May 12, 2017 - Market Update

Short recap

Asia slightly higher

Europe opening mixed

BoJ is passionate about 2% inflation in 2018

Trade barriers a dead end – comments from Fed’s Dudley

Fed officially commenting on Trump policies

US financial conditions keep easing, thus giving a green light to Fed for June rate hike

Fed just proved that it is very closely watching politics

As they moved their Nov meeting by one day from Tue/Wed to Wed/Thu (Nov 7/8)

Due to mid-term elections on Tue Nov 6

PBOC injected medium term liquidity to support the economy

While keeps tight grip on short term lending to curb speculations

UK politicians still not telling all to British public

May is getting ready for a hard Brexit

Equities

Uber is a transport service and not an app

What is a huge challenge with legal/licensing consequences for Uber in EU market

Rosneft having hard time to acquire Essar Oil (USD 12.9 bln) as company's creditors have the say

Vivendi to merge with Havas

Barclays’ investment bank arm looking to hire up to 100 new bankers as a part of reorganization

Wells Fargo very active in cost cutting but outlook stays not that convincing

Goldman Sachs launching a new dark pool for trading stocks

The private trading venue will be run by Nasdaq

Macy’s and Kohl’s weak earnings proving that the sector is struggling big times with online competition

Bonds

10-yr Trys yield at 2.38%

10-yr Bund yield at 0.43%

DXY – a bit mixed yesterday

But well above 200 DMA (99.17)

Support also at 99.26 (61.8% Fibo)

Rising trendline acting as a resistance now

Next is 101.00 (76.4% Fibo)

EURUSD

As yesterday the 1.0850 is pivotal

Followed by the 1.0825/30 area (21 & 200 DMA) – if broken, likely to see more downside

1^st round FR election gap is the next to watch

USDJPY

Next 115.00/50 and 118.60 highs may be in focus

Support at 113.76 (76.4% Fibo), 113.00 (100 DMA) and 113.09 (10 DMA)

Gold

Resistance at 1228 (100 DMA), 1230 (50% Fibo) and 1255 (61.8% Fibo)

Support at 1204 (38.2% Fibo)

Upcoming

US: CPI

Core CPI m/m 0.2% exp vs -0.1% prior

Core CPI y/y 2.0% exp vs 2.0% prior

CPI m/m 0.2% exp vs -0.3% prior

CPI y/y 2.3% exp vs 2.4% prior

US : Retail sales

US : University of Michigan Index

Fed's Evans speaking 1300 GMT

Fed’s Harker speaking 1630 GMT

G7 Fin Mins & Central bankers meeting

May 25 – OPEC/Non-OPEC meeting

June 8 – ECB meeting

June 8 – UK elections

June 11/18 – French Legislative (Parliamentary) elections (a big question mark for Macron to gain majority)

June 13/14 – FOMC meeting – market pricing rate hike above 90%

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

Good luck Champs!

Mr Hawk

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