July 31, 2017 - Market Update (JPY of interest as safe heaven after CHF moving, MSCI not happy with Chinese suspended companies, Trys yield lower on softer GDP, Volkswagen not in a rush to sell Ducati, JP fund managers keep trimming equity exposure)

Short recap

Asia in green

Europe opening higher

Trump & Abe talked North Korea

JP fund managers kept decreasing equity holdings in July, especially North American assets

JP-US may discuss trade and currency as a one package

JPY may be of interest as a safe heaven choice after CHF is moving on ECB normalization

Equities

MSCI warned Chinese companies being suspended for trading for too long are at risk of getting excluded from index

Volkswagen not in a such a rush to sell Ducati and Renk

Audi going more green with EUR 10 bln cost cuts to fund green technologies

Bonds

10-yr Trys yield at 2.2.28% up from 2.30% Friday

Yields lower on the back of softer GDP figure and negative revision of Q1 GDP

10-yr Bund yield at 0.54% down from 0.53% Friday

Cleared earlier losses after higher CPI print from German

Greek 5-yr notes issued at 4.625%, lower then last time when they had traded

COT report (as of last Tue)

EUR longs at 91k vs 91k previously, no change

GBP shorts at 26k vs 16k previously, increased

JPY shorts at 121k (USD 14 bln) vs 127k previously, decreased

EURUSD

Market still skewed to go higher but serious caution is warranted

To watch this week’s EZ CPI, US PCE and NFPs as there is an interest to go short

But if we get lackluster prints the short squeeze is close

Close below 1.1653 (10 DMA) would suggest slowing momentum

Support 1.1621 (23.6% Fibo), 1.1615, then 1.1580

But breaking the 1.1600 can open the door to 1.1300

Resistance 1.1750, 1. 1776 (high), 1.1794 (200 WMA), 1.1810 (38.2% Fibo)

USDJPY

Asia saw some JPY buying, lower US yields in play too

Getting support from Ichimoku

Bids sitting at 110.50, more at 110.00 (around option barrier)

Stops likely below 110.00 and above 110.80, then naturally above 111.00

Resistance 110.97 (61.8% Fibo)

Gold

Resistance at 1274 (76.4% Fibo)

Support at 1261 (61.8% Fibo) ad raising trend line

Data/events

Wed

Fed’s Mester (1600 GMT)

Fed’s Williams (1930 GMT)

Fri

US NFPs – 173k exp

Aug 24-26 Jacskon Hole

Draghi’s show up highly expected in the light of potential tapering

Any clues on EUR 60 bln monthly purchase being taken down o 40…or?

Sep 7 - ECB

Sep 19-20 FOMC

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

Read More

July 28, 2017 - Market Update (Bad day for Trump - no Russia sanctions, no VAT, no BAT, no Obamacare repeal, EURUSD hitting strong multiyear resistance zone, USDJPY played by expiring options today, US GDP to surprise, NASDAQ down on rotation out of Techs, Apollo rising USD 25 bln)

Short recap

Asia lower on risk off

Europe opening

Mnuchin to support steps not tough talk against FX manipulators

As it hasn’t been working for years

Senate rejected new sanctions against Russia

Not even watered down Obamacare repeal bill can pass through Senate

Another huge blow to Trump after no VAT and BAT implementation

Those two got rejected due to the need to overhaul the whole tax system in US

Equities

NASDAQ down on rotation out of Techs

Amazon hit by cost jumping

UBS cautious despite good wealth management business

Credit Suisse – profit jumps

Apollo’s new private equity fund raised USD 25 bln for investments in North America and Western Europe

Airbus not happy with delays caused by Pratt & Whitney production

Cameco settled with IRS at a fraction of original claim but heavy fight with CRA is waiting

Any correction in stocks to be triggered by upcoming tapering? The stock markets were moving higher hand in hand with QEs all around the world. What’s next?

