Mar 7, 2017 - Market Update

Short recap

Asia higher

EU markets mixed open

US deploying anti-missiles battery in South Korea

North Korea was likely targeting US bases in Japan yesterday

Markets finding Trump still loosing focus from economic topics, main message from US stock yesterday

Brexit – new debate about Brexit bill at 1100 GMT

Deutsche Bank CEO backing the EUR 8 bln shares offering

Shares may continue on negative starting today

Intesa SanPaolo selling stake in Allfunds (EUR 800 mln) to realize capital gain

Likely to have a positive spin over effect on other EU financials

PSA Group - Opel-Vauxhall deal worth of EUR 2.2 bln to challenge Volkswagen

Another round of consolidation and search for cost savings with Standard Life buying Aberdeen Asset Management (GBP 11 bln)

Real estate business is interesting as we still have very low interest rates what makes building and renovating attractive

TG Therapeutics up on leukemia drugs combination doing well in a study

Cameco (a uranium producer) looking at selling mines in US on a couple of years industry decline

Nobody expressed interest in buying Trump tower in Toronto as a part of debt holder claim sale

HFs eyeing bank stocks again after years of negative no interest

Gold – support at 1220 (Fibo 38.2%) and 1210 (50/100 DMA)

EURUSD 

Staying bearish short term

If you are bullish there is no advantage of buying in now

It may still move higher but we have ECB and NFPs this week

All can be again about 1.0500/15 range as last week

HFs back to USD longs on Fed hike

Having hike fully priced in their positioning

But please remember that Fed officials were preparing us for a rate hike cycle (3 hikes this year) and not for March hike as such

If all goes well they will hike three times and (may be) one hike can be even higher than 25 bps

A serious shift in ECB policy unlikely before Jan 2018

But may see the change in capital key what in turn would boost peripheral bonds

Base range levels: 1.0500 and 1.0800/50

1.0625/50 important on the way higher today

No major support until 1.0250

BONDS

10-yr Bunds yield at 0.34%

10-yr US Trys yield at 2.50% - still in a wait and see mode despite stock markets rallying and market expecting growth acceleration

A break of 2.60% would endorse the change

Data

EZ: Q4 GDP to stay steady at 0.4%

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

Good luck Champs!

Mr Hawk

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