Mar 27, 2017 - Market Update

Short recap

Europe opening lower

Brexit – May visiting Scotland to offer more powers

Ahead of Scottish parliament vote on second independence referendum tomorrow

Wake up call for Trump trade after Obamacare repeal vote being pulled off (for the time being)

Risk of other reforms being delayed unless Republicans deliver very quickly

Trump to sign another batch of executive orders on Tuesday to support oil, coal and natural gas industries

Rumours about Trump giving the NATO bill of USD 374 bln to Merkel

Merkel’s party scored win in a local elections

Doubt about Trump trade to have wider implications for US stocks

As equity markets are forward looking and may discount the possibility of lower growth

Financials to feel the pain

S&P 500 – support at 2300 and 2250

DAX – resistance 12 200, former support at 12 100/000 now acting as a resistance

10-yr Trys yield at 2.36% (important 1.30% level)

10-yr Bunds yield at 0.39%

COT (Mar 21)

Institutional investors staying on sidelines, participation very low across commodity sector

USD longs up by 11%

EUR shorts down by 20%

WTI long reduction continued, shorts up

OPEC/Non-OPEC meeting confused the market

No extension, review later

Brent support at USD 50

Breaking USD 49.22 opens the door to Nov low at USD 43.58

Gold – resistance at 1258 (200 DMA)

DXY – H+S getting firmer foot, 200 DMA at 98.56

USDJPY – next support at 109.50 and 108.24 (200 DMA)

Check also 200 and 55 WMA

BoJ – easy monetary policy to stay

EURUSD – 1.0850 broken this morning

High from Dec 8 at 1.0873

200 DMA at 1.0880

Descending trendline around this level too

But still can get a touch above 1.0900 level (1.0910/25)

ECB – if the market attention shifts to macro from political uncertainty (Macron and Merkel doing better), ECB would likely need to pursue a less dovish policy

Data

GE: Ifo Business Climate Survey – no negative surprise expected

EZ:  Private Household Sector Loans – expected slightly higher

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

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