Few facts:

Had a nice bull market rolling over the years

Market multiples above historical levels

Equities vs fixed income yield differentials are low

M&A activity hitting high

Upcoming tapering

Extremely low volatility will not last

Trump administration not able to deliver

Earnings

Earnings season so far good on weaker USD

Merck, AbbVie – to be watched as competition is rising

Exxon Mobil, Chevron – market expecting a profit print

Bombardier – cash flow, CSeries deliveries and potential joint venture with Siemens to be questioned

Baker Hughes, Barclays, Goodyear, American Airlines

Bonds

10-yr Trys yield at 2.30% up from 2.28% yesterday

10-yr Bund yield at 0.53% down from 0.55% yesterday

EURUSD

Down from yesterday on USD buying

Underlying tone stays pro-EUR, US GDP in watch

Support of note 1.1623/21 (10 DMA/23.6% Fibo), 1.1615, then 1.1580

100/200 HMA may also see some buying

Resistance at 1.1750, 1. 1776 (high), 1.1794 (200 WMA), 1.1810 (38.2% Fibo)

USDJPY

Sitting on 111.00 with likely dip demand around 110.80

Option expiries at 110.80 (USD 1.2 bln), 111.00 (USD 1.4 bln)

Likely to stay within the sight of expiry levels unless US GDP moves the market heavily

Lots of bids at 110.00

Gold

Durable goods orders and higher USD put pressure on gold yesterday

Traders see Fed to announce taper in Sep

Resistance at 1261 (61.8% Fibo)

Support at 125 (50.0% Fibo)

10/50/100 DMAs converge to 1250 level

Data/events

US Q2 GDP +2.6% exp vs 1.4% previous

Some banks revised up expectations on the back of yesterday's much better Durable goods orders

Fed’s Kashkari (1720 GMT)

Aug 24-26 Jackson Hole

Sep 7 - ECB

Sep 19-20 FOMC 

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

Read More

July 27, 2017 - Market Update (FOMC on summer vacation, playing safe, DXY close to support levels, EURUSD close to 200 WMA (1.1794), Gold/gold miners going higher? Heavy Deutsche Bank, Facebook enjoying the ride, Cameco - weak uranium price making heavy print)

Short recap

Asia up on dovish feeling Fed (stocks, bonds and commodities up)

Europe opening flat

ECB’s Nowotny – some room to reduce asset purchase from Jan 2018 but not stopping them

EU warned US over new sanctions against Russia as energy security is on the table

UK’s Rudd promised to keep access for EU workers

UK’s car industry production down 14% in June

US New home sales still growing but at a softer pace

FOMC – on summer vacation

Market feeling a dovish bias and lower likelihood of another 2017 hike

Balance sheet reduction to start relatively soon (market expecting announcement in Sep)

Repeated that inflation to rise to 2%

But admitted undershooting of 2% target

Equities

Daimler thinking about splitting some divisions

Third Point betting on Alibaba again as they see opportunities

No new sales of petrol/diesel cars in UK from 2040

Deutsche Bank to list its asset management arm but not before late 2018

Foxconn to build a new plant in US (3000 new jobs)

AGCO buying farm equipment division from Monsanto

Earnings

Samsung pretty comfortable with chip outlook, reported a record profits

Facebook doing well in mobile ads (up 50%), while strengthening its attraction as a social media

Amazon.com – to report better revenue supported by retail and cloud. Hungry a bit? What about the Whole Foods Market acquisition – any hints?

Procter & Gamble – organic sales should help the numbers

Celgene – investors are positive, would like to learn more on licensing deal with BeiGene

Cameco – results to be impacted by still ongoing fall in uranium prices. Market may also be interest in the progress/resolution of Tepco issue?

MasterCard – investors are positive

Intel – investors are positive by data center business will scrutinized

Twitter – market is expecting a decline in revenue on user growth stagnation

Deutsche Bank – investor worry about the results as the bank undergoes restructuring, Brexit and Trump Russian ties. All of that is also combined with ECB’s investigation of Qatar royal family and Chinese HNA who are bank’s largest shareholders.

Bonds

10-yr Trys yield at 2.28% (up)

10-yr Bund yield at 0.55% (down)

DXY

Offered tone, sentiment getting more bearish

As cautious Fed and political mess in Washington pressure USD

Close to support levels

EURUSD

Marching higher, no clear top yet, outside day reversal

Watching: 1.1750, 1.1794 (200 WMA), 1.1810 (38.2% Fibo) and then 1.20/2200

Likely 1.1800 will be respected as ECB to turn dovish soon too

On falling inflation and missing wage growth

So the 1.1750 and 200 WMA may be seen as the top

Support of note 1.1615, then 1.1580

USDJPY

Pressured by lower US yields, long liquidate seen

Sitting on 111.00 with likely dip demand around 110.80

Option expiries between 111.00-111.30 (more than USD 1.7 bln)

