June 8, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher

Oil was heavily hit by strong rise in US inventories and products amid OPEC efforts to cut production/supply

According to Comey’s prepared statement Trump asked him to drop an investigation of Flynn

But nothing new what would surprise markets

Markets getting ready for ECB, Comey, UK elections and Qatar/N. Korea mess

Canada to boost defence spending as US is less reliable

I like this one too as many countries used to take US defence umbrella for cheap money and are not happy with Trump now

Equities

Banco Popular rescue scheme can be use for Italian banks as well

Delphi Automotive partnering with Transdev Group in the field of shuffle service

Apple working to shorten repair times

BlackBerry out with car computer system

Goldman Sachs to increase deposit rates

Bonds

10-yr Trys yield at 2.18%

10-yr Bund yield at 0.26%

DXY

Support at 96.44 (38.2% Fibo) holding

Resistance at 97.85 (50% Fibo)

EURUSD

Recouped the losses after inflation downgrade leak yesterday

As market still believes in hawkish ECB

Resistance at 1.1284, then 1.1300

Offers towards 1.1300 (option barrier), likely lots of stops above

Support at 1.1230 (10 DMA), then 1.1180 (23.6% Fibo)

Expiring options at 1.1200 (EUR 1.7 bln)

Tomorrow we have heavy expiries both below and above 1.1300

USDJPY

110.00 important with heavy option expiries tomorrow too

Support at 109.60 (76.4% Fibo), then at 108.12

Resistance at 110.44 (200 DMA)

GBPUSD 

Still holding well despite upcoming Brexit talks

1.2974 in focus followed by 1.3046

With stops sitting above 1.3050 and 1.3100

Support at 1.2802 (50 DMA), then 1.2768

Stops sitting below these levels

Should see a relief rally after Conservative win

But to fade later as we refocus on Brexit talks

EURGBP

0.8786 and 0.8850 may be in sight

Gold

Resistance at 1300, then at 1308

Support at 1286 (76.4% Fibo)

Upcoming Data/Events

G20 meeting

ECB meeting – getting grow but where is the inflation?

Draghi being alone but inflation data from EZ, US and JP suggest ECB to carry on with ultra-loose stimulus

ECB likely to adjust the risk to economy wording but no change to asset purchases

QE exit likely touched a bit with no precise dates

New staff predictions for 2017-19 to be released

Overall, Draghi will have top dovish performance while bit of admitting of a small shift

Sep meeting to be critical with respect to forward guidance

Former FBI director James Comey to testify before Senate (1400 GMT)

Prepared remarks for semi-official hearing  link

'I need loyalty, I expect loyalty'

"I didn't move, speak, or change my facial expression in any way during the awkward silence that followed."

If Comey doesn’t reveal anything new at the hearing, markets should take it as a risk on and USD to benefit

Overall little impact on markets

UK elections including Scotland, if SNP/Sturgeon wins the independence referendum likely to follow

Not the UK elections count but Brexit talks

2100 GMT -  Exit polls

2200 GMT – First districts counted

02-0400 GMT – decisive amount of districts counted

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

June 13/14 – FOMC meeting – Jun hike probability at 95%, Sep at 28% and Dec at 40%. After Friday’s NFPs Sep hike may be skipped if data doesn’t come strong.

June 15/16 – EcoFin meeting to discuss Greece

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

Good luck Champs!

Mr Hawk

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