Short recap
Asia effected by China downgrade
Europe opening lower
Markets shifting focus from risk off set up to June
FOMC meeting
1st Trump budget sent to Congress, being
ignored as such?
Moody’s downgraded China to A1 from AA3, outlook
to stable from negative
On the back of debt burden and its implications on
public finances, and slowing growth
Only 12% of debt owned by foreigners, should not send
shock waves across EM
Bernanke – BoJ should coordinate fiscal spending
plan with gov to reach 2% inflation
While staying debt neutral
US housing on track
Equities
Bunge declined any talks with Glencore
FiatChrysler officially facing an emission
cheating legal action
Apple and Nokia friends and in love again,
Apple looking to buy more from Nokia
Or more tighter partnership coming? Health, patents,
royalties…
Shell selling its stake in Canadian Natural
(CAD 4.1 bln)
Cyber security demand pleasing BlackBerry
McDonald’s to face some protests about wages,
unions
HP should benefit from more stability in PC market
and effects of restructuring
Bonds
10-yr Trys yield at 2.28%%
10-yr Bund yield at 0.41%
Market getting more comfortable with June rate hike
(probability of 78%, two more hikes this year probability at 43%)
As the yield in 52-week bill auction comes to 1.145%,
highest since 2008
And 2-yr note at 1.316% (strong auction) highest since
2008 (May 10 high at 1.360%)
EURUSD
US yields helped USD
Still need a deeper break of 100 HMA at 1.1182
Support clinging around 1.1160 with orders sitting there
But market is looking at 1.1100 now
Market keeps speculating about ECB change of rhetoric at
June 8 meeting
Despite recent speeches by officials - not open to such
thoughts: QE taper first, then rate hikes
USDJPY
Offers likely above 112.00 (38.2% Fibo at 111.98 and USD
2.6 bln option with strike at 112.00 expiring today)
Ichimoku at 111.81, bids likely below 111.70
50 DMA at 111.32 and 50% Fibo at 111.24 acting as support
Iron ore down approx. 7% on China downgrade
While its inventories keep rising in China
Prices hitting the lows of the cycle, negatively
impacting AUD as well
Crude oil
Oil remains bid but further rise is limited due to US
shale and slowing China
Crucial whether the potential cut is also on export side,
not just in production
Upcoming
ECB’s Praet (0830 GMT)
ECB’s Draghi (1245 GMT)
Fed’s Kaplan (2200 GMT)
Fed’s Kashkari
FOMC Minutes – to bring a bit of hawkish tone as
Fed feels that Q1 data were transitory
Minutes remind market that Fed is on the watch list going
to June meeting again
Focus on interpretation of inflation, taper strategy and
job market (slack/no slack)
Thu – OPEC/Non-OPEC meeting
OPEC meeting 0800 GMT
OPEC/Non-OPEC meeting 1300 GMT
OPEC Joint press conference 1500 GMT
Full schedule link
Expect headlines as attendees arrive
Fri – G7 meeting
May 31 – former FBI director James Comey to testify
before Senate
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
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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