounds like woo-doo to me when we talk about “forces”…

But overall his speech was in line with dovish policy. More link  

Yellen was out with “no new financial crisis in our lifetime” comment, meaning as long as she is alive. More link

Healthcare reform vote delayed as Republicans score a goal to their own net

Bonds and equities on defensive overall yesterday what makes an interesting risk off combination

Carry trades to suffer, thus EM and high yield DM not to do well if current setup continues

Equities

Techs, biotechs and EM bleeding

Nestle to buy back CHF 20 bln worth of shares over 3 years

Option traders looking at AstraZeneca from a short side as the market positions itself for lung cancer trial results

Alphabet hit by EUR 2.4 bln fine from EU for abusive behaviour in search engine

Not effecting long term business as the fine is just 3% of cash/1.5 month of cash flow

Facebook at 2 bln user mark, doubling since 2012

Syngenta (owned by Chinese) interested in Bayer assets that need to be sold

As a part of Monsanto takeover deal

Bonds

10-yr Trys yield at 2.22% vs 2.14% yesterday

10-yr Bund yield at 0.39% vs 0.25% yesterday

DXY

Support 95.90, then 94.70 (61.8% Fibo)

Resistance 96.44 (50.0% Fibo)

EURUSD

Market was caught by surprise with Draghi’s reflationary forces comment

What was also confirmed by price action

If we see the 1.1295/1300 holding, we are likely marching through 1.1400

But the historical supply range comes towards 1.1500 (check the weekly chart)

Central bankers to drive the show today too

Support at 1.1366, 1.1300

Resistance at 1.1400, 1.1415/30, 1.1464, 1.1500

Weekly chart (Source: Saxo Bank)

Daily chart (Source: Saxo Bank)

USDJPY

Dip buying as a strategy? As some may see carry trade going to summer pushing JPY lower

Exporters holding sell orders at 112.50

Bids towards 112.00, more below

Support 111.80 (100 DMA) and then 111.50 with USD 2.5 bln option expiring

Resistance 112.24 (61.8% Fibo), 113.05 (76.4% Fibo)

Data/Events

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal:

ECB’s Mersch (0900 GMT), Lautenschlager (1045 GMT), Constancio (1130 GMT), Draghi (1330 GMT),

BoE’s Carney (1330 GMT)

BoJ’s Kuroda (1330 GMT)

BoC’s Poloz (1330 GMT)

Thu

Fed’s Bullard (1700 GMT)

US Trade deficit report to be released – what accusations can we expect?

July 7/8 – G20 meeting – will Trump meet with Putin?

July 20 – ECB meeting

July 26 – FOMC meeting

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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June 27, 2017 - Market Update (US 30-yr Trys yield flatening further, EURUSD stuck within 1.11-1.1300 range, Gold flash crash but long specs reduced while keeping the bullish bias on political uncertainity, Mkango to lauch rare-earth production in Malawi, Alibaba's Best to do delivery services, Alphabet + Avis, Apple + Herzt)

Short recap

Asia up on expectations of Yellen confirming later today one more hike this year

Europe opening lower

Trump’s small victory (finally something) as Supreme Court made some parts of travel ban applicable

Trump-Modi (India) meeting was full of socializing

China-Canada agreed not to perform cyber attacks on private businesses to steal trade/confidential info

Fed’s Duddley sees easy financial conditions, high stocks as another reason to hike one more time this year

Draghi – no QE/bond buying for Greece

Equities

Sistema, MTS in legal fight with Rosneft and Russian courts

A logistic company Best (linked to Alibaba) looking to raising approximately USD 750 mln in US IPO

As Alibaba is betting on further rise in e-commerce and the need for delivery services

Mkango to launch rare-earth production in Malawi in 2020

One of the very few projects outside China

At full capacity should produce 3000 tonnes a year

Facebook planning to launch TV quality shows, already in touch with Hollywood

Some Italian banks saved (just for now), next is Portugal

Alphabet to work with with Avis, Apple with Herzt on self-driving fleets, data collection and self-driving software "training"

But Apple likely missed the train as Alphabet and others are years ahaed...

