Short recap
Asian in red on safe haven flow
Europe opening lower
US/CA Labor Day holiday today
UN Security Council to meet on North
Korea
US Secretary of Defence Mattis joining Trump in his
rhetoric (not a good sign)
Little risk in FX world warranted
Despite North Korean likely not to escalate situation
further as it hit the ceiling with hydrogen bomb test (50 KT)
Oil supplies to North Korea likely to be cut off
Brexit no deal outcome at 25% probability
Moscovici (EU) – strong EUR not a threat to EZ firms
Trump looking to withdraw from free trade deal
with South Korea
Another strong hurricane Irma creating
EU/China economies to cool down too after
US growth eased
Equities
US stocks printed new highs on Fri
Volkswagen recalling 1.8 mln vehicles in China
FiatChrysler declining and takeover offer
Legend Hodlings buying 90% of Banque
Internationale a Luxembourg (EUR 1.5 bln)
Dow and DuPont merger completed (USD 130
bln)
Historically, Sep not a perfect month for S&P 500 with most of the time ending in red
Bonds
10-yr Trys yield at 2.16% - finally picking up
10-yr Bund yield at 0.38%
Highly rated corporate bonds to benefit either
from dovish ECB or escalation of tensions
As Bunds may hit again zero level yield
range
COT report as of last Tue
EUR longs at 87k vs 88k week before – after hitting the
high in EURUSD, spot moving lower could put additional pressure on long
speculative positions and spark selling
JPY shorts at 69k vs 74k week before – USDJPY hitting the
lows, some relief for JPY shorts may be in sight
GBP shorts at 52k vs 46k week before
Overall net short USD positions making new records since
2013
EURUSD
EUR may act as a safe haven currency, small bias higher
Attempts above 1.2000 to hit the heavy resistance
USD did well going to close despite a bit weaker NFPs
As the ECB is very concerned about EURUSD level &
pushing any taper talks to Dec
If no geopolitical events, may revisit 1.1700/50 area
Resistance at 1.1910, 1.1980, 1.2071
Support at 1.1885 (55 DMA), 1.1878 (10 DMA), 1.1845
(23.6% Fibo)
Real yield differentials pointing to significantly
overvalued EUR
USDJPY
Gap down after nuclear test recapped back later
110.00 a ceiling due to risks
Expiring option (USD 800 mln) at 110.00 to cap the flow
as well
Gold
Well supported by general safe haven flows
On the back of North Korea, US-Russia diplomatic war, US
debate over tax and debt ceiling
Topped by dovish Fed
Resistance in sight at 1375
Strong support at 1300/10
Data/events
ECB’s Mersch (0740
GMT)
BRICS’ summit
starting today in China
Tue
Kashkari (Fed)
Kaplan (Fed)
Brainard (Fed)
Thu
Mester (Fed)
Dudley (Fed)
ECB – Draghi to
address a strong growth and low inflation vs still rising EUR
ECB is very
concerned about EURUSD level & pushing any taper talks to Dec
Expecting dovish
ECB with no hawkish surprise at all
Draghi to talk down
EUR
Let’s get ready for
low yield for longer period (not only from ECB)
Economic growth not
impacted by strong EUR yet
Fri
Harker (Fed)
Sep 19-20 FOMC
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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