Jan 18, 2018 - Market Update (Apple with USD 38 bln tax bill, bringing home USD 250 bln; Renault-Nissan a king over Volkswagen; Goldman Sachs dropping bond trading?; GE still on short side; Junk bonds spreads at record lows, China/Japan getting rid of Trys - nothing new; USDRUB floor between 55.70-56.00; Brent having hard time to stay above USD 70 mark; Biggest Bitcoin mines in China)

Short recap

Asia hitting record levels

Europe opening higher on bullish sentiment from US and Asia 

China growing too fast with respect to economic and pollution standards

Trump fighting back China with intellectual property breaches (likely getting ready for Davos)

Loud calls for EZ reform with new fiscal rules (GE) and joint safe assets (FR)

Equities

Cyber security start-ups having hard time

As very crowded market is moving fast and facing criminal predators, competition is a tough job

Volkswagen produced 10.7 mln cars last year

But the crown goes to alliance of Renault-Nissan though

Peugeot looking to come back to US market using know-how of Opel

Chinese interested in diabetes business from Johnson&Johnson (USD 3-4 bln)

Apple planning to open 2^nd Campus in US that is a part of 5-yr USD 30 bln investment package

And also repatriate USD 250 bln of overseas cash, thus paying USD 38 bln of taxes

Looking to create 20k jobs in US, focussing on data centers for iCloud, AppStore and Apple Music

Earnings

Goldman Sachs hit by a drop in bond trading

What makes question marks about keeping bond trading in current form

Or searching for new profit generating activities

Adjusted profit beat expectations but company is having harder time in trading than rivals

GE shares keep declining on USD 11 bln of charges and likelihood of a breakup

…already touched the GE story: Nov 15, 2017 – Story of the Week: Comparing old and new economy…General Electric and Tesla  link

Morgan Stanley, Bank of New York Mellon, IBM, AMEX reporting

New US corporate tax cut should help earnings to be revised higher

Bonds

10-yr Trys yield at 2.59% vs 2.56% yesterday

10-yr Bund yield at 0.57% vs 0.55% yesterday

Not only China but also Japan is lowering their Trys holdings  link

Back in 2004/05 both China and Japan held 50% of all Trys held by foreigners

And now they do 36% only

Junk bonds - The Great Credit Dilemma: When to Quit After Historic Rally?  link

Corporate bonds too expensive to own, but too valuable to sell

Schroder, Aberdeen fund managers plot exit strategies

USDRUB

Rising oil makes Russian officials not comfortable with strong RUB

As we saw back in 2017, they are quite good at defending certain levels

Support at 56.20 and 55.72 (Apr 2017 low)

Resistance at 56.73 (10 DMA), 56.76 (Sep/Oct 2017 lows), 57.20 (23.6% Fibo)

USDRUB weekly

Source: Saxo Bank

Crude Oil

Supported by decline in private inventories in US

And attacks from rebels in Nigeria

EIA inventories and OPEC Monthly report out today

With speculations about another decline in oil stocks and substantial rise of shale production

Brent having difficulties to stay above USD 70 level

Support 69.06 (10 DMA), 68.19 (23.6% Fibo), 66.84 (38.2% Fibo), 64.91 (50 DMA)

To watch the 66.84 key level

Source: Saxo Bank

WTI

Support 63.15 (10 DMA), 62.75 (23.6% Fibo), 61.43 (38.2% Fibo), 58.77 (50 DMA)

Source: Saxo Bank

Bitcoin miners locations

…or where is the cheap electricity and smart people are…

Data/events

ECB’s Weidmann (0800 GMT)

ECB’s Coeure (1430 GMT)

ECB’s Villeroy (1730 GMT)

Fed’ Mester (2305 GMT)

IMF’s Lagarde to speak today as well

Jan 19 – US fiscal deadline

Jan 23-26 – Trump in Davos with his crew

Will be interesting to see Macron/Merkel and the world

Against protectionism of Trump/US

Jan 23 – BoJ – any hints on potential taper?