Bonds

10-yr Trys yield at 2.14%

10-yr Bund yield at 0.25%

30-yr Trys yields dropped to 2.69% after weak data yesterday, thus flattening the yield curve further

Making the spread with 5-yr yield only 94 bps

The whole move was based on fading inflation expectations

As investors point to low oil prices and falling conviction of people about rising prices

Until these two change, the curve will keep flattening

EURUSD

Bear in mind end of month/quarter and mid-year flows

Stuck in the 1.1100-1.1300 range, needs a good catalyst

No carry trade flows as the EUR yields are too low

Capital flows prefer JPY, CHF as funding currencies

Support at 1.1189 (hourly Ichimoku), 1.1187 (23.6% Fibo), 10 DMA at 1.1172

Resistance 1.1195 (hourly Ichimoku), then 1.1228

USDJPY

Broke the resistance without any support from US yields

Offers were sitting at 112.00, may still be present

Battling with Ichimoku

But carry trades funding flows should keep JPY weak

Resistance at 111.79 (100 DMA), 112.25 (61.8% Fibo)

Support at 111.58 (50.0% Fibo), 111.33 (50 DMA)

Gold

Still holding well on political uncertainty globally

Waiting for Fed speakers today

While huge sell order from yesterday didn’t change the sentiment

Market saw a sale of 18.5k lots of gold and 5.5k lots of silver

In a very short time span likely by mistake as all was bought back afterwards

The drop in price triggered also stops below 1250 what took the spot to 1236 level

Should see much more selling as we witnessed a sharp reduction in longs

Today’s levels:

Resistance: rising trendline, 1245 (61.8% Fibo), 1249 (100 DMA), 1250 (10 DMA)

Support: 1235 (200 DMA), 1234 (76.4% Fibo)

Data/Events

ECB’s Draghi (0800 GMT)

Fed’s Williams (0805 GMT)

ECB’s Coeure (0830 GMT)

ECB’s Praet

BoE’s Carney (1000 GMT)

Fed’s Harker (1500 GMT)

Fed’s Yellen (1700 GMT)

Fed’s Kashkari (2130 GMT)

Wed

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal (1330 GMT):

ECB’s Draghi, Constancio, Mersch

BoE’s Carney

BoJ’s Kuroda

BoC’s Poloz

Thu

Fed’s Bullard (1700 GMT)

US Trade deficit report to be released – what accusations can we expect?

July 7/8 – G20 meeting – will Trump meet with Putin?

July 20 – ECB meeting

July 26 – FOMC meeting

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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June 26, 2017 - Market Update (Low yields to pressure US banks, Italian tax payers taking EUR 17 bln bill, FX options - implied vols making lows, VIX at 10, Fed to keep hiking, EUR longs trimmed)

Short recap

Asia up

Europe opening higher

Trump ok to cooperate with Senate on healthcare bill

Mester/Williams to keep hiking

Goldman Sachs sees 25% probability of a recession in US over the next 2 years

BIS was out with very positive annual report saying global growth to reach long-term average levels

Sees high risk of still growing debt level due to low rate environment and productivity growth

Arguing central banks should normalise their policies. More  link

FX options – implied vols making new lows

Similar picture in VIX, trading around 10 level

Equities

Pre-earnings – investors looking forward to see strong earnings in order they feel comfortable with current market valuation (highest since 2004)

Low yields to bite US banks, may see the pressure this week in case of risk off

As the valuations of US banks need to reprise given the low yields

Takata filling for bankruptcy after worldwide airbag recalls

Chinese bank regulator pushing banks to implement reforms

Intesa Sanpaolo to receive assets, senior bonds from two failed Italian regional banks

Gov to cover EUR 17 bln hole, subordinated debt holders to take the hit

Nestle having a new shareholder (Third Point) that pushes for squeezing more juice out of the company for shareholders

Looks like GE’s acquisition of Alstom’s power biz is paying off with a new contract for power plant supplies in Romania

IT companies like Cisco, IBM or SAP are pushed by Russia to share cyber security info

