Oct 2, 2017 - Market Update (Catalan 90% vote, Johnson-May old friends, DAX attacking 12 954 on weaker EUR, 10-yr Trys yield bullish close, Global equity funds enjoying the money in rally)

Short recap

Asian up

Europe opening higher

Catalonian 90% vote for independence

Madrid and police not comfortable with it

Declaration of independence likely to come in 48 hours

Boris Johnson sees Theresa May gone within the year (friends…)

Boeing-Bombardier dispute a proof of UK-US Trump kind of preferential partnership

Warsh the new Fed’s head after meeting with Trump

Used to be a Fed gov (2006/11) but resigned over disagreement over bond buying

Other candidates might be: Yellen, Cohn, Powell, Hubbard

ECB close to tapering? What about the business and consumer confidence hitting multiyear highs…

Equities

Volkswagen making up the diesel scandal bill up to USD 30 bln

Global Logistic Properties buying Gazeley (USD 2.8 bln) to enter EU as a lucrative market

Germany eying to buy warplanes from Boeing

Bombardier goes short against Boeing but seals USD 1.7 bln deal with SpiceJet from India to sell 50 planes

Global equity funds still growing in size as investor poor money in

Cryptocurrency exchanges still facing the security and fraud issues

DAX to benefit from weaker EUR, next stop 12 954 or higher?

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.58% vs 2.58% on Friday – had a bullish close on Friday posting outside month/monthly reversal

10-yr Bund yield at 1.67% vs 1.07% on Friday

Spanish bonds - Catalan vote impact – we need to see market reaction first

As we balance between the independence and strong economy

COT report as of Tue last week

USD: Leveraged funds net sellers

Shorts at the highest level since May 2014

EUR: Largest net buying

Longs at 88k vs 62k previously

GBP: First net longs since Oct 2015

Longs 5k vs shorts 10k previously

EURUSD

Gapped lower but Catalan vote to have a short-lived impact

Unless we see a deep constitutional crisis in Spain

Support at 1.1762 (Ichimoku) 1.1720 (38.2% Fibo), 1.1708 (200 WMA)

Resistance at 1.1862 (23.6% Fibo), 1.1844 (50 DMA)

USDJPY

Worth of watching as DXY is getting some bullish signs

And Trump is moving with tax reform

Cross posted also a bullish monthly reversal on Friday

And trades above the descending trend line)

What may open the door towards 114.36-50 range (recent highs)

Or even 118.60/65 if we seen the Trump trade back

Resistance at 113.25

Support at 111.85 (23.6% Fibo), 112.28 (10 DMA)

Gold

Catalan vote had no major impact

Other geopolitical risks: NoKo, Kurdistan-Turkey, Iraq, Iran

Resistance at 1281 (50.0% Fibo)

Support at 1272 (100 DMA), 1263 (61.8% Fibo)

Data/events

ECB’s Linde (0930 GMT)

ECB’s Praet (1015 & 1300 GMT)

Fed’s Kaplan (1800 GMT)

Oct 1-4 – UK’s Tory party meeting

Oct 1-7 – Golden week holiday in China/Korea

Tue

Fed’s Powell

Thu

ECB Minutes

Fed’s Dudley

Fed’s Powell

Fed’s Williams

Fed’s Harker

Fri

US NFPs – 98k exp vs 156k prev

Unemployment rate at 4.4%

Earnings +0.3% vs +0.1% prev

Fed’s Bullard

Fed’s Kaplan

Oct 18 – China National Congress

Oct 22 – Japanese elections

Oct 26 ECB

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

Good luck Champs!

Mr Hawk

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