Apr 3, 2017 - Market Update

Short recap

Asia slightly higher

Europe opening higher

JPM and GS cut the US GDP outlook

Fed talking about shrinking of balance sheet in H2

Inflation heading lower in EU but higher in US (PCE)

Institutional investors lowered their exposure to US and UK equities on risks related to fading Trump rally and Brexit/UK brake-up risks

Poland to announce the purchase agreement of eight Patriot antimissile systems soon (USD 7.6 bln)

S&P 500 turning bearish?

Descending trendline but above 50 DMA

First rulings over Volkswagen emission scandal to come soon from German courts

Monsanto to report earnings on Wed, market expecting strong numbers

As farmers look at record planting of soybean and corn, South America doing well as well

Tesla shipped more cars than expected in Q1

Market looking at steeper production rise in H2

If that happens, stock price to move higher

BlackBerry surprised and proved that the move to more lucrative business software field was right decision

Boeing’s largest 787-10 Dreamliner successfully complete its first flight

CFTC speculative positions as of Mar 27:

EUR flat, massive liquidation of USD longs, significant reduction in JPY shorts, GBP keeps record shorts

WTI longs still liquidated

Oil – the sign of relief for bulls is the break of USD 51.95 and USD 54.45 (61.8% Fibo) in both WTI and Brent

EURUSD – support at 1.0570 (23.6% Fibo)

If broken likely to test the lows around 1.0340

DXY – support at trendline

Resistance at 100.50 and 101.00

USDJPY – USD might have run out of steam after reversal on Friday

Resistance at 112.16

Vols trading extremely low

Watch AUDJPY for any signs of downside and potential risk off hedge

10-yr Trys yield at 2.40% (sitting in a mid-range)

10-yr Bunds yield down to 0.32% on a strong change in the stance on inflation expectations and confirmation of ECB’s neutral position in policy tightening

Data

China on holiday until Wed

EZ: Unemployment to print new low

US: ISM Manufacturing Index expecting slightly lower

US: Construction market looking at higher number

Tue:

EU making a formal statement on Brexit about what they want to achieve

Wed:

FOMC Minutes

Thu:

ECB Draghi, Weidmann and Praet speaking (especially Draghi’s remarks on inflation will be closely watched)

ECB Minutes

Trump to meet Chinese president

Trump to use trade to wage on North Korea

Fri:

US NFPs

Fed Speakers this week:

William Dudley (Mon at 1430 GMT)

Patrick Harker (Mon at 1900 GMT)

Jaffrey Lacker (Mon)

Daniel Tarullo (Tue)

Fred Williams, James Bullard

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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