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

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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

  

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Mar 22, 2017 - Market Update

Short recap

Europe opening lower

Asia down as markets doubt about the Trump’s ability to bring real pro-growth policies in life. In other words the after Trump victory reflation trade is loosing momentum. Nikkei testing the important psychological level 19 000.

The US markets suffered heavy selloff that was also accelerated by negative comments from US administration about the ban of nuclear weapons.

Abe supported open markets policy in Brussels yesterday

EU-JP working hard on a trade pact

US regulators pushing for a risk reduction via making the securities settlement time shorter (2 instead of 3 days)

Trump putting pressure on lawmakers to vote for Obamacare repeal bill as it is a first major hurdle to implementing his agenda. Bear in mind that there is Senate and two Houses of Congress to get it through.

Brexit – 27 remaining members to meet on Apr 29 (note Art 50 to be triggered on Mar 29)

London based banks not to face lengthy set up process while moving to EZ

Goldman Sachs to start moving staff to EZ soon

UK banks to face investigation in relation to Russia money laundering activities

US banks hardly hit during US session (down 3%) as markets losing faith in Trump pro-growth policies, thus reflation trade

We may get ready for a 5-10% correction

S&P 500 below 2350 support

After closing the investigation of Opel (GM) in emission scandal yesterday, the French authorities continue with Fiat-Chrysler

Apple is out with newer version of iPad, priced at USD 329 (lowest in Apple world)

New opportunities for global investment banks open in Canada as the appetite for M&A from Canadian companies and pension funds is rising

Oil still feeling the oversupply

Russia open to support the OPEC/Non-OPEC deal

Gold – finding ideal support from risk off (lower stocks, USD, yields and mounting political risks in US)

EURUSD – important 1.0800/50 if broken we aim for 1.1000 and higher

But if the rally in EURUSD is based on political risk off how sustainable is it?

At the moment the Le Pen defeat is not a done deal yet, just recall the Hillary Clinton winning the debates but the winner was…

USD – suffering against EUR, JPY and GBP, while stronger against EM currencies (reflation trade fading away)

USDJPY – 111.60 important, driven by yields

10-yr Trys yield at 2.43% (mid band of 2.30%-2.60% range)

10-yr Bunds yield at 0.43% (flat)

ECB is “testing” the market reaction to possible taper announcement at Dec 2017 meeting with a 10 bps rate hike

EURCZK – at the beginning of this week we saw a significant increase in activity on the bid side across all forward maturities. At the same time the flow was also much higher than usual, what may continue as a part of risk off, reflation and EM flows, not to mention, of course, the likelihood of CNB to remove the EURCZK 27.000 floor this year.

Data

US: Existing Home Sales – expecting a small decline

Villeroy (ECB) to speak (0830 GMT)

Lautenschlager (ECB) to speak (1130 GMT)

Thursday: US House voting on Obamacare repeal

Super important event in terms of whether Trump can/is able to deliver

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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Mar 20, 2017 - Market Update

Short recap

Asia mixed after last week

EU markets opening lower

G20 take away:

Free trade short of support

Mnuchin to correct imbalances – but the simple message to US is: “Consume less, Save more”

End of globalization trends? Or end of US on globalization map?

Merkel and Abe showed strong support for free trade on Sunday (after G20)

G20 outcome is negative for stocks

FOMC feelings still present in the market

Positive on EU stocks (if French elections positive) but higher EUR is a risk

US stocks negative view, may be playing with put options going to Q2

Deutsche Bank to issue news shares worth of EUR bln as a part of strategy shift

Swiss Re to focus more on tailor made solutions to generate more profits out of the deals

Tesla raised USD 1.2 bln to fund its activities, especially Model 3 and battery production

The proof that investors are still interested to participate at Tesla story via shares or convertible notes

Sinopec close to buying refinery from Chevron in South Africa (USD 1 bln)

Bombardier still struggling to handle the deal with Toronto Transportation Agency worth of CAD 770 mln

Oil – speculative shorts double while longs were cut (COT report)

May be pointing to new weakening cycle in oil as US shale production keeps rising

Critical levels: WTI USD 51.15 and Brent USD 48

Gold – also experienced net long positioning cut by almost the half (COT report) going to FOMC last week

Risk to upside move higher on weaker USD, geopolitical risks and huge demand from India

Levels: 1238 (61.8% Fibo), then targeting last high at 1263

USD close to key support levels, trading below 100 DMA

DXY 99.26 (61.8% Fibo), H+S, descending support line around 98.90

Few Fed speakers this week with Yellen (Thu) can clarify the FOMC stance
Important event for USD will be Obamacare repeal vote on Thursday
If passed, likely USD supportive - a sign of Trump having support for his further policies

EURUSD not clearly ready to break 1.0800/50 on political risks ahead of French elections

But market keeps pricing out the risk of Le Pen win despite her advances in the polls

Security question back on the table after shooting at the airport in Paris

10-yr Trys yield at 2.49%, failed to break clearly 2.60% level again

Back to 2.30%-2.50/60% range

Bund yields rising at short end while longer end is unchanged

10 bps rise in EZ rates by Jan 2018 is already priced in

Visco (ECB) – rising rates and terminating QE can be closely linked

Data

EZ: Labour Cost Index – expected to go higher

US: Chicago Fed National Activity Index – expected to go higher

France – election debate tonight

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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