May 30, 2017 - Market Update

Short recap

Asian stocks with cautious on Greece and Italy

China, Hong Kong closed on account of public holiday

Europe opening lower

Greece readying for not paying EUR 7 bln installment if bail out agreement/haircut not reached

Some banks in Italy and Portugal still facing issues

Macron met with Putin in Paris

Draghi is please by improving economy but stimulus/extra low rates to stay

Weidmann said that ultra-loose policy still appropriate

Equities

Akzo Nobel’s rejection of the offer from PPG Industries (EUR 25 bln) blessed by court

Clouds mounting over Canadian banks (Home Capital & real estate) as well as Australian banks (Chinese capital controls not boding well for Aussie real estate)

US equities printing new highs and volatility down putting global equities to positive light

Bonds

10-yr Trys yield at 2.24%%

10-yr Bund yield at 0.30%

EURUSD

Under pressure from Greece, potential snap elections in Italy, mess around UK and dovish Draghi

IT to introduce a new election threshold for parties (5%+)

What in turn will reduce number of parties elected to 4 from current 10+

Greek debt not to be included to QE program from ECB anytime soon

Nor Greece financing themselves in the markets

1.1140/55 range acting as resistance

If we close below the 1.1000 in sight

If we break than the 1.0840 will likely be the next

1.1000 – growing importance 

1.1128 (61.8% Fibo Nov/Jan)

1.0978 (50.0% Fibo Nov/Jan)

Large option EUR 2.7 bln with strike 1.1100 expiring today

USDJPY

Offers around 111.50

Stops likely below 110.85 level, bids can show up on a break

Large options (USD 2 bln) with strikes below 111.00 expiring today

200 DMA at 110.15 – a pretty strong support…

Data

GE: Flash CPI m/m expected at -0.1% and y/y expected at 1.6% vs 2.0% prior

US: PCE m/m expected at +0.1% vs -0.1% previous; y/y was 1.6% previously

ECB’s Liikanen (1015 GMT)

ECB’s Nowotny (1600 GMT)

Fed’s Brainard (1700 GMT)

Wed

EZ: Flash CPI – should move back to 0.8% level from 1.2% prior

Former FBI director James Comey to testify before Senate

Beige Book

ECB’s Coeure, Lautenschlaeger

Fed’s Kaplan, Williams

Thu

ECB’s Villeroy

Fed’s Powell

Fri

US NFPs 185k exp vs 211k prior

Unempl. rate 4.4% exp vs 4.4% prior

Average earnings +0.2% exp vs +0.3% prior

Fed’s Harker

EU-China Business summit (Juncker/Li)

June 8 – ECB meeting

June 8 – UK elections including Scotland, if SNP/Sturgeon wins the independence referendum likely to follow

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

June 13/14 – FOMC meeting

June 15/16 – EcoFin meeting to discuss Greece

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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May 9, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher but correcting

Kuroda sees 2% inflation in 2018

To keep the short term rate target at -0.1%

And 10-yr Japan bond yield at 0%

UK’s employers having hard times to recruit foreign workers

Fed’s Bullard having concern over weaker growth and inflation data in Q1

Alex Weber from UBS (former Bundesbank head):

Brexit negative for Europe, more volatility to come

ECB likely to remove some easing wording in June

And announce taper in Sep

Equities

Akzo Nobel rejected the PPG Industries take over bid again

UK’s energy supplier Centrica not very happy with warm weather and low commodity prices

As they bite into the margins

Home Capital suspended dividend, burnt 1.6 bln out of 2.0 bln of line of credit as deposit flee away

Industry veterans added to the Board

Suncor looking at new oil sands project in Alberta (Canada)

ISS pushing shareholders of PrivateBancorp to reject takeover offer from CIBC

Earnings

Commerzbank reported higher operating income, proof that raising rates benefit banks

Walt Disney expecting better results

Valeant investors more focussed on asset sales than earnings

Others reporting: Allergan, Duke Energy, Nvidia, Electronic Arts, SunPower,

VIX touching the 9.77 level, lowest level since 1993

Market sees very little risk in the near future

Will not last long, what is going to be the trigger?

Bonds

10-yr Trys yield at 2.39% with real yields at 2 month high of 0.51%

10-yr Bund yield at 0.42% - ECB’s June language adjustment and beginning of taper in Sep getting priced in

Yield likely to move to 0.50% attacking the recent highs

FR-GE spread stuck at 42 bps (after Macron victory), stabilized here

What is still above 20-30 bps historic levels but market is waiting for June Parliamentary elections

EURCHF, USDCHF – weaker CHF on higher yields

And money flows leaving safe heavens

To watch SNB sight deposits stats – to stabilize or fall?

