June 28, 2017 - Market Update (Draghi's reflation & Yellen's “no new financial crisis in our lifetime” words, Cyber attacks - a new era to come? Bonds, equities down - a new risk off combination? JPY a perfect summer carry trade)

Short recap

Asia down inspired by US session after another delay of healthcare bill vote

Europe opening lower

World coping with another cyber attack – a new era to come?

Draghi replaced deflationary forces by reflationary ones and pushed EUR higher

Sounds like woo-doo to me when we talk about “forces”…

But overall his speech was in line with dovish policy. More link  

Yellen was out with “no new financial crisis in our lifetime” comment, meaning as long as she is alive. More link

Healthcare reform vote delayed as Republicans score a goal to their own net

Bonds and equities on defensive overall yesterday what makes an interesting risk off combination

Carry trades to suffer, thus EM and high yield DM not to do well if current setup continues

Equities

Techs, biotechs and EM bleeding

Nestle to buy back CHF 20 bln worth of shares over 3 years

Option traders looking at AstraZeneca from a short side as the market positions itself for lung cancer trial results

Alphabet hit by EUR 2.4 bln fine from EU for abusive behaviour in search engine

Not effecting long term business as the fine is just 3% of cash/1.5 month of cash flow

Facebook at 2 bln user mark, doubling since 2012

Syngenta (owned by Chinese) interested in Bayer assets that need to be sold

As a part of Monsanto takeover deal

Bonds

10-yr Trys yield at 2.22% vs 2.14% yesterday

10-yr Bund yield at 0.39% vs 0.25% yesterday

DXY

Support 95.90, then 94.70 (61.8% Fibo)

Resistance 96.44 (50.0% Fibo)

EURUSD

Market was caught by surprise with Draghi’s reflationary forces comment

What was also confirmed by price action

If we see the 1.1295/1300 holding, we are likely marching through 1.1400

But the historical supply range comes towards 1.1500 (check the weekly chart)

Central bankers to drive the show today too

Support at 1.1366, 1.1300

Resistance at 1.1400, 1.1415/30, 1.1464, 1.1500

Weekly chart (Source: Saxo Bank)

Daily chart (Source: Saxo Bank)

USDJPY

Dip buying as a strategy? As some may see carry trade going to summer pushing JPY lower

Exporters holding sell orders at 112.50

Bids towards 112.00, more below

Support 111.80 (100 DMA) and then 111.50 with USD 2.5 bln option expiring

Resistance 112.24 (61.8% Fibo), 113.05 (76.4% Fibo)

Data/Events

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal:

ECB’s Mersch (0900 GMT), Lautenschlager (1045 GMT), Constancio (1130 GMT), Draghi (1330 GMT),

BoE’s Carney (1330 GMT)

BoJ’s Kuroda (1330 GMT)

BoC’s Poloz (1330 GMT)

Thu

Fed’s Bullard (1700 GMT)

US Trade deficit report to be released – what accusations can we expect?

July 7/8 – G20 meeting – will Trump meet with Putin?

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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May 15, 2017 - Market Update

Short recap

Asia up despite cyber attack and North Korea

Europe opening higher despite more cyber attack threats

Chinese Belt and Silk Road initiative uniting Asia, Africa and EU versus Trump’s America first

ECB’s Weidmann – Macron’s win and strengthening recovery sets ECB to unwind the ultra-loose policy

But inflation needs to be more sustainable

Fed’s Evans – to start balance sheet reduction at the end of 2017 and can take 3-4 years

Low volatility – need to wait for business cycle reversal to see the volatility spiking as political or security risks are not good enough reasons

Equities

HFs, MMs and top investors to reveal their Q1 regulatory fillings of their purchases/sales of stocks

Would be very interesting reading with respect to Trump trade

Dassault Aviation looking at new contract next year

Lidl to make a footprint in US this summer

GE supporting NAFTA, to continue growth in Mexico

And double its purchases from there

Spotify to launch listing on NYSE (USD 13 bln)

AstraZeneca up on lung cancer drug trial results

Lilly confident with migraine treatment results

Home Capital planning asset sales to repay CAD 2 bln loan

CIBC got green light to buy PrivateBancorp

No more upfront bonuses from BoAML to lure the talent (end of industry practice)

Bonds

10-yr Trys yield at 2.33%

10-yr Bund yield at 0.39%

June hike probability down to around 78% from above 90%

DXY

USD stayed quite resilient despite weaker US data, yields and political mess in US

Needs better Q2 data and Washington to deliver

Otherwise the 1.1022 (FR election high will be in focus)

Resistance 99.26 (Fibo 61.8%), 99.18 (200 DMA), 99.08 (10 DMA)

