June 16, 2017 - Market Update

Short recap

Asia flat

Europe opening higher

BoJ no change, upgrading consumption, domestic and global growth

To keep support as inflation is far from 2%

Greece getting EUR 8.5 bln loan

What about central banks raising the inflation targets to 3-4% range instead of 2% one?

Would it create the psychological pressure on households and corporates to spend/invest more?

Fed ok with hikes despite lower inflation pressures and job market is still strengthening

As financial markets conditions constantly improving since Mar 2016

Equities

US retailers suffer with almost 300 bankruptcies this year

US techs fall out stopped again around 5650 area for NASDAQ

Seems like correction without any panic is welcome

Nike to cut jobs and streamline offering

Apple suffering the most from techs selloff

Facebook fighting terrorism via removing content

Uber looking at trucks

BHP with new Chairman

Nestle likely to sell US business of Butterfinger and BabyRuth

BP and Reliance Industries to take on gas production in India (USD 6 bln)

Bonds

10-yr Trys yield at 2.17%

10-yr Bund yield at 0.28%

EURUSD

Support at 1.1120 (38.2% Fibo)

Resistance at 1.1187 (23.6% Fibo)

USDJPY

Digesting FOMC

While BoJ seems off the interest of markets

Resistance at 111.24 (50.0% Fibo), then 111.37 and 112.00 Ichimoku

100 DMA at 111.88

Support at 110.50 (61.8% Fibo) and 110.58 (200 DMA)

Descending trendline around 111.00

Closing today above 110.80 level would be a bullish outside week signal

With potential to look at 114.36 after breaking 111.24 level

DXY

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Gold

Under pressure post-FOMC

Expecting a wait-and-see game, as there is still decent physical demand due to geopolitical risks

While investors need to assess upcoming US data to get more comfortable with Fed’s hawkish tilt

Support at 100 DMA at 1247, 1245 (61.8% Fibo), 200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Upcoming Data/Events

Fed’s Kaplan (1645 GMT)

Sunday – French Legislative (Parliamentary) elections

Monday – Brexit talks starting ?

Thursday – EU Summit

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 18, 2017 - Market Update

Short recap

Trump – Special Counsel headed by former FBI director Robert Mueller to investigate Trump-Russia connections

Risk off overall, messy market reaction in Asia but creation of the Counsel may temper down the nerves

USD - no clear direction for the market today yet

USDJPY – no clear safe heaven buying reaction overnight

Market still to face uncertainty until more clarity on the scope/areas of investigation and schedule is known

The investigation can take months/years

Republicans likely to prepare their own healthcare, tax and infrastructure bills, not waiting on Trump to clean up the mess

It will also serve as a way to differentiate from him

As mentioned yesterday, Trump is a small piece of US long term economic growth

Investors may be distracted and overlooking that US economy is strong enough to cope with Trump mess (productivity and capital wise)

Impeachment still way way far from here and need 2/3 of Senate vote

Possible impeachment – only three presidents faced it, namely Andrew Johnson (1868), Richard Nixon (resigned after Watergate scandal in 1974) and Bill Clinton

Fed June rate hike at 65%

EU rethinking the capital market union due to Brexit

And get the large chunk of trading in euro-denominated instruments currently traded in London

Equities

Elliot Management met with BHP Billiton yesterday

DOJ to file a lawsuit against Fiat Chrysler if no agreement over emissions

VIX jumped 45% yesterday

Investors taking profits and positioning with more caution also due to weaker US data

To watch materials, techs and financials, as they may suffer

Bonds

2-yr Trys yield at 1.26%

10-yr Trys yield at 2.24%

10-yr Bund yield at 0.37%

EURUSD

Lots of ECB speakers today, likely to send a united message after sharp EUR jump

Market staying nervous

Selling interest may be seen within 1.1180/1.1200 area

No real resistance until 1.1300 (high), eventually at 1.1250

Support at 1.1073 (76.4% Fibo) and 1.1028 (high)