Bonds

10-yr Trys yield at 2.15% - not much movement

10-yr Bund yield at 0.25% - despite the mess with banks in Italy, the IT-GE yield spread stable after huge drop in June

The hit subordinated bond holders took in IT can spread around within this space in EZ

EURUSD

COT report as of Tuesday last week:

EUR longs 45k vs 79k previously - after the highest since 2007, EUR long specs trimmed positions

US yields to set the direction today

Range 1.1100-1.1300 this week likely

Support at 1.1187 (23.6% Fibo)

Trading above 10 DMA at 1.1176

Just out of curiosity Morgan Stanley was out with 'Strategic FX Portfolio Trade Recommendations' – Limit order from May 18:

Entry: 1.1030

Target: 1.1800

Stop: 1.0800

The rationale:

“We expect the USD to rally modestly against EUR as the market reprices its Fed expectations. We would use that rally in the USD to sell vs the EUR.

Increased signs of pro-integration pressures emerging in Europe (eg. Macron, Portugal - Fitch upgraded outlook from stable to positive ... improvement in the periphery)

Stronger growth environment should bring inflows into the equity market. The risk to this trade is a slowdown in equity market”.

Data/Events

Fed’s Williams

ECB’s Draghi (1730 GMT)

Tue

ECB’s Draghi (0800 GMT)

Fed’s Williams (0805 GMT)

BoE’s Carney (1000 GMT)

Fed’s Harker (1515 GMT)

Fed’s Yellen (1700 GMT)

Fed’s Kashkari (2130 GMT)

Wed

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal (1330 GMT):

ECB’s Draghi, Constancio, Mersch

BoE’s Carney

BoJ’s Kuroda

BoC’s Poloz

Thu

Fed’s Bullard (1700 GMT) 

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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June 23, 2017 - Market Update (Tough on Qatar, Soros: UK & EU may remarry, Morgan Stanley moving to Frankfurt/Dublin, Biotech on fire, FX option ruling EURUSD, USDJPY, Bonds on summer vacation)

Short recap

Asia flat

Europe opening lower

Tough conditions for Qatar to comply within 10 days

Will spur the risk off

Carlyle Group – Fed to keep hiking, no problem from higher rates

Soros on "Brexit In Reverse" - if all goes well UK & EU may remarry even before divorce  link

North Korea firing again

Equities

Morgan Stanley to move EU HQ and broker-dealer operations to Frankfurt and asset management to Dublin

Airbus & Boeing to face competition from RU, CN and JP in the future

Qatar Airways looking to buy 10% of American Airlines

US House not happy with Deutsche Bank’s rejection to share information about Trump’s finances with respect to Russia investigation

Biggest US banks passed the stress test

Biotech on fire without any particular reason

Index breaking through strong resistance

Few names to check: Gilead Sciences, AbbVie, CSL, Biogen, Amgen, Shire, Genmab, Celgene, Regeneron, Vertex, Alexion, Incyte (first three worth of looking at)

BlackBerry reporting Q1 earnings with focus on turnaround

Bombardier cutting more than 2k jobs in GE

Tesla to build a factory in China

Foxconn planning a USD 10 bln display factory in US

Bonds

10-yr Trys yield at 2.16% - not reacting to Bullard, more focussing on balance sheet reduction

10-yr Bund yield at 0.26% - no change from yesterday

EURUSD

No clear direction

Still stuck close to large option expiries strike levels within 1.1100-1200 range

Next week there are not that many, so we should be able to see a bit more moves

Expiring today EUR 1.97 bln at 1.1190-1200

Market watching interest rates differentials and ECB/Fed speakers

Next resistance at 1.1187 (23.6% Fibo)

10 DMA at 1.1175

Gold

Consolidating towards 1255 (50.0% Fibo)

Support from 100 DMA at 1249

Seen some risk off flows from energy

As prices of oil are very vulnerable on OPEC (in)action

Data/Events

ECB’s Draghi at European Council meeting

Fed’s Bullard (1515 GMT)

Fed’s Mester (1640 GMT)

Fed’s Powell (1815 GMT)

