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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Mar 16, 2017 - Market Update

Short recap

Asia took the inspiration from Wall Street on dovish sounded Fed

EU opening higher on significant repricing of equities after Dutch elections and Fed

The Dutch stayed smart and said no to nationalism, thus sending the wave of relief across Europe

Fed still on the safe side

Hiked 25 bps, still sees 3 hikes this year as economy is doing well

On track to reach 2% inflation target, outlook for hikes/pace unchanged

Overall positive FOMC (in line) but what surprised many was no upgrade to the outlook/pace of hikes (dots) for 2017/18 despite the stronger data in Jan/Feb

That may prove that Fed is open to create asset bubbles and accept higher inflation over dumping the growth

Next hikes likely in June and Sept, Dec may bring balance sheet reduction talk

S&P 500 eying 2400

DAX to retest the April 2015 highs at 12 400

And may find additional support from another rise in car sales in EU (proving that economy is doing well)

Inditex (owner of Zara) doing better than H&M on the back of growing online business and better presence in emerging markets

Audi under emission scandal scrutiny

EDF working hard to put back to use 4 nuclear reactors after technical issues

FX – we need to respect the magnitude of the moves

EURUSD – back to the range 1.0500-1.0800/50

FOMC and Dutch election risks are off

Now we have Trump to watch as the importance of Fed is much lower as per their data dependency

But only until another round of speculations about June 14 hike re-emerge again

USDJPY – to follow yields, back to the range now

May get lower on yields even to touch the 111.50 level

Kuroda sees 1% inflation in 2018

FX options

Vols lower across the board

1m EURUSD down to 6.7% (lowest since Sep 2016)

1m USDJPY down to 7.9% (lowest since Dec 2015)

On the other hand overnight vols up on central bank meetings:

EURNOK, EURCHF, EURGBP, USDTRY - all up

Gold – fully depending on USD and yields

1221 important for further move up

But geopolitical risk of nationalism in EU receded

  

10-yr Trys yields at 2.52%

Experienced covering of shorts in Trys yesterday (strongest move since June 2016)

Questions – how durable this move is?

FR-GE yields spread below 60 bps on lower Le Pen fear

Data

BoJ meeting

SNB meeting (to be watched as EURCHF is not behaving in a normal way)

BoE meeting – no change expected

Trump to present budget (1100 GMT)

US: Housing Starts – expected slightly higher

US: Job Openings & Labor Turnover Survey – expected a small dip

Mar 17 – Merkel meeting Trump

Mar 17-18 – G20 FinMin 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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