Life insurers with lower interest in foreign bonds

Has some room to get and stay above 114.00 toward year end

Gold

Resistance at 1264 (38.2% Fibo)

Support at 1255 (50.0% Fibo)

Watch also ascending and descending trendlines

As it trades above 1250 (100 DMA) we may see opportunities from a long side

Not only in spot but also in gold mining stocks

On the back of low inflation, weak USD and Trump

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

Read More

July 24, 2017 – Weekly Commodity : Opec meeting and Crop Progress report today will be crucial

The holiday mood (and liquidity) was felt all over the commodity markets. Traders are chasing news and this is bringing volatility which is however quickly fading and volumes are declining. The Bloomberg Commodity index increased 0.3% the last week with precious metals and the part of the soft sector among the biggest winners, while the energy and grain sectors were searching for direction.

Crude oil

While crude inventories in the US are on decline, price of crude oil dropped on Friday on reports that OPEC Production could have increased in July by 145K bpd mainly driven increased supplies from Saudi Arabia, UAE and Nigeria. As OPEC having problem with compliance traders will watch closely the OPEC Monitoring Committee meeting and its outcome on Monday. There are rumours that Saudi Arabia could be pushed to cut their crude export to the whole world by 1mil bpd to make room for Libya and Nigeria. This could be hugely supportive for both WTI and Brent.

Last week the US field crude production increased again and it’s approaching the 2015 summer peaks. While rig count declined marginally, the increasing oil production is still bad news for producers. Money managers were increasing their net long for the last few weeks which is the result of liquidating shorts mainly. Is it a major change in the direction or just a preparation for another bear run, I think we will see in a few day or maybe 2 weeks. For bullish confirmation MM definitely need to increase longs too.

Technically no change for now, despite ugly daily chart where a double top formed recently.

Corn

Grain traders are awaiting the USDA Crop Progress report Monday ET 4PM where the main number will be the quality grades for each crop. Due to the above average temperature the main concern in that the USDA corn yield estimate last week was too optimistic and there will be a drop much below 170 b/a. This with an already decrease acreage for the crop could mean a significant reduction in the ending stocks for 2017/2018 marketing year.

Sugar

The sweetener was trading sideways due to lack of news and stable to higher production data from Brazil. In India, which is the largest sugar consumer of the world, the production is set to rebound as the above average monsoon rains are supporting the growth of sugar cane started to be crushed from October. Corrective upside move toward 16.50-17.00 possible based on technical but overall negative outlook medium term (1 year).

Good Luck guys and remember to watch your risk and be consistent. Oh, one more thing! If you are now on vacation, please enjoy your holiday and don’t trade… rest, and regain energy, you’ll need it when you’re back.

Take care

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

Read More

July 18, 2017 - Market Update (Trump not able to deliver anything, EURUSD above 1.1500 but below 1.1600 ahead of ECB, 10-yr Trys yield positioning ahead of FOMC, Gold shorts to get squeezed?, UniCredit selling EUR 18 bln of bad loans, ETFs outflow to trigger next downturn, Citi in Frankfurt)

Short recap

Asia in red

Europe opening lower

After 2^nd Obamacare repeal vote failure

Doubts about ability of Trump administration to deliver anything on the rise

Markets getting more comfortable with Fed slowing its hiking pace and all USD negative Trump news

Since US elections S&P 500 is up 13.7% vs Gold being down 7.7%

Equities

Lufthansa rising profit target on higher summer bookings

UniCredit selling EUR 18 bln of bad loans to Fortress and Pimco

Citigroup picking Frankfurt as EU base for trading and sales after Brexit

Rio Tinto lowering iron ore shipment forecast due to weather and infrastructure upgrade

Cutting fees by BlackRock doesn’t help earnings and getting new cash

But watch the flows to ETFs and passive investments as they may trigger next market decline

FedEx warning about cyber attacks impact on earnings

Valeant close to selling Obagi (USD 190 mln)

Earnings

BofA – market is already prepared for lower trading earnings, so the cost cutting plans are a questions

Goldman Sachs – lower trading and investment banking volumes to make a print on results

Johnson & Johnson – Obamacare repeal, sales and benefits of Actelion acquisition (USD 30 bln) to be scrutinized

IBM – markets are more and more negative

Lockheed Martin – expecting better results as governments spend more money on defence, guidance for 2018 may bring more light

Harley-Davidson – not to impress on lower sales in US

Bonds

10-yr Trys yield at 2.30% - drop is likely positioning for upcoming FOMC next week