Jan 25 - ECB

Jan 30 – US State of the Union

Trump to announce an infrastructure plan but is not clear who would build the infrastructure

Because of his anti-immigration policies

Jan 31 – FOMC

Feb 5 – Powell as Fed Chair

Feb 16 – Chinese New Year

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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Jan 8, 2018 – Weekly Commodity – Commodity Index rebalancing may bring corrections this week

The second week of the year is usually about Commodity Index rebalancing. During this process Commodity Index funds adjust their portfolios to those indices they follow. This often results in buying the worse performing commodities and selling the high performers. Some commodities may see a short term bounce or drop but without fundamental support any correction will be short lived

Oil

The main topic on the ooil markets is the increasing compliance of OPEC members with the extented agreement to cap oil production, although this is in some cases forced by external factors as in case of Venezuela. How ever the effect is the same, at the ned of the equation containing less supply and rising demand the result can be only hogher prices. The positive mood is also supported by overall rise of manufacturing activity. The Energy sector overall maybe not loking that bright due to low Natural gas prices but the oil bulls seem to be driven by strong fundamentals. However WTI is currently testing a key resistance (or rather the top of resistance zone) which could be hard to break as technical sellers will increase activity – also dont forget about rebalancing as crude had a very good year in 2017 and positions need to be adjusted.

Weekly Chart WTI Crude

Corn

Grains in general had a bad year despite several attempts to bounce, no real trend reversal took place. The high ending stocks and concerns about weak US exports pushing prices down. There are fears that the USDA Wasde report will bring another weak export data although on the spot market the export premiums seem to move despite missing any support of freight prices. After corn prices drop again below 350 this opens the room for testing 340 or even 330 in the coming weeks.

Weekly Chart Chicago Corn Futures

Sugar

With the cancelled European sugar quotas the market doesn‘t have a bright future ahead. The prices in Europe are still strongly diverging from the global sugar markets altough the move will have to come after the minimum sugar prices in Europe where also ending with the quota system. The prices tested 15.50 twice and recently dropped back. Give the oversupply and missing any short term weather threats, sugar will probably revisit the bottom of the uptrend channel which could be also broken on the way to tes new lows this year however the prices at or below production cost will bring drop in supplies in the long run.

Weekly Chart Sugar No 11

Good Luck and remember to watch your risk and be consistent.

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

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Dec 5, 2017 - Weekly Commodity: OPEC delivered extension now focus turning to US production & inventories

Commodities had a bad week caused primarily by correction in metals which couldn’t be compensated by slight bounce in Energy and Agriculture. The OPEC delivered extension of the production cut as the market expected, however as this was already priced in there wasn’t enough buying power to take prices to new highs.

As the huge rally from the end of summer was mainly based on the expectations that in Vienna the OPEC and the non-members lead by Russia will agree on the extension of the production cap, the news had limited impact last Thursday. The Friday move was likely just another reduction of short positions where some bears gave up. The biggest worries are now around the growing US oil production. While shale oil companies more and more seem to commit to growing shareholder value rather than market share, the US oil rig count and the US production is still on the rise. This can mean a hurdle in the efforts of OPEC and Russia to bring the market back to balance.

US Oil production – Source EIA and Land of Trading

The speculative positioning is extremely skewed toward the long side (763,786 longs vs 153,953 shorts) and such a concentration always brings the risk of a volatile squeeze. The effect of the extension of the supply cut on the inventories could be delayed according to Saudi oil minister by a seasonal decline in demand during winter. US oil rig counts published by Baker Hughes however keep growing currently at the highest levels since September.

CFTC COT Report NonCommercials positioning WTI

Technically we are in a strong resistance zone on WTI and after the OPEC deal was priced in well ahead, the market doesn’t seem to be strong enough to break much higher anytime soon. I expect the prices under the pressure of incoming bearish to drop back to previous supports before they would take off again.

WTI Weekly Chart

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

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Nov 28, 2017 – Weekly Commodity: Oil bulls supported by Canadian supply disruption, Thursday OPEC meeting in focus

The last week was rather quiet due to Thanksgiving but we had some interesting moves in the commodity space due to unexpected events. First of all the tired oil bulls got some support from the Canadian supply disruption while the grain market was kept low due to huge ending stocks and good weather forecast from South America. We saw also a revival of the industrial metals on South American mine strikes and drop in LME stocks.

