Jan 31, 2017 - Market Update

Short recap

Asian markets lower on Trump immigration restrictions
Trump – just protectionism but no real economic policies yet – market not taking it well
EU markets mixed
BoJ – no policy change,  looking at steady economic recovery to push prices higher to 2% level without additional stimulus
Brexit parliamentary debate starting today, the Brexit bill should be passed despite some lawmakers being pro-EU

CEOs of Goldman Sachs and Ford criticized Trump’s immigration policies
Deutsche Bank to pay USD 425 mln and GBP 163 mln over money laundering activities of wealthy Russians
UniCredit declaring EUR 11.8 bln loss for 2016, looking at EUR 13 bln rights issue; declaring such a loss means not complying ECB capital requirements
US equities remaining attractive despite Trump’s policy; sector wise financials, energy, techs and as soon as we have more clarity, health care

EURUSD – markets seem to be short gamma
Risk reversals to favor EUR puts
Current market positioning can turn out to rapid moves if stop-outs are triggered

USDJPY – 112.50 support
If broken can see more gamma buying, short dated strikes 112-111.50
JPY and Nikkei 225 still the most sensitive to uncertainty

EURCHF/USDCHF – moving lower on risk off
But overall there is still no clear indication in interbank market what traders are buying

Gold - Trump helping a lot
1205 resistance, if broken, more buying may follow and eventually reaching 2017 highs around 1219 level (38.2% Fibo)

Oil – US production offsetting the OPEC cuts, thus pushing oil lower
Support USD 50.70 (WTI) and USD 53.50 (Brent)

Data
EZ – Inflation set to print new highs (+1.4% exp)
EZ – GDP to stay steady
EZ – Unemployment expecting no change
US – Consumer Confidence Index expecting a slide
US – FOMC starting two day meeting today

Good luck Champs!
 Mr Hawk
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