June 6, 2017 - Market Update

Short recap

Asia in red on risk off as plenty of things going on this week

Europe opening lower

US election scandal going more public with DoJ accusing contractor about leaking top-secret documents

PIMCO neutral on Italy after offloading Italian bonds

Italy not leaving EZ but probability of things going wrong is high

UK readying for elections on Thursday amid security issues

China suggesting qualified firms to issue Panda bonds (denominated in CNY, issued by non-China issuer but sold in China)

China looking at expanding futures trading to foreigners

Equities

Lufthansa seeing higher traffic from US and Asia

Knock, knock…Siri from Apple coming to you home via HomePod speaker

GM-Greenlight Capital stock battle keeps going

Blackstone likes Scandinavia and wants to buy Finnish real estate Sponda (USD 2 bln)

GTCR and Carlyle working on buying Albany Molecular Research

Apple and Amazon to join Foxconn to buy chip business from Toshiba

In general, Europe and Japan still look attractive (valuation & flow)

Insurers like Swiss Life, followed by banks can benefit from hiking cycle

Bonds

10-yr Trys yield at 2.17%

10-yr Bund yield at 0.28%

DXY

Higher liquidity support the increase in FX reserves

Rising USD liquidity and excess of USD funding well supporting move to yielding assets despite Fed gradual tightening

Support at 96.44 (38.2% Fibo)

EURUSD

US yields not supporting USD

Market keeps respecting 1.1300

But bids weakening towards 1.1284

Support at 1.1180 (23.6% Fibo)

USDJPY

Below 110.00 and 200 DMA (if we close below, the 108.12 is next)

Support 109.50-60 range (76.4% Fibo)

USD 1.3 bln options sitting between 108.90-109.00

In general, Japanese corporates find the range of 108.00-110.00 as a budget rate zone

What may add additional strength to JPY

Upcoming Data/Events

June 8 – ECB meeting – Draghi being alone but inflation data from US and JP suggesting ECB to carry on with ultra-loose stimulus

ECB likely to adjust the risk to economy wording but no change to asset purchases

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

June 8 - Former FBI director James Comey to testify before Senate

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

June 13/14 – FOMC meeting – Jun hike probability at 95%, Sep at 28% and Dec at 40%. After Friday’s NFPs Sep hike may be skipped if data doesn’t come strong.

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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June 5, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher

Saudi Arabia, Egypt and Bahrain cutting diplomatic ties with Qatar over support of Iran (Islamic Brotherhood and Hamas)

Pushing oil more than 1% higher

All of that coming after Trump’s visit and security threats (banning travellers or notebooks on the planes)

Russia sees oil down to USD 40

UK – attacks and risk of no majority government increasing

It may weight on GBP as UK heads towards weaker government mandate

ECB’s Visco – Italy down most in 10 years

High debt because of low growth but still the average Italian household is wealthier the German one

Fed on track for June hike after weaker Friday’s NFPs but further hikes in question

Unless we see a pick up in inflation and Trump coming with positive fiscal news

Trump to come up with Dodd Frank revamp on Tuesday

But the reality is he doesn’t have enough votes in Congress to push it through

Equities

Investindustrial and Alibaba likely to submit a join bid for The Body Shop from L’Oreal

Blackstone selling Logicor to China Investment Corp (EUR 12.25 bln)

KKR raised USD 9.3 bln in new Asia buyout fund

Exxon misleadig about climate change impact of its business

Pfizer to hike prices of some drugs in US by 20%

Goldman Sachs eying to trade Saudis stocks

Home Capital to face regulators on June 26

Bonds

10-yr Trys yield at 2.17%% (2.16% critical level, on Friday closed below 200 DMA)

10-yr Bund yield at 0.27%

EURUSD

Resistance at 1.1284, 1.1300 (big level), 1.1355/65and 1.14/15/1600 range

Should see lots of hesitation ahead of 1.1300

Support at 1.1213 (10 DMA), 1.1200 and 1.1179 (23.6% Fibo)

New trading range 1.1000-1.1500 ?

Morgan Stanley switching from end year 0.97 level for EURUSD to 1.1800

On strong data, political stability, valuations and equity market inflows

A very nice switch…

USDJPY

US yields taking the cross lower

Support at 200 DMA at 110.34, 110.10 (Ichimoku) and 109.60 (76.4% Fibo)

Bids sitting ahead of 110.00, with stops below

Resistance at 110.50 (61.8% Fibo), heavy level

New trading range 108.00-112.00 ?

GBPJPY - With GBP under pressure and strong JPY double whammy  possible here... looking for lower levels

AUDJPY - Are bears controlling the market?

Weekly Commodity: Oil and Sugar under pressure, Grains in a vacuum Link 

Upcoming Data/Events

June 8 – ECB meeting – Draghi being alone but inflation data from US and JP suggesting ECB to carry on with ultra-loose stimulus

ECB likely to adjust the risk to economy wording but no change to asset purchases

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

June 8 - Former FBI director James Comey to testify before Senate

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

June 13/14 – FOMC meeting – Jun hike probability at 95%, Sep at 28% and Dec at 40%. After Friday’s NFPs Sep hike may be skipped if data doesn’t come strong.