USDJPY – on the way to 115.00 after clearing Ichimoku

Next resistance 113.76 (76.4% Fibo)

Risk on, US yields and tax reform progress crucial

Commodities

Oil very indecisive as OPEC/non-OPEC cut may extend to 2018

But slowing demand and rapidly rising production in US temper the cut impact

Gold playing within 1200/50 range

USD and US yields not helping

Options market back to neutral

Specs long cut, real money no change

Data

US: Small Business Optimism Index to slow a bit

US: JOLTS to slow a bit

Fed's Kashkari (1300 GMT), George (1540 GMT), Rosengren (1700 GMT) and Kaplan (2015 GMT) speaking

G7 finance ministers meeting in Italy this week

Discussing: trade, financial institutions, fighting inequality and tax crime

Upcoming

Wed – ECB’s Draghi and Fed’s Rosengren, Kashkari speaking

Thu – Fed's Dudley speaking

Fri – US CPI and Fed's Evans speaking

May 25 – OPEC/Non-OPEC meeting

June 8 – UK elections

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

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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May 3, 2017 - Market Update

Short recap

Asia mostly in green with some hesitation about Fed looking at June hike

Europe opening lower

Trump a bit “disruptive” in international field

Open to government shutdown, pushing for faster voting on bills

US pushing China to agree on additional North Korea sanctions

Brexit – GE-FR agreed on tougher stance towards UK’s post-Brexit obligations (EUR 100 bln) Full article

UK announced that they will not pay this amount, want to discuss in details what are the rights and obligations

I love this one too…what discussions, all is written on the paper and signed by them

Equities

Akzo Nobel meeting today to discuss offer PPG Industries (USD 29 bln)

Peugeot to test self-driving cars in Singapore in a partnership with nuTonomy

US auto sales losing the steam, the cycle likely comes to an end

Valeant should be able to repay USD 5 bln by Feb 2018

Apollo, Blackstone, Centerbridge interested in Brookfield Asset Management (CA)

Fairfax Financial looking to buy Home Capital

Active fund managers are underweighted Apple versus indices despite high level of share price

VIX at 10.59 level – time to buy put options?

Earnings season

Apple’s iPhone sales/revenue down (customers waiting for a new device), feeling the replacement cycle

Facebook – expecting higher revenue on mobile-ads, market to focus on hiring and planned investments

AIG – markets is awaiting a CEO succession plan

Tesla – investors are very curious about the company results as the company deliveries in Q1 jumped by 69% to record 25k

Home Capital Group (CA) – closely watched as there are few bids in the wake of financial difficulties following mortgage fraud accusation in the bubbling Canadian housing market

Others reporting: Prudential Financial, MetLife, Yum Brands, Kraft Heinz Foods, Time Warners

Bonds

ECB bought much more FR (EUR 11.3 bln and IT (EUR 9.8 bln) bonds last month, while GE bonds purchases were in line

Amount that is in breach of the usual allocation key

ECB did so ahead of FR elections and due to issues IT is coping with

10-yr Trys yield at 2.29% - trading a bit stronger ahead of FOMC

10-yr Bund yield at 0.32%

10-yr Greek yield declined substantially to 6.16%

Gold – waiting for a catalyst: FOMC, US NFPs

Support 1249 (50% Fibo) and 1250 (50/200 DMA)

Data

EZ: Q1 GDP flash estimate – no change to 0.5%

US: ADP Employment report – expecting lower growth in April

US: ISM Non-Manufacturing – expected slightly higher

Obamacare vote expected today/tomorrow

FOMC statement to be released (no press conference)

Likely to discuss balance sheet (USD 4.5 tln, pace of rate hikes, no policy change expected)

Just to refresh:

March PCE came at 1.6% as expected

Market pricing June hike at 70%

Upcoming

Friday – US NFPs

Focus on earnings while headline may not be stellar due to Easter holiday

May 7 – French presidential elections 2^nd round (Macron/Le Pen – 60/40)

May 25 – OPEC/Non-OPEC meeting

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

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 24, 2017 - Market Update

Short recap

EU markets opening flat to higher

US stocks no clear direction but highest valuation in 15 years

Institutional investors overweighed in stocks despite seeing high valuations

Risk of crowded trade from short side on the horizon if Fed keeps hiking and Trump doesn’t deliver

EU stock and bond markets look completely mispriced

To watch EZ economic data, FR elections and rise of inflation (lower oil can mute it)

UK’s Brexit bill to be around GBP 50 bln according to Juncker

US to review 14 free trade agreements to benefit US companies

US House voting on Obamacare repeal – Republican debate to continue today

As mentioned yesterday, politicians have a show time but will get it done

Expecting vote between 1800-2000 GMT, to be a test of discipline for Republican party going to debates on tax and reform bills

Meanwhile, Trump was out saying he will let Obamacare in place if the vote is not successful

And move over to tax reform, what was a strong message to Republicans

Truly speaking, this vote is not a such weight lifter for the economy as tax, fiscal or infrastructural reforms are

Kuroda – QE in place as inflation far from 2%

Praet (ECB chief economist) – QE exit premature

No inflation/deflation risks in EZ

Job market still lagging

IT having structural problems, Lira is not a solution

PPG closer to Akzo Nobel takevover (EUR 23 bln) as the largest shareholder is in favor

LVMH doing well in China

RBS to close branches and shed jobs

Deutsche Bank to move its London’s HQ to new place

Oil higher on lower Saudis export to US

USD 50 should act as a short term support

10-yr Trys yield at 2.43%

10-yr Bunds yield at 0.43%

DXY found support above 99.26 (61.8% Fibo) and above triple bottom area

Fed balance sheet cuts talking making the rounds but real cuts will steepen the yield curve what in turn will support the USD

June hike is 50/50

EURUSD waiting for Obamacare vote

May be posed for higher move short term

But US-GE yield spread tells the other story medium term

USDJPY towards 111.60 resistance

Gold daily - strong resistance at 200 DMA and descending trendline

Data

EZ: PMI to decline slightly

US: Durable Goods Orders to increase but stay flat on y/y

Fed speakers:

Evans (1200 GMT)

Bullard (1305 GMT)

Dudley (1400 GMT)

Williams

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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