After the news that TransCanada will reduce supply by 85% for November due to pipeline leak the bulls tried another run and pushed WTI to new highs while reaction on Brent was subdued. The Spread between the two dropped below 5$ for a day but bounced back quickly. The market is watching OPEC meeting in Vienna this week and the final agreement about the extension of the production cut. The key player is Russia this time as showed reluctance to extend the deal however market priced in 6-9 month extension. If the cartel and Russia fails to agree on this at least, oil may see a significant drop, while the upside potential is limited by already large speculative long and potential shale hedging activity.

Good Luck and remember to watch your risk and be consistent.

Mr. Tech Man

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, Blog: landoftrading.blogspot.com

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Nov 14, 2017 – Weekly Commodity: Did the Crude bulls run too far?

After the spectacular rally since September crude bulls are taking a brake recently. The main reasons of the rally were partially old news about the extension of OPEC and Non-OPEC production cut beyond March 2018. The geopolitical tension on the Middle East added further support to the bulls and the spread between the Brent and WTI widened to over 7$. Another strong support that helped the market rally were news about dropping inventories. However some analysts started to question this drop, especially the one reported from the Middle East.

Now with elevated speculative positioning where net longs are close to records seems that traders lost confidence a little. We have ahead this weekly oil reports and Monthly oil report from IEA and later the month from EIA which will be closely watched. However be aware of the fact that geopolitical tension could fuel a rally far beyond the levels that fundamentals would justify.

Technically WTI seems to have completed the 5th wave (or could be close to the end) and the 38.2% of Fibonacci level seems to be a good reason for a correction. I expect the prices to retrace somewhat toward the $52.50 support and then we will see if prices rally one more time ahead of a deeper correction.

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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 27, 2017 - Market Update

Short recap

Europe opening lower

Brexit – May visiting Scotland to offer more powers

Ahead of Scottish parliament vote on second independence referendum tomorrow

Wake up call for Trump trade after Obamacare repeal vote being pulled off (for the time being)

Risk of other reforms being delayed unless Republicans deliver very quickly

Trump to sign another batch of executive orders on Tuesday to support oil, coal and natural gas industries

Rumours about Trump giving the NATO bill of USD 374 bln to Merkel

Merkel’s party scored win in a local elections

Doubt about Trump trade to have wider implications for US stocks

As equity markets are forward looking and may discount the possibility of lower growth

Financials to feel the pain

S&P 500 – support at 2300 and 2250

DAX – resistance 12 200, former support at 12 100/000 now acting as a resistance

10-yr Trys yield at 2.36% (important 1.30% level)

10-yr Bunds yield at 0.39%

COT (Mar 21)

Institutional investors staying on sidelines, participation very low across commodity sector

USD longs up by 11%

EUR shorts down by 20%

WTI long reduction continued, shorts up

OPEC/Non-OPEC meeting confused the market

No extension, review later

Brent support at USD 50

Breaking USD 49.22 opens the door to Nov low at USD 43.58

Gold – resistance at 1258 (200 DMA)

DXY – H+S getting firmer foot, 200 DMA at 98.56

USDJPY – next support at 109.50 and 108.24 (200 DMA)

Check also 200 and 55 WMA

BoJ – easy monetary policy to stay

EURUSD – 1.0850 broken this morning

High from Dec 8 at 1.0873

200 DMA at 1.0880

Descending trendline around this level too

But still can get a touch above 1.0900 level (1.0910/25)

ECB – if the market attention shifts to macro from political uncertainty (Macron and Merkel doing better), ECB would likely need to pursue a less dovish policy

Data

GE: Ifo Business Climate Survey – no negative surprise expected

EZ:  Private Household Sector Loans – expected slightly higher

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 20, 2017 - Market Update

Short recap

Asia mixed after last week

EU markets opening lower

G20 take away:

Free trade short of support

Mnuchin to correct imbalances – but the simple message to US is: “Consume less, Save more”

End of globalization trends? Or end of US on globalization map?