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 26, 2017 - Market Update

Short recap

Asia down as OPEC disappointed the market by not delivering what traders hoped for

Cut extended for 9 and not 12 months, expected deeper cuts

Oil was down 5% and still heavy today

Europe opening lower

Risk off continues on OPEC, lower yields and dovish Bullard (inflation worrisome, Fed aggressive)

Looking forward to balance sheet reduction in H2

Trump’s son-in-law who is a part of his senior advisers team is under FBI investigation over Russia

USD 20 bln Blackstone-Saudis deal underlies how important Blackstone is for Kushner’s family

As they borrowed from the company few hundred mlns and company worked on their NY mansion

Moody’s - China not able to curb the debt, risk of another downgrade

China to change Yuan fixing formula to adjust for lower volatility

China not to pursue a competitive devaluation

UK consumers hit by rising prices

UK’s May falling in polls, GBP down

Equities

Full “bail in” talk of regional banks Popolare di Vicenza and Veneto Banca

Denied by officials

GM facing a lawsuit over emissions

Ford behind GM in new models

Canadian banks don’t see the threat to their business from fallout of Home Capital

Bonds

10-yr Trys yield at 2.25%%

10-yr Bund yield at 0.36%

Fed funds rate vs EURUSD  link

EURUSD

Offers around 1.1250-60

Still lots of bid below

1.1314 (76.4% Fibo)

1.1128 (61.8% Fibo)

USDJPY

Bids towards 111.50, more towards 111.00 – range with heavy option expiries as well

Offers may be present going to 112.00

50 DMA at 111.25 and 50% Fibo at 111.24 acting as support

Iron ore

Inventories highest since 2004 (136 mln tonnes)

Important support 450

Data,

G7 meeting (growth, employment, security)

ECB’s Coeure (2000 GMT)

May 31 – former FBI director James Comey to testify before Senate

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

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 21, 2017 - Market Update

Short recap

Asia in green taking clues from US stocks

Europe opening mixed

Obamacare on the table again next Wed

Mnuchin was out with some details on tax reform

To be revealed soon (again…) and wants to push it through not waiting for healthcare bill approval

Trump doesn’t like Canadian milk

Despite Canada having USD 400 mln trade deficit in dairy products

Ontario (Province in Canada) to tax 15% all foreign property buyers

Kaplan (Fed) is ok with three hikes this year

Kuroda to keep current bond buying

US steel producers to benefit from higher defence spending

EU equities saw significant outflow ahead of FR elections

The money can return quickly after market positive election outcome

Recently we have mentioned that EU stocks trade at 20% discount to their US peers

French stocks to benefit most under this scenario

SNC-Lavalin Group buying WS Atkins (CAD 3.6 bln)

Deutsche Bank fined USD 157 mln over FX and Volcker

Danone completed acquisition of WhiteWave Foods (USD 12.5 bln)

Stays positive on earnings

Tesla recalling 53k cars

Earnings season

Visa – better results yesterday showed that consumer credit and spending is firm globally

Blackstone – better results on assets selling during Trump rally

Schlumberger – expecting worse results on rising costs, markets waiting for an update on drilling activity worldwide

General Electric – markets will question how efficient the company is (cost cutting, raising profits)

Honeywell International – expecting worse results on aerospace

Bonds

Cautious ahead of FR elections, keeping the yields low

Despite a small rise in yields as market expects positive outcome

10-yr Trys yield at 2.24%

10-yr Bund yield at 0.24%

FX

EURUSD – suffered from yesterday’s shooting in Paris and US yields moving higher

Trading flat ahead of very close FR presidential race

Let’s see whether the event will reflect in more votes for Le Pen but French are tired of terrorist attacks

To watch options expiries today: EUR 1 bln at 1.0600, EUR 1.27 bln at 1.0700

USDJPY – support at 200 DMA (108.90)

Some selling interest laying around 109.50 level

Commodities

Gold – 3m ATM vols still at the lows

Gold has the room to go lower on risk on election outcome, lower JPY and higher US yields/USD

After printing the high at 1295 looking at support at 1267 (descending trendline)

Then 1250 (200 DMA) and 1248 (50% Fibo)

Data

EZ: Flash PMI – expecting a small dip

UK: Retail Sales – keep slowing

US: Flash PMI – expecting a small dip

IMF, World Bank and G20 meetings/speakers until Sunday

Trump less aggressive with protectionism

Kashkari (Fed) speaking at 1330 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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Mar 14, 2017 - Market Update

Short recap

Europe opened lower

Brexit bill approved without any amendments – victory for May

Not to be invoked before Mar 27

FTSE pushed to retest the highs

14 mln Americans to lose medicare coverage is a bit bitter pill for Trump and his administration to swallow

Merkel to meet Trump on Friday instead of today due to flight cancellation (NY area bad weather conditions)

Intel buying Mobileye (USD 15.3 bln) to enter the field of autonome driving with direct competition of Nvidia and Qualcomm