EURUSD

EUR net specs turned long 1^st time since May 2014

EZ data and Merkel’s advance supportive

Had bit of consolidation above 200 DMA at 1.0824

Selling area may be around 1.0950/75 ahead of rising trendline at 1.0982

Interest to buy likely towards 1.0830/40

61.8% Fibo at 1.0933 acting as resistance

10 DMA at 1.0918

USDJPY

Resistance 113.76 (76.4% Fibo)

Offers likely around 113.50 and towards 114.00

Support at 113.20 (10 DMA), 112.97 (100 DMA) and 112.68 (61.8% Fibo)

Gold

Was on the way toward 1200 but North Korea, weaker US data and unpredictability of Trump stopped the move

COT report – no selling/increase of shorts just longs liquidation

Resistance at 1245 (200 DMA), 1255 (61.8% Fibo)

Support at 1230 (50% Fibo & 10 DMA)), 1228 (100 DMA) and 1204 (38.2% Fibo)

Oil

Russia, Saudis supporting 9-month cut deal extension

Oil run on short-covering only

Floating storage down by 1/3

Chinese eying oil and gas from US

Chinese steel production at record high (to benefit from rising prices) while demand flat

Despite gov attempts to curb production

Upcoming

Speakers:

Nouy (ECB), Dombret (Buba) 1050 GMT

Praet (ECB) 1145 GMT

Angeloni (ECB) 1645 GMT

Tue

ECB’s Nowotny, Coeure speaking

Thu

ECB’s Mersh speaking

Fed’s Mester speaking

Fri

ECB’s Constancio speaking

Fe’s Bullard speaking

May 25 – OPEC/Non-OPEC meeting

June 8 – ECB meeting

June 8 – UK elections

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

June 13/14 – FOMC meeting – market pricing rate hike above 78%

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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Apr 20, 2017 - Market Update

Short recap

Asia started in red but turned to green as oil recovered a bit

Europe opening higher

ECB officials see stimulus measures as appropriate in the light of low inflation pressures

Beige book – economy modest to moderate growth, inflation in check, lack of sufficient low-skilled workers and issues with workers fluctuation

Akzo Nobel struggling with pushy take over bid from PPG

Rio Tinto stays positive despite drop in iron production and lower prices

Bombardier upheld by court, Ontario can not cancelled the train order

AstraZeneca looking to deliver in immune/oncology field

Keystone XL pipeline not an easy deal for TransCanada despite Trump support

As farmers in Nebraska may bring more clouds

BlackRock benefiting from higher volumes in ETFs

While short of revenue estimate

FTSE 100 testing lows despite Europe higher

Earnings season

US corporates doing well

Morgan Stanley with higher bond trading than Goldman Sachs

Proving that Goldman is loosing the market share

Today:

Visa – should benefit from higher volume but FX conversions may hurt

Philip Morris – should benefit from better sales of cigarettes and their alternatives

Verizon – results to be effected by strong competition in wireless and Yahoo acquisition

Bonds

Investors still sitting in bonds ahead of FR elections

And keeping the yields low

GE-FR spread hit the high of 79 bps

10-yr Trys yield at 2.20%

10-yr Bund yield at 0.19%

FX

DXY – close to key levels

Support at 99.26 (61.8% Fibo), 99.00 rising trendline and 200 DMA (98.97)

USDJPY – close to support at 108.50

Below 200 DMA at 108.86

And descending trendline

EURUSD – support at 1.0706 (38.2% Fibo)

Resistance: 1.0750, 1.0760/70 (descending triangle trendline), 1.0830 (Feb high), 1.0840 (200 DMA + descending trendline)

FR elections to set the direction as triangle is closing

GBPUSD – Is it heading to 1.3000/35 ?

French election the crucial test

If market positive outcome (Macron to second round, Le Pen disappointing)

Sterling may benefit

Commodities

Oil dropped yesterday on build up in gasoline inventories and smaller drop in US stockpiles

Refinery demand strong = lower inventories of oil

But refineries producing lots of gasoline = stocks rising as gasoline demand is low

Drop was also supported by removing of risk premiums as some geopolitical risks faded off

Oil market not to go higher for now

Short side speculators driving the market overall

Resistance USD 51.50 (50.0% Fibo)

Support USD 49.60 (61.8% Fibo)

Data

US: Initial Jobless Claims – to stay close to lows

US: Philadelphia Fed Manufacturing – likely to ease further

Powell (Fed) speaking at 1200 GMT

Carney (BoE) speaking at 1530 GMT

Upcoming:

Apr 23 – French presidential elections

40% still undecided

Official results at 1800 GMT

Exit polls from midday but on BE and CH media only

More precise estimates around 1600 GMT

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines

May 7 – French presidential elections 2^nd round

May 25 – OPEC/Non-OPEC 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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