Feb 8, 2017 - Market Update

Short recap

Asian markets lower on uncertainity about Trump pro-growth policies

CN – property stocks enjoyed rally as may not face such headwinds as expected before

EU markets mixed after positive start

US 10-yr bond yield below 55 DMA what may be seen bit dovish in the short term; correcting to 2.10/15% levels? Currently at 2.40%

Bund 10-yr bond yield at 0.35%

French presidential campaign is full of typical local issues, pressuring EUR

Volkswagen US to invest USD 2 bln in green infrastructure in US (part of the emission settlement)

S&P 500 aiming for 2300, if broken no further resistance soon in sight

DAX 11 400/450 support range making some question marks

2017 allocation of stocks based on valuations while taking into account political risks in EZ: 50% EU stocks ex-UK and 50% JP stocks

Oil – API inventories skyrocketed to 14.4 mln barrels of stock (2nd highest on record)

Today’s EIA report to be watched, market is expecting a rise of 2.5 mln

Gold in demand on EZ and US; support at 1220 but needs to overcome 1236 (triple top) on the way to 1250 (50 Fibo)

CNY-CNH spread narrowing

Abe-Trump meeting this weekend – downside risk for USDJPY

Decision about 2nd Scottish referendum in two weeks (speculation)

FOMC March hike at 25%

Yellen may surprise on hawkish side in Semi-annual testimony next Wednesday as market has very low expectations

JP capital flow data to be checked tonight as Japanesse are not only selling US Trys but have also huge holdings in EU bonds

Selling of US Trys from both JP and CN side supporting USD

USD – looking firm broadly

Commodity currencies – USD and weaker oil prospects putting pressure on

EURUSD

Is trend changing? Broke out of uptrend channel on 4-hour chart.

1.0620 – rising support trendline

1.0600 – 55 DMA

1.0525/00 – 61.8% Fibo

Formation of reverse H+S formation (1.0515)

Peripheral spreads still at elevated levels; Greece and France making headlines

Small spillover to equity markets but nothing serious yet; the red alert would be further significant rise in 2-/3-yr Portugees bond yields

Belgium issued 40-yr bonds yesterday

Good luck Champs!

Mr Hawk

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