Wednesday 19 April 2017

Apr 19, 2017 - Market Update

Short recap

Asia lower
Europe opened mixed


GBP up yesterday as market speculates that snap elections can remove the political uncertainty
And give a stronger mandate for May in Brexit talks
PenceNK to expect an overwhelming and effective response
China shadow banking back at full speed
China eased capital flow controls
Foreign investment in Canada hitting high of CAD 39 bln on M&A
Geopolitical events and upcoming French election driving investors to safe heavens (gold, bonds)

FTSE 100 below recent lows on stronger GBP
BMW see China sales to grow 10% in 2017 while globally should rise 5-5.5%
Credit Suisse still in a clash with its shareholders over top execs bonuses

Earnings season

Goldman Sachs disappointed on trading revenue what impacted markets yesterday
Lower trading activity was to blame as the bank doesn’t benefit from lending as competitors do or additional trading related business.
Is Goldman Sachs loosing a market share?

Morgan Stanley – expecting positive surprise on more active bond trading and cost cutting

American Express – expecting a negative surprise due to competition margin squeeze and rising costs

BlackRock – more than profit report markets will scrutinize cost cutting and reorganization plans
Especially at active stock picking division

Others: Qualcomm, CSX, Abbott Laboratories, eBay, U.S. Bancorp


Bonds


10-yr Bund yield at 0.16%
10-yr Trys yield at 2.18%

Touched 2.1629% - the lowest since Nov 2016 elections
The area of support is around 2.1346% (38.2% Fibo)
The levels around/below 2.20% may be a good place to start to sell bonds
But the appetite for safety stays strong for now

Don’t forget about Fed hiking and trimming bond portfolio
George (Fed) supporting bond taper this year
June hiking priced at 43%

EURUSD daily – getting crowded

GBPUSD daily – no risks of Brexit negotiations removed
More to go? Will the 1.2800 hold? How long?
The move occurred on very thin liquidity
After surprise announcement

Data

EZ: CPI – no surprise expected, should stay in line
Beige Book (Fed)

Hansson (ECB) speaking (0800 GMT)
Coeure (ECB) speaking (1200 GMT)
Praet (ECB) speaking (1430 GMT)
Rosengren (Fed) speaking (1630 GMT)

Upcoming:

Apr 23 – French presidential elections
40% still undecided
Official results at 1800 GMT
Exit polls from midday but on BE and CH media only
More precise estimates around 1600 GMT

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 2nd round


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

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