10-yr Bund yield at 0.58%

EURUSD

Obamacare repeal mess/failure creating strong reaction along with stops at 1.1500 pushing USD lower

But political stuff likely off the table soon as we head to ECB on Thu

Next resistance 1.1580, then 1.1615

Followed by 1.1714, 1.1750

Staying above 1.1600 is way overstretched, 1.1615 should hold ahead of ECB

USDJPY

JPY experienced strong buying across crosses

Bids may be sitting above 112.00

Expiring options around that level too

50/100/200 DMA at 111.84/78/84 very close

Resistance at 112.31 (38.2% Fibo) and 113.14 (23.6% Fibo)

Gold

Above 200 DMA at 1229, 1234 (76.4% Fibo)

If we see another move higher, shorts may get well squeezed

From macro perspective (US data), has a room to go higher

Rising trendline, 1245 (61.8% Fibo) and 50/100 DMAs (1248) acting as resistance

Data/Events

BoE’s Carney (1330 GMT)

Thu

ECB meeting – no change in policy

Dovish wording from may push traders to reassess their stance as EUR had a very nice run

And is hitting few important resistances

Very likely Draghi doesn’t want to repeat his hawkish speech from Sintra sending 10-yr Bund yield above 0.50% from around 0.25% level

Markets pricing a 10 bps hike of deposit rate (-0.4%) over the next year

July 26 – 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

Read More

July 17, 2017 - Weekly Commodity: Commodities boosted by fundamentals and falling dollar

The commodities tracked by Bloomberg Commodity index (BCOM:IND) rallied 1.1% on mixed to worsening fundamentals and weaker dollar. Speculators cut a significant part of their short positions up to Tuesday but commodity prices surged especially the last day of the week as traders were adjusting positions to the holiday liquidity.

Crude Oil

Oil had a pretty good week. According to EIA weekly Petroleum Status Report, crude oil inventories fell by 7.6M barrels while motor gasoline stocks decreased by 1.6M barrels however both staying in the upper half of the average range for this time of the year.

On the other hand the US production after being flat for a few weeks it jumped 59K bpd last week, which could be simply the result of improved weather conditions in the Gulf of Mexico. However the drop of average number of weekly opened oilrigs from 10.5 in the Q1 to only 7 in Q2 signals it could be a challenge to reach 10M bpd US production around the year turn.

The IEA in his monthly report stated that the compliance of OPEC members with the production cut also decreased to 78% while the non-OPEC countries increased to 82%. In June OPEC output rose by 340K bpd after Saudi Arabia, Libya and Nigeria increased flows. There was not much reaction from the market after these figures  maybe because according to the same report, the world crude oil demand growth accelerated to 1.5M bpd in Q2 after a “lacklustre” 1M bpd increase in Q1.

Technically the medium term picture is still rather bullish to me although crude established a clear downtrend channel. In my view what we see is a countertrend to the main trend forming bullish flag pattern. The upper channel line will be however critical as there is also a very strong resistance zone at $50-52. I expect the prices to test $50 next week. This could be a nice entry for a quick short with a target at $47-45 ahead of the breakout from the channel.

Corn

In the grain markets now clearly the weather is in the drivers’ seat. After 2 weeks of rally the corn bulls gave up their fight. The US Department of Agriculture in the latest Wasde report stuck to the strong corn yields estimates above 170 bushels per acre. This triggered fresh selling right after that money managers went net long in corn. The official estimates were well in contrast with the market expectations (btw 165-168 bushels per acre) and caught traders off-guard.

The US Corn belt weather forecast showing above average temperature for the next week pushed back the bulls in the game. The reason is that the coming week will be crucial for the yields as the corn plants are in the important pollination period and hot and dry weather could be very harmful. The revival of grains was strengthened by the weakening dollar following the soft inflation data on Friday.

The technical picture is rather mixed, still in uptrend but ... the bulls didn’t manage to close above the earlier uptrend line which was followed by a huge red canlde (engulfing pattern). Traders are apparently chasing the news which creates very tough trading conditions with mixed signals. Currently it looks more to the downside but the Friday buying could mean a change in the sentiment...again.  In my opinion there is still a good chance for a rally if price of the closest expiry stay above 360cents per bushel. Here the weather is a key factor of uncertainty and traders are getting more and more nervous which is visible from the long green and red candles following each other.