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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June 22, 2017 - Market Update (Harley Davidson buying Ducati, PIMCO on Chinese bonds, Frankurt to top London, Brexit laws blocked by Scots and Lords?, New US healhcare bill coming)

Short recap

Asia higher as oil found some ground

Europe mixed

German FinMin out with Frankfurt a good alternative to London

As ECB and banking oversight is there

Luring European Banking Authority there as well

Likely to cut taxes

PBOC not planning to shrink the balance sheet as Fed does

Macron – stronger integration of EZ to come (via common budget)

Brexit – getting tougher for May as Scottish parliament and House of Lords may unite with some MPs (Liberal and Labour) to block necessary Brexit bills

US pushing China to do more on North Korea

New healthcare bill is coming to life but watch the clash between Senate and the House

Equities

Ok to stay long equities on valuations but some macro worries appearing and volatility is extremely low

A time to buy protection going to lousy summer trading and position before wild Q3?

Harley Davidson eying to buy Ducati (belongs to Volkswagen/Audi portfolio) (EUR 1.5 bln)

Diageo buying tequila brand Casamigos (owned by George Clooney) for about USD 1 bln

Nike to sell directly on Amazon.com

RBC to cut jobs in order to push new technology

Cenovus having hard time to sell assets as oil prices are low

Wal-Mart and GM driving renewable energy sector as the largest buyers

Fed to release banks stress test results

Bonds

10-yr Trys yield at 2.15% - under pressure from falling oil and commodities

10-yr Bund yield at 0.26%

PIMCO on Chinese bonds:

Inverted yield curve pointing to stress (10 yr CGB yield dropped below 1 yr yield)

Result of tightening by PBOC and lower liquidity

Growth to decelerate into 2018

Stress in interbank market to be taken seriously

US high yield credit spreads widen on the back of stress in energy sector

That needs to cope with high debt (still growing) versus lower operating income from low oil prices

EZ bond yields diverge depending on the debt load (top EZ countries from lowest to highest)

Used to move in tandem

Germany, Finland, Netherlands, Austria

EURUSD

In the absence of data, the flows will be affected/limited by expiring options:

1.1000 (EUR 1.3 bln), 1.1090-1.1100 (EUR 1.87 bln), 1.1140 (EUR 423 mln), 1.1160 (EUR 800 mln) 1.1175 (EUR 2.2 bln), 1.1200-10 (EUR 1.7 bln), 1.1250 (EUR 2 bln), 1.1275 (EUR 660 mln) 1.1300 (EUR 74 5 mln)

Break of 1.1178 (10 DMA) to negate the trend lower

Next resistance at 1.1187 (23.6% Fibo)

Support at 1.1120/30, 1.1100 and then 1.1067 (50.0% Fibo)

USDJPY

Resistance at 111.24 (50.0% Fibo), 50 DMA at 111.15, 200 DMA at 110.85

Bidding interest on importers side on dips, while offers from exporters sit above 111.50

Stops below 111.00

Experiencing a strong correlation with real yields

Thus correction in US yields and oil higher to weaken the JPY

Expiring options will likely drive the market:

110.00-10 (USD 1.9 bln), 111.00-10 (USD 2.7 bln,) 111.50 (USD 690 mln) 111.80 (EUR 575 mln) 112.50 (EUR 1.7 bln)

Data/Events

EU Summit

ECB General Council meeting

ECB’s Hakkarainen (0820 GMT)

Fed’s Powell (1400 GMT)

Fri

Fed’s Bullard (1515 GMT), Mester (1640 GMT), Powell (1815 GMT)

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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June 21, 2017 - Market Update (China A-shares in MSCI, Oil dropping, Energy stocks on negative but getting closer to attractive, EUR down on risk off this time, Geopolitical risks ongoing, Queen's speech)

Short recap

Asia – risk off with miners, energy and banks in red

China shares slightly higher as MSCI decision was largely priced in

Europe opening lower

Oil dropping like a stone on rising Libya and US rig production, while OPEC not able to cut more

And rebalance the market, officially entering the bearish territory

Japan facing declining domestic demand and labour shortage, result of aging population

North Korea testing nukes again?

