Apr 5, 2017 - Market Update

Short recap

Asia higher but very safe on Trump-Xi meeting on Thursday

While PMIs better

China back after holiday helping markets

Europe opening lower

BoJ reduced purchases of short term gov bonds (1-3 yr space)

Brexit – households planning to reduce spending

UK planning to abandon the clean energy commitments what may in turn make Brexit talks with EU harder

North Korea firing a missile ahead of Trump-Xi meeting…a smart decision?

Deutsche Bank lost few executives after bonus payout

ChemChina got another green light to buy Syngenta (USD 43 bln) after receiving US antitrust approval

EU to review the deal by Apr 18

Daimler-Bosch to partner in self-driving cars

A self driving Mercedes taxi a dream? Well, not anymore in the future…

Another victim from retail space vs e-commerce fight is Ralph Lauren closing its store on Fifth Avenue

S&P 500 getting cornered by descending trendline and 50 DMA

Trump-Xi meeting or US NFPs a catalyst?

Oil higher on tightening seen in the market

Iron futures up

Gold failed to break through resistance at 1257 (200 DMA) again and staying close though

Needs 10-yr yield to break below 2.30% or get some support from USDJPY falling below 110.00 level

Support at 1236, Resistances at 1257 than 1273, 1292

10-yr Trys yield at 2.35%

10-yr Bunds yield at 0.26%

Global yields higher on rising oil

Peripheral spreads unchanged after FR presidential debate

GE-FR spread at 65, not very changed yet

French bonds can see some bids today

FX implied volatility falling down pointing to markets desperately in need of catalyst

Likely the 2.30% level in US 10-yr Trys can serve as one or outcome of Trump-Xi meeting

If positive, USD may benefit

USDJPY – close to 109.50 level that may be a good entry for reversal

And move higher to attack the Dec/Jan highs around 118.00/50 range

Data

EZ: Composite PMI – no major revision expected

US: ADP Employment Report expected slightly lower

US: ISM Non-Manufacturing Index expected slightly lower

FOMC Minutes – markets looking for any wording on balance sheet reduction

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:

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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