Sugar

Stronger brazil real (or weaker dollar) and the increased fuel prices in Brazil were the two main drivers of sugar prices which surged last week despite an increase import duty on sugar in India from 40% to 50%. Also worth to mention that Petrobras can from July adjust gasoline prices daily which could eventually mean smaller but more frequent changes and less volatile impact on sugar.

The speculative net short little changed until last Tuesday however I expect some more significant short covering took place towards the end of the week. We will know more next Thursday when new COT data will be released. Although the market may seem to be oversold but there are reasons to be pessimistic. In India the raw sugar production is expected rise by 25% and the refined sugar production from Europe around 20% in 2017-18. This will mean a significant boost to supply and support for bears.

Technically sugar bounced back from 12.50 support and on the daily chart now created an inverse head and shoulder formation. After the outside week (also huge engulfing pattern) 2 weeks ago it seem that a correction move ahead will be confirmed if the inverse HS pattern will be completed. Price targets could be 15.50 (Fibo) 16.50-17.00 (HS depth) however one should be very careful with position sizing as fundamentals strongly support bears in medium term, and with a long position you would trade against the trend...

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

Read More

July 12, 2017 - Market Update (All about Yellen today, Merkel flying EUR high, Siemens chasing their turbines, Chinese banks another opportunity, Trump and Russia (but Junior this time), 10-yr Bund yields jumping above 0.60% mark)

Short recap

Europe opening higher

Trump Jr – Russia blow here but markets focus on Yellen

Trump administration constantly distracted, not focussing on proper work

Gary Cohn Trump’s candidate to replace Yellen

Fed’s Mester likes taper sooner rather than later

Merkel putting pressure on ECB to raise rates

JPM’s Dimon – taper can caught people by surprise

Chinese media speculations – PBOC should widen the 2% CNY daily trading band

Funds kept selling USDCNH overnight

Quarels as a Trump Fed nominee getting first oppose comments

Due to his ties to Wall Street and possibility that oversight of huge banks would be softer

Moody’s – Lack of clarity in Brexit making question marks around UK’s credibility

Equities

BlackRock - Investors need to take more risk  link

US asset managers underallocated EM stocks 

Total to invest USD 3.5 bln in Qatar offshore oil

Siemens chasing their turbines in Crimea even legally

Chinese banks underperformed their global peers but offer lower valuations and decent yields

Regulators were out saying the risk is in control

Snap hit by downgrade from Morgan Stanley (underwriter) on slower ad development

Instagram is biting in to Snap’s largest user base among young

Bonds

BoJ increased bond purchases in 3-5 yr space

10-yr Trys yield at 2.35% but 5-yr/10-yr may experience some correction after recent move higher (support around 2.30%)

10-yr Bund yield at 0.61% - sharp jump from around 0.55% after yesterday’s comments from Merkel

EURUSD

Merkel, Trump Jr. – Russia thing, dovish Fed comments behind the move

1.1450 broken, on the way to 1.1580 as short term longs were open

Likely looking at 1.1615 as long as 10 DMA (1.1407) not clearly broken on dips

Next the 1.1714 and 1.1750 may come

Bear in mind that any rally above 1.1600 is way overstretched and likely not lasting

All about Yellen today, watch especially her remarks on inflation

But market is very very complacent about Fed moving…

USDJPY

Resistance at 114.36 high

Stops at 113.50 hit but dip demand helped

Support at 113.30 (10 DMA), 113.05 (76.4% Fibo), descending trendline

Dips below 113.00 may be a good point to renter longs

But 112.00 level can serve as a stop level

Expiring options USD 1.3 bln between 113/114.00

Market is very long USDJPY but short gamma

And 50/100/200 DMA at 111.89/78/66 very close

Again all about Yellen today

Gold

Support at 1214 low held, no more technical selling through

Resistance at 1231 (200 DMA), 1234 (76.4% Fibo) and rising trendline

If broken along with 16.20 in Silver we can see more short covering

But Yellen today again…

Data/Events

Yellen testifying (1400 GMT) before Congress Committees today/tomorrow (prepared text to be released at 1230 GMT)

Likely to confirm the continuation of normalization

Do financial conditions continue to ease

Job market and inflation

Balance sheet reduction – suspension of reinvestment policy coming announcement in Sep ?