Be aware of still on going geopolitical risks: Qatar, Saudis, Syria, Russia, North Korea and Trump’s reaction

S&P likely to cut UK rating (Brexit – short time, high risks)

Equities

China A-shares included in MSCI Emerging Markets index (to add 222 stocks)

Full inclusion can take 9+ years due to size, access, capital flow restrictions…etc.

Initial weight of 0.73%, when fully completed, China would represent 20% of the index

Thus USD 340 bln of a flow in

Near future market to expect up to USD 18 bln (until May/Aug 2018)

Proving China is getting more internationally integrated

Energy stocks still negative view on falling oil prices but…

…may be getting closer to attractive levels

Huge risks are credit events as industry copes with high debt (still growing) versus lower operating income

Comment from last week as a reminder:

“Resources stocks to offer an interesting value

In particular energy but need some credit events and cleaning within the space

Canadian Natural Resources, AltaGas, Roxgold can be looked at”

Novartis having advantage over vision treatment from Regenerom Pharmaceuticals

Aviva dropping its exposure to tobacco companies

Apple fighting with Qualcomm over chip license, saying they are invalid

Ford to relocate part of Focus production to China (a bit of opposite to Trump wishes)

Boeing very positive on 737 and demand growth

Banks to pick a new alternative to LIBOR

Huge valuation gap between DM’s techs and their peers from EM space

Bonds

10-yr Trys yield at 2.16%

10-yr Bund yield at 0.26%

Fed hike priced at 21% (Sep) and 43% (Dec)

EZ credit spreads hitting lows seen back in 2014

On chasing yields in corps and lower rating issues, thus redirecting flows from developed markets

EURUSD

This time risk off should be negative on EUR

As the market may reduce positions/risk-on flows to EZ assets

And prefer USD and JPY

Saw profit taking and liquidation in EUR crosses

Only breaking 1.1179 (10 DMA) can negate the trend lower

Support at 1.1120/30, 1.1100 and then 1.1067 (50.0% Fibo)

Resistance 1.1187 (23.6% Fibo)

USDJPY

Resistance at 111.81 (Ichimoku), 100 DMA at 111.82

With large offers from 111.85

Support at 111.24 (50.0% Fibo), then 111.00 with stops below

50 DMA at 111.11, 200 DMA at 110.80

Large expiring options between 111.25-30

Importers likely looking to buy dips towards 110.00

While exporters to sell above 111.00

GBPUSD

Heavy with line in the sand at 1.2500

1.2629 (100 DMA) and 1.2552 (200 DMA)

Bids ahead of 1.2600, stops seen below

NZDUSD - 0.7100 in sight if no hawkish surprise from RBNZ

EURJPY – 122.50 attractive

Data/Events

Brexit - Queen’s speech 1030 GMT, later to be discussed what may usually take up to 5 days

GE’s Schauble speaking

ECB non-monetary meeting

BOJ’s Kuroda speaking

Thu

EU Summit

Fed’s Powell (1400 GMT)

Fri

Fed’s Bullard (1515 GMT), Mester (1640 GMT), Powell (1815 GMT)

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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June 20, 2017 - Market Update (USD getting technical support, extreme bearish sentiment turning, US yields rising, US House to finish tax reform in 2017, US stocks getting back to Trump trade on better financial liquidity)

Short recap

Asia green

Europe opening higher

US House looking to complete the tax reform in 2017 as the pressure is mounting

Brexit – EU stance is clear, the exit settlement, final bill and rights of EU citizens come first then the rest as future trade deal…etc.

