Feb 10, 2017 - Market Update

Trump honoured one China policy during the phone call with Chinese president

EZ bond yields rising – on Le Pen only, really? May be the market is expecting QE taper at some point but what about traders just overlooking the underlying issues not being fixed across EZ?

Also the Trump support of corporate America may not be the best for EZ companies and that combined with political risks in Europe doesn’t help DAX to follow the gains in US indices that closely.

Greek 2-yr yield was sharply up to 10% while the rest of pheriphey contracting and now falling on hopes of successful bailout outcome. EcoFin meeting on Feb 20 to discuss Greek bailout.

Data

US: U. Michigan Consumer Sentiment (Feb) to print slightly lower

Abe-Trump meeting today, press conference at 1800 GMT

But they will be playing golf over the weekend, so we can still have more headlines coming

...one of the many opinions circulating around:

ECB to unleash a 'perfect storm' for EUR shorts - Credit Agricole  link

In April, the ECB will cut the pace of its monthly purchases from EUR 80bn to EUR 60bn.

This, coupled with growing purchases of shortdated bonds, trading below the deposit rate floor, should compound the risks for EUR ahead of the election season in the Eurozone.

The combination of reduced bond purchases and reallocation of some of these purchases towards the short-end of the curve will have a negative impact on EUR.

EURUSD – pivot 1.0641, 1.0620 than 1.0570 and 1.0500

Gold – support 1220

S&P 500 – above 2300 where sky is the limit...

USDJPY – depending on US yields and upcoming Abe-Trump meeting; levels to watch: 114.00, 114.40/50 and 115.40 or top of the cloud around 116.00.

Good luck Champs!

Mr Hawk

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