Apr 13, 2017 - Market Update + Few thougths on Trump

Short recap

Asia lower

EU opening lower

Trump proved me wrong about non-event end of week

By the way, Trump not accusing China from currency manipulation anymore? Let’s call it a U-Turn…

Well, it is officially true from yesterday as he realized that it is him and not Chinese

Who is to be labelled as a currency manipulator when moving EURUSD to 1.0670 from below 1.0600

The move was based on his words about Fed keeping the rates low, USD getting strong and not flagging China as a currency manipulator

Also to remember that 40% of US debt is owned by foreigners

No surprise that Trump doesn’t want to mess up with them…that much

Don’t get confused by Trump’s rhetoric and focus on hard facts as Friday’s US CPI and Retail sales data are

As the stock market is closed on Good Friday, the reaction of bond market will be crucial for further direction of USD

US bonds close at noon local time

US: Headline CPI likely to edge up a bit despite lower oil but Core should stay in a focus of Fed (previous 2.2% y/y) anyway

Meanwhile Fed officials keep talking about staying on the track with rate hikes

And the start of reducing the balance sheet this year

US and Russia relations still below zero

While China is becoming a new friend of Trump especially on North Korea

A passenger of United Airlines taking the case legal

Global airliners should pay attention marketing wise

As overbooking, even legal, is a standard practice among many of them

Tesco’s corporate results above estimates as structural changes are paying off

Icahn via CVR Energy betting big on biofuels subsidies drop

Actually, started to do so before becoming an advisor to Trump

Some of Tesla’s investors pushing for adding independent directors to the Board

To balance Musk’s interests

Qualcomm paying USD 815 mln to BlackBerry over royalties

And keeps fighting Apple over chips

Volkswagen to build a new plant in US (USD 900 mln)

Bankers in Canada are doing well as CIBC is building a new HQ in Toronto for 15k employees

Earnings season

JPMorgan – expecting a raise in profit on better lending activity and activity in capital markets

Wells Fargo – expecting a small dip in profits due to legal costs

While should benefit from upcoming Trump’s easier regulation and higher interest rates

Citigroup – expecting a raise in profits as its global business is growing and higher activity in capital markets

10-yr Trys yield at 2.23%

10-yr Bund yield at 0.19%

Data

US: Initial Jobless Claims expected higher

US: University of Michigan Sentiment Index expected lower

Upcoming:

Apr 23 – French presidential elections

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines – until then we won’t have clearer EU position on Brexit

May 7 – French presidential elections 2^nd round

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

Good luck Champs!

Mr Hawk

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