PBOC pushing for more open financial sector in order to support the healthy developments

Equities

Markets slowly moving higher among extremely low volatility, Techs coming back

But China credit is bubbling and can be a catalyst for correction

MSCI to decide whether Chinese A-shares (domestic shares) will be included in MSCI Emerging Markets Index

Actually, it is already 4^th attempt to get included

Hard to say whether they will succeed and how many share will be included anyway

CVC Capital Partners to sell Continental Foods (EUR 1 bln)

Orange to reduce its stake in BT Group (GBP 900 mln)

Boeing out with new 737 jet

PerkinElmer buying Euroimmun (USD 1.3 bln)

Magna won the BMW 5-series plug-in hybrid production

Paulson on Valeant board

Altaba shares (holding company left from Yahoo sale) to starting to trade on NASDAQ

Bonds

10-yr Trys yield at 2.18% - moves in yields to show direction of USD. DXY should get further technical support with the close above double bottom neckline and possibility to rally towards 98.50 or so. Actually, the extrem bearish USD sentiment is turning and coming back from the lowest levels last seen in 2011.

10-yr Bund yield at 0.29%

EURUSD

5, 10 and 20 DMA pointing lower

Breaking 1.1194 (10 DMA) can show the momentum lower is weak

Support at 1.1120/30 but the rising trendline around 1.1040 may be the next target

Resistance 1.1187 (23.6% Fibo)

USDJPY

Should get some support from rising US yields

Resistance at 111.82 (Ichimoku), 100 DMA at 111.85

But well set up for a rise towards 114.36

Support at 111.24 (50.0% Fibo)

Large expiring options between 110.50/111.00

Data/Events

Fed’s Fischer (0715 GMT)

BoE’s Carney (0730 GMT)

UK’s Hammond (0800 GMT)

Fed’s Rosengren (1215 GMT)

ECB’s Coeure (1500 GMT)

Fed’s Kaplan (1900 GMT)

Wed

Brexit - Queen’s speech 1030 GMT

Thursday

EU Summit

Fed’s Powell (1400 GMT)

Fri

Fed’s Bullard (1515 GMT), Mester (1640 GMT), Powell (1815 GMT)

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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June 20, 2017 – Weekly Commodity (crude below $45, but follow the US/Russia tension)

Commodities didn’t have a good week. The Bloomberg Commodity index dropped to one year lows and Monday the negative momentum doesn’t seem to fade. The best performers were the grains and the worst performers were the soft commodities, but there were significant losses in the energy and metal markets too.

Oil

Drillers added active oil rigs for the 22nd consecutive weeks however only 6 new rigs bringing the total US oil rigs to 747. The US EIA crude inventories declined 1,66mil barrels but the fuel inventories rose despite the summer driving season. According to CNBC eight prominent hedge funds reduced their positions in shale drillers saying they are going to undo the recent recovery in the sector as pumping oil too fast and this will drive the prices lower and lower. After there is an activation of an oil rig it takes approximately 4-6 months to start to pump oil so the increase of rig-count means the US shale oil production will rise at a similar pace in the next 6 months. This means around the year turn the US oil sector will reach 10 mil bpd.

On the other side of the Atlantic in Africa, Libya and Nigeria are aiming to get back to the levels of production before the fights started as both are exempt from OPEC cut agreement. In the Middle East the highly ignored tension by the media between the US and Russians over the downed Syrian plane could bring some upside pressure after the Russians claimed they will stop any coordination with the US coalition and the coalition aircraft will be considered potential targets.

We are at a very important point as the market managed to close below the psychological $45 level.  Technically this can result in a technical selling that can trigger stops below or around $44, however be careful as a return above $45 can give new hopes for bulls.

Corn

Grains had a very good week overall. News about strong Chinese soybean demand lifted the beans and with it the whole sector. The hot weather in the US Midwest raises more and more talks about its impact on the quality of the crops, and this could easily result in a lower ending stocks than estimated by the USDA. More clarity we will get from the US crop progress report.

Technically the corn futures broke out from triangle formation a week ago however after the short squeeze dropped back and retested the upper trend line of the triangle. Last week however prices turned north again so trader needed to jump back to the game if their stops were hit.

Sugar

The lowered fuel prices in Brazil are pushing the sugar lower as bears are feeling stronger and stronger. The weaker gasoline prices mean lower ethanol prices. During the ongoing Cane Crush season this is very important as Sugar mills are deciding whether to produce ethanol or sugar and still sugar means bigger profits. Tuesday the data from key sugar producing region of Centre South showed again higher than expected sugar production. However the short positioning is increasing that there were some speculation of potential short squeeze, but we believe the right time did not come yet although the current positioning is unusual.