Another rate hike in Dec ? Currently priced at 49%

ECB’s Linde 

ECB’ Dalhau, Dombret

Fed Beige Book (1800 GMT)

Fed’s George (1815 GMT)

July 20 – ECB meeting

July 26 – 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

Read More

July 10, 2017 - Weekly Commodity: Oil and precious metals dropped while crops rallied

Despite the rally in grains the Bloomberg Commodity Index dropped 1.5% last week as oil and precious metals fell. The weakening of the dollar couldn’t give sufficient support to the commodity bulls as fundamentals were lagging.

Oil

As Nigeria and Libya, exempt from the OPEC deal, are increasing production, the cartel fails to cap the production. The US rig count increased again after last weeks’ slight drop but according to news the US production has risen in Q2 only by 139k bpd which shows a falling momentum compared to 439k bpd rise in Q1. This drop was partially caused by the Tropical storm Cindy which resulted in disruptions on offshore oil platforms as well as delayed transportation in the Gulf of Mexico. Most likely this caused also the “surprise” drop in crude and fuel inventories which should really a surprise if one’s watching the news…

Technically there is still a chance the market will turn north to complete the 5^th wave however it looks at the moment more bearish at least short term due to a possible increase in Crude inventories after the recovery of production in the Mexican Gulf. The summer has however just began and demand should increase with the ongoing holiday season on the northern hemisphere. Any military escalation of the Qatar case would add support to the bulls. In this relation don’t forget the Aramco IPO where at the Saudi Arabia has a major interest in increasing oil prices…

Corn

Weather concerns and drop in planted acreage were the main movers of grain prices the last 2 weeks. Corn and wheat were planted in smaller acreage as expected while soybean acreage didn’t rise as much as expected. The biggest problems seems to be developing in the wheat market as according to some analyst only 90-92%% of the high protein hard spring wheat will make it to the harvest due to the extremely dry weather expected in the north wheat belt in the US. This is much lower than the Official USDA estimate of 96%.

The surge in wheat prices helped to push higher the corn and soybean too. The official USDA Crop progress estimate on Monday however showed improved corn conditions with 68% of crop good and excellent vs. expected decline to 65%. Now traders are focusing on the corn yields and the question is how much it will fall from the last years’ records. 165 bushel per acre could be the level to watch as this would bring the ending stocks below the psychological 2bn bushels for the 2017/2018 marketing year. So watch the weather in the Corn Belt, the key will be if the drought will continue through July or will come some rains.

The front end corn contracts managed to close above 390cents and while there was a gap up on Monday and the following days the trading was very hectic (check long shadows on daily candles). Managed money covered its shorts mostly but new longs were not built which shows that there is no real sentiment change rather cautiousness. According to some news during the weeks there was significant commercial selling which can signal there are more hurdles ahead of the bulls.

Sugar

The state owned Brazilian energy giant Petrobras cut gasoline prices again last week again, now by 5.9% which will pressure ethanol prices and ethanol parity, resulting in more profits producing sugar for the Brazilian sugar mills. And the pressure on sugar will increase later this year as in October the EU will end limits on production quotes. According to the producers on the oldest continent this could result in an increase of European sugar production by 20-25% in 2017-2018 season. Adding the expected 25% increase of sugar production in India there seems to be more troubles ahead for the sweetener in the next couple of months unless the weather will not help to lift prices.

Managed money on the other hand reached net short levels close to record highs and in this environment a short covering could trigger a short term volatile rally. The head and shoulder formation reached profit target and some profit taking took place since that but at least according to the COT data from 3^rd July there was no change in net short of money managers positioning.


Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

Read More

July 7, 2017 - Market Update (Good NFPs may trigger collapse in bonds/stocks, EZ stocks under pressure from higher yields/EUR, BoJ buying and buying, ECB not respecting allocation key, thus pushing core yields/EUR higher, EUR - make it through 1.1500 or ? Berkhsire to buy Oncor, Celgene/BeiGene to cooperate)

Short recap

Asia in red

Europe opening lower

Flash crash in Silver

Trump to meet with Putin

Very good US NFPs numbers may trigger collapse in bonds and stocks

As the risk of rising rates further will all implications will be higher

ECB Minutes with some tightening of financial conditions

Central Banks’ Reversals Signal the End of One Era and the Beginning of Another (Bridgewater CIO)  link

Equities

EZ stocks under pressure from higher rates and stronger EUR (like capital/debt intensive utilities)

But banks/financials doing well

In general financials (higher profits), health care (defensive play), consumer staples and techs (low debt) generally doing better

