Short recap
Asia up
Europe opening lower
BoJ – no change, outlook for econ up, CPI down
NAFTA to stay for now, I “admire” the respect of
Trump for his partners
Trump’s tax reform out, if in place making a huge
hole to federal budget
And making Fed to move faster
So far no inspiration for the market as it lacks the
details and is very complex thing
No US Gov shutdown until Sep 30
New healthcare bill getting support
PBOC keeps reducing risk in financial system what
is reflected in Shanghai Composite
Equities
US stocks didn’t hold gains after Tax reform announcement
on fading momentum
With Home Capital Group in a need of USD 2 bln
credit line
Something is going on in Canadian real estate
Airbus having a legal case
In love with Ducati? Likely on sale, just contact Volkswagen…
Earnings season
Twitter, Fiat-Chrysler surprised, strong
results from BASF and Deutsche Bank
Alphabet – expecting higher revenue, would be
interesting to see any comments on diversifying its advertising revenue over
other areas (cloud…etc.)
Microsoft – expecting better results as company
benefits from its cloud services
Amazon – expecting better results as it benefits
from its market position but some risk of using cash are present
Intel – Mobileye acquisition to pay off but
company is still having to fix the core
Others to report: Celgene, Ford, Dow Chemical, UPS,
Bristol-Myers Squibb, Johnson Controls, AbbVie, Marathon Petroleum, GoPro…etc.
Bonds
US yields experiencing more positioning then reflecting
the reality of strong data and Fed likely hiking again in June
10-yr Trys yield at 2.31%
10-yr Bund yield at 0.36%
EURUSD (daily)
Negative tone under 1.0970
Looking whether closing the week below Sunday open at
1.0889
Support at 1.0850 and 1.0835 (200 DMA)
FX options
EURUSD 1m ATM vols
Saw a massive sell off in vols after 1st
round of FR elections
RR favoring calls (from O/N to expiries covering 2nd
round of FR elections)
ECB today – O/N vols trading at 17% setting the expected
spot moving range at 0.9%
Commodities
Gold – now supported by geopolitical risks
(fading) only
Upcoming
Bundestag voting on Brexit
ECB meeting
Expecting quiet meeting, no surprise (FR elections
in two weeks)
Draghi to defend the QE continuation with maybe a slower pace of bond buying in 2018 and the rate rise well into the future
Will need to talk down any
taper speculation
at an earlier stage despite EZ macro data
Would correspond to three year
cycle as Fed had
To please the hawks likely a small wording adjustment at
Jun 8 meeting
Inflation to stay low (oil prices), core still
weak at 0.7% (likely to be still disappointing in 2017/18)
Draghi/officials will be very prudent after last
experience with a bit more hawkish tone
Having a huge market impact, had to talk it down after
Apr 29 – EU Summit to sign off the Brexit negotiations
guidelines
May 7 – French presidential elections 2nd
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.
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