Building a one place to do get all, so car makers can get all what they need in driverless technology and equipment

Mylan settled with Roche to produce a biosimilar version of breast cancer drug

Vista Equity Partners buying DH Corp (CAD 4.8 bln) to bet on fintech future

Morgan Stanley taking wealth management more digital and hiring tech specialist to train advisors

Blackstone to set up EU headquarters in Luxembourg

US cyclicals reversed yesterday and VIX dropped, proving we are in a bullish trend going to FOMC

EUR – a nice correction of Friday move in many crosses

But let’s wait for FOMC and market reaction

Thursday to be a “D” day (decision day) for EURUSD and its direction

USD – getting muscles ahead of FOMC

FX options

Vols keep falling with Implied still above Realized

Despite risk events like Dutch elections and FOMC

Once these events are off the table, expecting further drop in vols

Looking further to French election vols on election days decline in line with overall market

Seeing the vols cheap considering that Le Pen is still strong part of the presidential race

May be vols pricing is derived from current market sentiments? It doesn’t really make sense.

GBP vols no reaction to Brexit bill approval

Just spot dropped to 1.2123 from around 1.2200

Vols in line with the market heading lower

Trys and Bund yields higher (2.62% and 0.48% respectively)

Peripheral spreads unchanged, waiting for Dutch elections tomorrow

GE-FR spread steady at 61 bps, to watch reaction to Dutch elections results

Oil still second guessing on how big and sustainable the supply overhang is

WTI and Brent oversold, resistance 50.60 and 53.30 respectively

US shale production rising

Gold range bound

Levels: 1177, 1193 and 1210, 1221

Data

GE: ZEW Economic Survey – expecting higher

EZ: Industrial Production – expecting higher

US: NFIB Small Business Optimism Index – to keep positive

This week is busy:

Mar 13-14 – US budget draft to show first details of Trumps stimulus plan

Mar 15 – FOMC (25 bps hike expected)

Mar 15 – Dutch elections (polling stations close at 2000 GMT, first exit polls to start right after)

Mar 15 – US debt ceiling deadline

Mar 16 – BoJ meeting (right after Fed hiking…)

Mar 16 – SNB meeting (to be watched as EURCHF is not behaving in a normal way)

Mar 16 – BoE meeting

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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Mar 13, 2017 - Market Update

Short recap

Asia up with a grain of caution

EU mixed

US may give a 90-day notice to pull out from NAFTA

Trump-Merkel to talk on NATO, Putin, Ukraine

Article 50 may be triggered already on Tuesday

If bill with amendments approved in today’s vote

G20 to discuss currencies as well (Fri/Sat)

Mnuchin likely to brief partners on Trump agenda and currency valuations

G20 - GE FinMin Schauble and Buba Head Weidmann to hold press conference on Saturday

TPP members + China and South Korea to meet on Tue/Wed

To discuss next steps after US has pulled out

Goldman Sachs overweight China equities

HSBC Holdings to change CEO

BHP Billiton struggling to reach the deal with union at its Chilean copper mine (largest in the world)

Volkswagen plead guilty, settling for USD 4.3 bln

Touristic travel to US facing headwinds on strong USD and uncertainty over Trump’s immigration ban/steps

Big oil names exiting Canadian oil sands as they are more attracted by shale

Valeant Pharmaceuticals rolled its USD 30 bln debt obligations and extended the maturities

Blackstone getting ready to exit its private equity investment in Logicor (EU warehouses) for EUR 13 bln

ECB might have discussed whether to rise rates before the end of QE – good enough on Friday to push EURUSD to 1.0700 level

JP Morgan sees USDJPY at 105.00 level at year end (revised from 99.00)

On US addressing trade deficit and risk of US protectionism

Smets (ECB) not signalling a change in policy

Last week ECB was a reflection of somewhat changed reality

EURTRY above 4.000 on tension in a referendum preparation and campaigning in NL and GE

DXY off, support at 101.05 (50 DMA), 101.00 (76.4% Fibo) and at 100.81 (100 DMA)

EURCHF – getting ready for ECB policy change? No fundamentals behind, let’s watch the SNB on Mar 16

EURUSD – strong resistance around 1.0800/50

Draghi out today – a risk for newly established longs

Draghi speaking at G20 on Friday

FOMC committing to higher pace of rate hikes

Risk not priced in by the market at all

USDJPY hourly - Support at 114.30, resistance at 115.45 (Fibo levels)

Data

ECB’s Lautenschlaeger speaking (1245 GMT)

ECB’s Draghi speaking (1330 GMT) – risk to new EUR longs

US: Labor Market Conditions Index – expecting positive reading

This week will be busy:

Mar 13-14 – US budget draft to show first details of Trumps stimulus plan

Mar 15 – FOMC (25 bps hike expected)

Mar 15 – Dutch elections

Mar 15 – US debt ceiling deadline

Mar 16 – BoJ meeting (right after Fed hiking…)

Mar 16 – SNB meeting (to be watched as EURCHF is not behaving in a normal way)

Mar 16 – BoE meeting

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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