Technically the market is ahead of the 12-13 cents target range and nothing seems to stop the bulls unless there is a weather shock on the way.

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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

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June 19, 2017 - Market Update (Macron win a huge potential for France, Fed speakers, US groceries shaking up, extreme long specs in EUR - a fall to come?)

Short recap

Asia up

Europe opening higher

China-Iran to conduct join naval practice in the Gulf

Iran firing over Syria

Trump doesn’t like Cuban salsa

Macron doesn’t need a coalition partner for important economic reforms

France has a huge potential if he delivers

PBOC made a huge CNY 110 bln OMO liquidity injection

Stating the declining liquidity after banks bought gov bonds (official statement)

Japan reported a surprise huge trade deficit on energy imports while exports made a fast jump on cars/steel

Fed’s Kaplan – Fed should be very cautious and patient in rising rates

Lots of speakers this week, let’s see whether others share the same hawkish view as Yellen does (check Data calendar below)

Macron, Schauble and now GE’s Zypries would welcome UK’s U-turn in Brexit

Equities

US groceries shaking on Amazon buying Whole Foods and Aldi entering the market

Is it going to end up for Wall-Mart as for Tesco in UK?

Do you like car makers? Watch for those with more exposure to China

As US auto sales to decline further on expiring leases pushing prices of used cars lower

Petrobras looking as an opportunity as it cuts debt but is still valued below industry average

Fiat-Chrysler exiting Japan?

Airbus upgraded its A380 to boost the sales

Bonds

10-yr Trys yield at 2.16% - still holding close to recent lows but the break of 2.10% would be critical for USD

10-yr Bund yield at 0.28%

COT report as of last Tue (pre-FOMC/ECB):

EUR long specs at 79k vs 74k week before

Highest since 2007

But bear in mind that any extreme is reverted to the mean in some time

Are we going to expect the same long specs reduction as we had witnessed in 2011/2014 ?

EURUSD

Support at 1.1187 (23.6% Fibo) then 1.1120/30

Resistance 1.1284, 1.1295/1.1300

Breaking 1.1100 or 1.1300 would definitely see strong flows and follow through

USDJPY

Likely heavy going to 111.50

Resistance at 111.24 (50.0% Fibo), then 111.32 and 112.16 Ichimoku

100 DMA at 111.85

Support at 110.50 (61.8% Fibo) and 110.71(200 DMA)

Descending trendline around 111.00

DXY

USD consolidation on halt?

To watch the US 10-yr yields breaking 2.10% or not

Need better US data to push real yields higher, so risky assets keep rising and financial conditions tightening

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Support at 97.02 (10 DMA)

Gold

Still under pressure post-FOMC

Support at 100 DMA at 1248, 1245 (61.8% Fibo)

200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Data/Events

No relevant data today but to watch speakers:

Brexit talks starting today at 0900 GMT 

Barnier and Davis speaking at 1630 GMT

ECB’s Lautenschlager (0900 GMT)

Fed’s Dudley (1200 GMT)

ECB’s Nouy (1300 GMT)

ECB’s Weidmann (1500 GMT)

Fed’s Evans (2300 GMT)

Tue

Fed’s Fischer, Rosengren, Kaplan

Wed

Brexit - Queen’s speech 1030 GMT

Thursday

EU Summit

Fed’s Powell

Fri

Fed’s Bullard, Mester, Powell

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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June 16, 2017 - Market Update

Short recap

Asia flat

Europe opening higher

BoJ no change, upgrading consumption, domestic and global growth

To keep support as inflation is far from 2%

Greece getting EUR 8.5 bln loan

What about central banks raising the inflation targets to 3-4% range instead of 2% one?

Would it create the psychological pressure on households and corporates to spend/invest more?