China pushing GM, Mercedes and Volkswagen to recall vehicles with air bags produced by Takata

Volvo selling 25% stake in Deutz

Berkshire to buy Oncor (utility)

Microsoft to cut 30k jobs (mostly outside US)

Dish Network and Amazon.com in talks about partnership

Knee surgery done by robots? Top medical techs working on…

Axis Capital to buy Lloyd’s Novae

EU to fine Merck, GE and Canon

Celgene and BeiGene agree on tumor cancer treatment cooperation

Bonds

BoJ to purchase an unlimited amount of 10-yr bonds at 0.11% yield

10-yr Trys yield at 2.39% vs 2.33% yesterday morning

10-yr Bund yield at 0.57% vs 0.47% yesterday morning

Broke an important 0.50% level, next is 0.60% and 1.00%

Looks like the move higher in core EZ bond yields comes from ECB

As it has not purchased assets fully in line with allocation key

What in turn supports EUR

Higher gov bond yields represent a risk for bonds with long durations and EM as such

EURUSD

Bounced off the pivot 1.1300 (post election high)

As mentioned on Monday getting way over 1.1600 not sustainable

Trading right below strong resistance from descending trendline and 1.1445, then 1.1615 high

If above resistances are broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

In order to look at 1.1580 need get through 1.1450

On the top of very strong resistance range

1.1400, 1.1344 (38.2% hourly Fibo) and 10 DMA at 1.1365 providing some support

But bear in mind that financing long EURUSD positions is pretty expensive swap wise

USDJPY

Pretty resilient in risk off mood

Broke descending trendline

Resistance at 114.36 high

Support at 113.05 (76.4% Fibo)

Gold

Getting support from geopolitical risks

Support at 1214 low

Resistance at 1231 (200 DMA), 1234 (76.4% Fibo) and rising trendline

Data/Events

US NFPs

Payrolls 179k exp vs 138k prior

Unemployment rate 4.3% exp vs 4.3% prior

Earnings 0.3% exp vs 0.2% prior

Participation …. vs 62.7% prior

Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting

To discuss terrorism, free trade and climate

Trump meeting Putin while Merkel hosting them

Trump readying for a steel fight and withdraw from international talks on financial regulation

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 GMT)

July 20 – ECB meeting

July 26 – 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

Read More

July 6, 2017 - Market Update (Trump in Poland, EUR - lower global use on high hedging cost, EURUSD - focus on Minutes & 1.1300 with lots of expiring options, USDZAR - central bank to be nationalized, Gold supported by geopolitical risks, ExxonMobil, Shell, Total courting Qatar gas, Volvo - green from 2019, Nokia sharing patents with Xiaomi)

Short recap

Asia mostly in red

Europe opening higher

Trump in Poland to reassure about commitment to Eastern Europe through gas and military support

Before meeting with Putin

Also to outline the future relationship with Europe as such

FOMC Minutes show a split and no timing on balance sheet reduction

US ready to use force against North Korea but looking for a diplomatic solution

EUR experienced lower use as international currency and as a funding currency last year

Due to high hedging cost against its decline using swaps

Equities

ExxonMobil, Shell, Total getting closer to win the big share of a Qatar gas pie despite local tensions

Vantiv buying Worldpay for USD 10 bln

Marc Cohodes known for his short selling activities now targets Exchange Income after taking on Valeant and Home Capital previously

Stating that rich dividend is not supported

Novo Nordisk having some safety issues with insulin pens in Canada

Nokia signing a patent deal with Xiaomi (guys don’t forget that Nokia is sitting on thousands of patents that can/do bring a nice cash flow)

Car sharing biz getting tougher as Avis’ Zipcar leaves Austrian market after Car2Go (Daimler) and DriveNow (BMW, Sixt) are tough to take on

Volvo to sell hybrid or electric cars from 2019 only

Such moves to create pressure within the industry as well as on auto parts producers

Tesla breaking down the rising trendline on lower demand

Bonds

10-yr Trys yield at 2.33%

10-yr Bund yield at 0.47%

DXY

Support at 94.70 (76.4% Fibo)

Resistance at 96.44 (61.8% Fibo)

EURUSD

Market watching 1.1300 (post election high) on the back of recent correction and today’s ECB Minutes

10 DMA at 1.1336 and 1.1344 (38.2% hourly Fibo) providing some support

Further resistance/support levels come from hourly Ichimoku

But large expiring options sitting at 1.1290/00 (EUR 2.1 bln), 1.1320/30 (EUR 1.5 bln)