USDJPY 

Cross staying heavy towards 111.50, likely stops above

Interest seems to be at 110.50 (61.8% Fibo) with stops below

US politics and yields in charge

Gold - approaching possible supply zone based on daily chart, watching

…looking to buy USD? USDCHF might be the candidate

Upcoming

ECB’s Weidmann (0700 GMT), Mersch (0750 & 1230 GMT), Lautenschlaeger (1245 GMT), Nowotny (1250 GMT), Draghi (1700 GMT) speaking

Fed’s Mester (1715 GMT) speaking

Fri

ECB’s Constancio speaking

Fed’s Bullard speaking

Iran elections - impact on security and oil production

May 24 – former FBI director James Comey to testify before Senate (1330 GMT)

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 at 65%

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 12, 2017 - Market Update

Short recap

Asia on a safe side on geopolitical risks, JPY, gold and VIX up

Europe opening higher

Kuroda – BoJ easing for price stability and not to target FX levels

Will keep going with easing to reach 2% inflation

BoJ reduced 3-5 yr bond purchases

Xi sent a message to Trump to solve the situation in North Korea in a peaceful way

Japan joining US in North Korea muscle flexing on the sea

US Sec Tillerson in Russia today

Merkel against EZ mutual debt to distinguish herself in election year from Schulz

Greece and Portugal would need to address debt sustainability anyway

China PPI at 7.6% but serious real estate problem

Economy way overleveraged (80% of GDP)

Will be negatively impacted by deleveraging that would need to take place at certain point in time anyway

VIX was up to 15.88% despite S&P 500 just slightly lower

BHP Billiton rejected any attempts to change the corporate strategy from Elliott Management side

Siemens to partner with Bombardier in train production to better position themselves against Chinese CRRC Corp

United shares hit by passenger issue due to overbooking

It seems like a very common practise by airliners to overbook and then offer you an incentive or compensation for not flying or flying another day

Dialog Semiconductor may lose deal with Apple

10-yr Trys yield at 2.30% (dropped to 2.28%) - should be temporary on geopolitical risks (Trump acting as a policeman)

While June rate hike is priced at around 60%

If the rate drops further below the 2.30% level it would express the level of doubt of bond market about Fed raising rates sooner than later

10-yr Bund yield at 0.20%

GE-FR spread rising to 74.50 bps again on the back of leftist Menchelon gaining momentum

His surprise win may be a risk event reflected in USDJPY decline

FX options

EURUSD 1m RR dropped sharply, trading below Brexit vote levels

Traders favoring put options (getting more expensive than calls)

Market was buying strikes around French elections heavily yesterday

In a protection move

1w vols dropping sharply yesterday

EURUSD spot flat

EURUSD 1m vols spiking to 12.47 from below 9.00 level

12.50 vols is equal to a spot move of 76 pips a day

EURUSD 1m 25 RR heavily favoring puts

But…

EURUSD 1w vols trading at historically low levels and keep moving lower

What may be due to implied vols underperforming

And market using 1w strikes to finance strikes covering French elections (Apr 23/May 7)

USDJPY – with ease through 110.00

Sitting at descending trendline

But close to 200 DMA at 108.70

Are the bears strong enough to take it below 200 DMA?

Similar picture as for EURUSD

1m vols spiking to 12.48 from above 11.00

1m 25 RR dropping sharply following spot and favoring puts

Liquidity to disappear quickly as we get closer to Easter holidays

Shouldn’t experience any change unless we really have a huge event this week

Than we can see sharp moves either way

6m vols trading very cheap compared to risk events as French & German elections, North Korea, Syria are

Data

UK: Labour Market Report to stay resilient

Kaplan (Fed) speaking at 1400 GMT

Apr 23 – French presidential elections

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines – until then we won’t have clearer EU position on Brexit

May 7 – French presidential elections 2^nd round

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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