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

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