USDJPY

Flat yields helped to mute the move higher

Resistance from declining trendline

Support at 112.24 (61.8% Fibo), 113.05 (76.4% Fibo)

USDZAR

Yesterday’s announcement of intention to nationalize the South African central bank which is privately held

Pushed the cross spiking to 13.5000

Resistance 13.4253 (200 DMA) and 13.5547 (23.6% Fibo)

Support 13.3166 (38.2% Fibo)

Gold

Getting support from geopolitical risks

After the sell off and JPY stabilisation

Support at 1214

Resistance at 1231 (200 DMA), 1234 (76.4% Fibo) and rising trendline

Data/Events

ECB Minutes

Fed’s Williams (0745 GMT)

ECB’s Praet (1000 GMT)

Fed’s Powell (1400 GMT)

Fed’s Fischer (2330 GMT)

July 7 – US NFPs

July 7 – Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting

Trump meeting Putin while Merkel hosting them

Trump readying for a steel fight and withdraw from international talks on financial regulation

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 GMT)

July 20 – ECB meeting

July 26 – 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

Read More

July 3, 2017 - Market Update (Trump, Xi, Abe, China-Hong Kong bond connect on, Banco Popular clean up, Buffett banking at BofA, FX markets to become very sensitive to data beats/misses, Trump to fight the steel and bank regulation at G20)

Short recap

Asia in green

Europe opening higher

Overall markets are still digesting last week’s movements

Low liquidity due to July 4 US Independence day holiday

Japanese PM Abe hit by the significant loss in Tokyo elections, likely to face more troubles in the future

Trump had a call with Xi and Abe discussing North Korea and pushing China on trade issues

Abe’s advisor was out with a new BoJ governor idea

US trade deficit report delayed again as Trump is getting ready to fight steel at G20

Investors lowered their exposure to US stocks on valuations

While increased EZ assets to 2yr high

US data keep disappointing, lower expectations likely to come

What may turn into new data beats

Qatar getting 2 more days to fulfill requests

China-Hong Kong bond connect up an running

Linking foreign investors with USD 9 trln Chinese bond market

Citi of London delegation on the way to Brussels

But what the welcome there would look like?

Equities

After taking over Banco Santander Banco Popular is looking to sell EUR 30 bln of nonperforming assets in order to clean up the mess on its books

BMW is testing UK as an investment destination as it moves the decision about where to build a new electric Mini car

Buffett is taking it at full speed at BofA

Deal of Nike with Amazon is a first major hit to retailers

Baidu looking at autonomy vehicles field

Bonds

10-yr Trys yield at 2.33% (up from 2.28% on Friday morning)

Posted outside week

10-yr Bund yield at 0.47% (up from 0.46% on Friday morning) – on the way to reach the high from March at 51 bps?

Yields are up as markets have less worries about low inflation pressures

And see normalization of rates in Europe too

COT report

EUR longs at 59k vs 46k previous week

JPY shorts at 61k vs 50k previous week

GBP shorts at 39k vs 38k previous week

USD longs hitting 1yr low, cut by 50%

DXY

Lower summer liquidity and more sensitive market reactions to data beats/misses to be part of the game

Support at 94.70 (76.4% Fibo)

Resistance at 96.44 (61.8% Fibo)

EURUSD

USD weakness likely to continue this week too

But getting way over 1.1600 not sustainable

Trading right below strong resistance from descending trendline  and 1.1495 & 1.1615

If broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

Getting through 1.1450 will help us to look at 1.1580

USDJPY

USJDPY lagging higher yields

But staying resilient after Abe’s Tokyo defeat

Breaking 112.92 can open the door to 114.36

Support at 112.24 (61.8% Fibo),

Resistance at 113.05 (76.4% Fibo)

Gold

Suffering from CBs upcoming normalization

Support at 1233 (200 DMA) and 1214

Resistance at 1245 (61.8% Fibo)

Data/Events

Fed’s Bullard (0830 GMT)

July 5 – FOMC minutes

July 6 – ECB Minutes

Fed’s Williams speaking

July 7 – US NFPs

July 7 – Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting

Trump meeting Putin while Merkel hosting them

Trump readying for a steel fight and withdraw from international talks on financial regulation

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 GMT)

July 20 – ECB meeting

July 26 – 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

  

Read More