Mar 8, 2017 - Market Update

Short recap

Asian stocks already taking profits and positioning ahead of FOMC next week

EU opening lower

Obamacare replacement will not be as smooth Trump would hope for

Oil under pressure from expected rise in US inventories (market still oversupplied and US production rising)

Gold through 1220, staying above 1210 (50/100 DMA) needed to be on bullish side

Getting support from risk but Fed hike, rising USD and yields represent headwinds

Caution ahead of NFPs and FOMC

US stocks in a search for new (after Trump trade) inspiration

Favoring more Europe after political risks off the table

S&P 500 key support short term at 2350

Get ready for huge changes in auto industry driven by introduction of green cars, car sharing and automated driving. More M&A coming?

Volkswagen positive on group 2017 outlook

Latest hit over selling US technology to North Korea or Iran of USD 892 mln was taken by Chinese ZTE as result of settlement with US

HP eyeing Nimble Storage in a data storage hunt (USD 1.09 bln)

Snap lower on short sellers stepping in

Good at cleaning the oil wells? Province of Alberta to get funding from Canadian budget to clean up after bankrupt producers.

Citibank including Chinese bonds to its indices

Forex

Nothing overwhelming should happen today as market is waiting for ECB, NFPs and FOMC for inspiration and further direction

GBP – unless UK Prime Minister May will try to override her second defeat from Lords yesterday (Brexit bill)

Key level 1.2000

EURCHF – reacting to political risks in EU, already moving going to ECB

EURUSD – 1m implied vols printing new lows since 2014

Market looking for a trigger

Fed hike is fully priced

But only hike is priced in, nothing else…

Yesterday ECB published details of bond buying program

Saw a significant shift over to shorter durations in bonds it buys

Bunds Feb duration to 4.3 years from 9.4 years in Jan

Data

GE: Industrial production to edge higher after 7.4% drop in Jan

US: ADP Employment expected up to 190k but lower than previous. Market curious about productivity growth (same for NFPs).

Good luck Champs!

Mr Hawk

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