Mar 10, 2017 - Market Update

Short recap

Asia higher

EU opening higher

Volkswagen keeps cutting on top execs bonuses

Akzo Nobel turned down EUR 21 bln offer from PPG Industries

Looking to spin off chemical operations

WikiLeaks offered technology companies to share details on CIA hacking tools in order to develop updates

Alibaba in talks to raise USD 5 bln via offshore loan for refinancing and general use

Bayer and Monsanto selling assets worth of USD 2.5 bln to get regulatory approvals for their merger

BASF seems to be a buyer of some assets

DAX above 12 000

S&P 500 eying 2400, if broken may be a positive signal

If not, the range 2350-2400 may stay with us for some time

Well having more than 8 years of bull market

US stocks trading at 20% premium to EU peers

Risk of weak oil to be translated to weakness of stocks at certain point

Oil under pressure from speculative long positions liquidation

Significant amount of longs still in red waiting for a sell signal on potential spikes

Brent USD 50 level may be a trigger point for OPEC verbal intervention or eventually action

Gold still neutral – support at 1193, then at 1177

ECB

Draghi had to admit some improvement what in turn supported EUR across the board

ECB neutralizing its guidance but wording staying the same

Rates at current level or lower for extended period of time, well past the horizon of QE

From Apr till end of Dec 2017 or beyond in necessary asset purchases will be EUR 60 a month

No need for further urgent measures

No new TLTRO

Some of the risks didn’t materialize

EZ yields moving higher even the ECB statement was dovish

Peripheral spreads without any change meaning no sign of ECB support

EURUSD - daily levels:

3rd res 1.0707

2nd res 1.0661

1st res 1.0618

Pivot 1.0571

1st sup 1.0529

2nd sup 1.0482

3rd sup 1.0439

USDJPY – strongly benefiting from higher US yields (10-yr above 2.61%)

Daily levels:

3rd res 115.85

2nd res 115.42

1st res 115.17

Pivot 114.74

1st sup 114.50

2nd sup 114.07

3rd sup 113.82

Data

EU Summit

GE: Trade Balance

UK: Manufacturing production – expected lower

US: NFPs – headline figure and unemployment rate not that important unless we have a bad surprise from headline number

All is about Average hourly earnings after January drop

Important for future rate hikes pace

Market pricing June hike at 52%

Headline +190k vs +227k in Jan

Earnings +0.3% vs +0.1% in Jan

Unemployment rate 4.7% vs 4.8% in Jan

Next week will be busy:

Mar 13-14 – US budget draft to show first details of Trumps stimulus plan

Mar 15 – FOMC (25 bps hike expected)

Mar 15 – Dutch elections

Mar 15 – US debt ceiling deadline

Mar 16 – BoJ meeting (right after Fed hiking…)

Mar 16 – BoE meeting

Mar 17-18 – G20 FinMin meeting

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