Feb 1, 2017 - Market Update

Short recap

Asian markets higher inspired by US session

EU markets to open higher           

Trump administration don’t like weaker EUR; will keep attacking EU, Japan, Germany and Merkel in particular

Central banks policy divergence and currency manipulation the same thing in his world of marketing

FX manipulation remarks against (GE and JP) led to risk off even in Asian markets

10-yr US Try yield slightly up around 2.47%

10-yr Bund yield flat at 0.43%

Oil invetories (API) higher offsetting OPEC cuts, trading in narrow range

Relief in EM due to lower USD; DM still in uptrend but pausing

Prospects for mining companies strong

Siemes raised earnings forecast

Roche Holding looking at revamping/selling its diabetes-care line

Apple (Q1 results) – record number of phones shipped, higher revenue, better EPS and now sitting on USD 246 bln of cash

Proved that iPhone 7 sales do well

Mobile phones market reaching plateau

To expect longer replacement cycles, more price sensitivity from consumers

EURUSD

100 DMA at 1.0796

Strong resistance at 1.0800/50 still in place

Fibo 61.8% at 1.0835

USDJPY

Support at 112.50 was broken but market respected it overnight

And traded through 113.25 (23.6% Fibo)

10 DMA at 113.88

USD Index

61.8% Fibo at 99.26 acted as a support

As well as 100 DMA at 99.50

Next level around 100

10 DMA at 100.26

76.4% Fibo at 101

XAUUSD

Respecting Fibo levels 1182 (23.6%) as support and 1219 (38.2%) as resistance

If broken to the upside, further move can be expected

Then 100 DMA at 1223

Data

EZ Manufacturing PMI to keep on growing

ADP Employment to be slightly rebound

ISM Manufacturing to keep rising

FOMC

Markets not expecting any surprise, likely to reconfirm guidance and keep status quo (reinvestment and rates within the range of 50-75bps)

If mentioning better labor market or economy doing well it may sound hawkish to the market with probability of March 15 rate hike higher (if trading volatility, look at March 16 expiry)

Market pricing in two hikes despite officials seeing three this year

Fed officials need to wait to get more clarity on Trump’s pro-growth policies

To watch Trump’s commnents on Fed

No press conference or economic projections today

Good luck Champs!

Mr Hawk

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