Fed ok with hikes despite lower inflation pressures and job market is still strengthening

As financial markets conditions constantly improving since Mar 2016

Equities

US retailers suffer with almost 300 bankruptcies this year

US techs fall out stopped again around 5650 area for NASDAQ

Seems like correction without any panic is welcome

Nike to cut jobs and streamline offering

Apple suffering the most from techs selloff

Facebook fighting terrorism via removing content

Uber looking at trucks

BHP with new Chairman

Nestle likely to sell US business of Butterfinger and BabyRuth

BP and Reliance Industries to take on gas production in India (USD 6 bln)

Bonds

10-yr Trys yield at 2.17%

10-yr Bund yield at 0.28%

EURUSD

Support at 1.1120 (38.2% Fibo)

Resistance at 1.1187 (23.6% Fibo)

USDJPY

Digesting FOMC

While BoJ seems off the interest of markets

Resistance at 111.24 (50.0% Fibo), then 111.37 and 112.00 Ichimoku

100 DMA at 111.88

Support at 110.50 (61.8% Fibo) and 110.58 (200 DMA)

Descending trendline around 111.00

Closing today above 110.80 level would be a bullish outside week signal

With potential to look at 114.36 after breaking 111.24 level

DXY

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Gold

Under pressure post-FOMC

Expecting a wait-and-see game, as there is still decent physical demand due to geopolitical risks

While investors need to assess upcoming US data to get more comfortable with Fed’s hawkish tilt

Support at 100 DMA at 1247, 1245 (61.8% Fibo), 200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Upcoming Data/Events

Fed’s Kaplan (1645 GMT)

Sunday – French Legislative (Parliamentary) elections

Monday – Brexit talks starting ?

Thursday – EU Summit

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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June 15, 2017 - Market Update

Short recap

Asia lower

Europe opening lower

FOMC – more hawkish than expected

Inflation expectations adjusted but Yellen sees a good ground for prices to keep rising

Likely start to taper in Sep, another rate hike in Dec

Some may ask why Fed doesn’t want inflation to overshoot

Trump under investigation for obstruction of justice

Looks like they are still trying to find something on him or is he really such a mess…?

ECB’s Nowotny questioning 2% inflation target as tons of money still not pushing prices to the target

Equities

Nokia entering the router market, where Juniper and Cisco do well, by launching the fastest network chips

Rosneft going offshore

Private equity eager investors pump USD 7 bln to new fund from Goldman Sachs

Bank of America sees opportunities in international cash management

US banks eying Saudi’s market as Morgan Stanley and Citi are there, and Goldman Sachs applying for a license

Looks like few reforms, upcoming Aramco IPO, Trump’s visit can make Saudi Arabia an investment destination

Google reached an agreement with Indonesia over future tax payments (I like this one…who wouldn’t like to cap the upcoming tax bill)

Thomson Reuters launching a set up to offer its data flow via blockchain technology

So the firms can use Ethereum and Corda based trading systems with Reuters data

US financials, especially life insurers, to benefit from rising rates

While utilities, telcos and real estate on short term negative side

Resources stocks to offer an interesting value

In particular energy but need some credit events and cleaning within the space

Canadian Natural Resources, AltaGas, Roxgold can be looked at

Bonds

10-yr Trys yield at 2.14% - yield development is crucial for further direction of EURUSD and USDJPY

10-yr Bund yield at 0.23%

EURUSD

What’s next? 1.0500 again or 1.1500? …asked the questions yesterday but today too…

Consolidation lower after FOMC is on the cards

Resistance at 1.1231 (10 DMA) with sellers sitting around

Then 1.1300 (based on FOMC price action)

Support at 1.1200, 1.1180 (23.6% Fibo) and 1.1120 (38.2% Fibo) but strong at 1.1013 (61.8% Fibo)

USDJPY

Bids sitting between 109-109.50

Offers seen going to 110.00

With decent options expiring today and tomorrow at this level

Crucial resistance at 110.50 (61.8% Fibo) and 110.61 (200 DMA)

Support at 109.60 (76.4% Fibo), then at 108.12

Upcoming Data/Events

Basel Committee concluding meeting over bank rules

ECB’s Draghi and Coeure at Eurogroup meeting

Greece – any resolution? Again at least temporary?

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

June 19 – Brexit talks starting ?

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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