Wednesday 2 August 2017

Aug 2, 2017 - Market Update (DXY close to strong support area 92.64, 200 WMA & 91.88, BoJ keeping powerful QE, Iron ore down 1.8%, Plenty of USD liquidity supporting risk assets, Drop in US car sales to hurt, One Apple a day..., Tesla on stage today, Banks not happy with low volatility, Venezuela bonds struggling)

Short recap

Asia in green as techs were inspired by Apple’s earnings
Europe opening higher1
BoJ on a halfway to 2% inflation, must keep powerful QE in place
Structural reforms needed to boost inflation
Trump to address some China trade practices
Iron ore down 1.8% after three day rally (seems not sustainable) and reaching USD 70 per tonne
As it was on the back of Chinese steel producers just pre stocking
Drop to USD 50 may follow
Sep debt ceiling debate/vote coming
Plenty of USD liquidity supporting risk assets


Equities

Drop in car sales a risk for US economy
Lots of leased cars coming back to market, so automakers will face tough times
But stellar earnings from EU and US keep supporting stocks
Banks not happy with low volatility as it takes the bond trading profits down
Silicon Valley startups facing more pragmatic approach from investors, thus less money
Societe Generale putting EUR 300 mln aside
BP in talks with green car producers to offer a battery charging at its gas stations worldwide

Earnings

Apple surpassed expectations yesterday, hitting all time high in after market
Still struggling in China but moving focus from cars over to autonomous software and all around

Today reporting: MetLife, AIG, Time Warner, Symantec, Molson Coors, Tesla among others

Tesla – market is expecting a rise in revenue but not turning to profit will take time. Model 3 to be a drag for the time being.

Bonds

10-yr Trys yield at 2.27% vs 2.30% yesterday – down on US politics and North Korea
10-yr Bund yield at 0.48% vs 0.54% yesterday
Both Trys and Bund yields felt overnight
Situation in Venezuela getting worse
Sharply falling bonds just reflect the risk of potential sanctions to oil industry

DXY

Strong support at 92.64 and 91.88, weekly close crucial for further direction
Levels correspond with 1.2000 level in EURUSD
Combined with 200 WMA at 92.37 helped to support USD over the last 2 years
Likely to have attempts to break these levels


Source: Saxo Bank

EURUSD

Sentiment is on cautious side at these levels, market reassessing how USD is actually weak
Not likely to move to 1.2000 without any new USD negative news
What’s coming first? Trump or NFPs?
Support 1.1721 (10 DMA), 1.1785 (200 WMA) – to watch weekly close above 200 WMA
Closing below 10 DMA would make bullish momentum weaker
Resistance 1.1200 more psychological of nature

USDJPY

Small hurdle at 110.50
Resistance 110.97 (61.8% Fibo)
Support 110.14 (76.4% Fibo)
Bids sitting at 110.00, stops likely below 109.90

Data/events

ECB Governing Council meeting
Fed’s Mester (1600 GMT)
Fed’s Williams (1930 GMT)

Fri
US NFPs – 173k exp

Aug 24-26 Jackson 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 

0 comments:

Post a Comment