Merkel and Abe showed strong support for free trade on Sunday (after G20)

G20 outcome is negative for stocks

FOMC feelings still present in the market

Positive on EU stocks (if French elections positive) but higher EUR is a risk

US stocks negative view, may be playing with put options going to Q2

Deutsche Bank to issue news shares worth of EUR bln as a part of strategy shift

Swiss Re to focus more on tailor made solutions to generate more profits out of the deals

Tesla raised USD 1.2 bln to fund its activities, especially Model 3 and battery production

The proof that investors are still interested to participate at Tesla story via shares or convertible notes

Sinopec close to buying refinery from Chevron in South Africa (USD 1 bln)

Bombardier still struggling to handle the deal with Toronto Transportation Agency worth of CAD 770 mln

Oil – speculative shorts double while longs were cut (COT report)

May be pointing to new weakening cycle in oil as US shale production keeps rising

Critical levels: WTI USD 51.15 and Brent USD 48

Gold – also experienced net long positioning cut by almost the half (COT report) going to FOMC last week

Risk to upside move higher on weaker USD, geopolitical risks and huge demand from India

Levels: 1238 (61.8% Fibo), then targeting last high at 1263

USD close to key support levels, trading below 100 DMA

DXY 99.26 (61.8% Fibo), H+S, descending support line around 98.90

Few Fed speakers this week with Yellen (Thu) can clarify the FOMC stance
Important event for USD will be Obamacare repeal vote on Thursday
If passed, likely USD supportive - a sign of Trump having support for his further policies

EURUSD not clearly ready to break 1.0800/50 on political risks ahead of French elections

But market keeps pricing out the risk of Le Pen win despite her advances in the polls

Security question back on the table after shooting at the airport in Paris

10-yr Trys yield at 2.49%, failed to break clearly 2.60% level again

Back to 2.30%-2.50/60% range

Bund yields rising at short end while longer end is unchanged

10 bps rise in EZ rates by Jan 2018 is already priced in

Visco (ECB) – rising rates and terminating QE can be closely linked

Data

EZ: Labour Cost Index – expected to go higher

US: Chicago Fed National Activity Index – expected to go higher

France – election debate tonight

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 10, 2017 - Market Update

Short recap

Asia higher

EU opening higher

Volkswagen keeps cutting on top execs bonuses

Akzo Nobel turned down EUR 21 bln offer from PPG Industries

Looking to spin off chemical operations

WikiLeaks offered technology companies to share details on CIA hacking tools in order to develop updates

Alibaba in talks to raise USD 5 bln via offshore loan for refinancing and general use

Bayer and Monsanto selling assets worth of USD 2.5 bln to get regulatory approvals for their merger

BASF seems to be a buyer of some assets

DAX above 12 000

S&P 500 eying 2400, if broken may be a positive signal

If not, the range 2350-2400 may stay with us for some time

Well having more than 8 years of bull market

US stocks trading at 20% premium to EU peers

Risk of weak oil to be translated to weakness of stocks at certain point

Oil under pressure from speculative long positions liquidation

Significant amount of longs still in red waiting for a sell signal on potential spikes

Brent USD 50 level may be a trigger point for OPEC verbal intervention or eventually action

Gold still neutral – support at 1193, then at 1177

ECB

Draghi had to admit some improvement what in turn supported EUR across the board

ECB neutralizing its guidance but wording staying the same

Rates at current level or lower for extended period of time, well past the horizon of QE

From Apr till end of Dec 2017 or beyond in necessary asset purchases will be EUR 60 a month

No need for further urgent measures

No new TLTRO

Some of the risks didn’t materialize

EZ yields moving higher even the ECB statement was dovish

Peripheral spreads without any change meaning no sign of ECB support

EURUSD - daily levels:

3rd res 1.0707

2nd res 1.0661

1st res 1.0618

Pivot 1.0571

1st sup 1.0529

2nd sup 1.0482

3rd sup 1.0439

USDJPY – strongly benefiting from higher US yields (10-yr above 2.61%)

Daily levels:

3rd res 115.85

2nd res 115.42

1st res 115.17

Pivot 114.74

1st sup 114.50

2nd sup 114.07

3rd sup 113.82

Data

EU Summit

GE: Trade Balance

UK: Manufacturing production – expected lower

US: NFPs – headline figure and unemployment rate not that important unless we have a bad surprise from headline number

All is about Average hourly earnings after January drop

Important for future rate hikes pace

Market pricing June hike at 52%

Headline +190k vs +227k in Jan

Earnings +0.3% vs +0.1% in Jan

Unemployment rate 4.7% vs 4.8% in Jan

Next 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 – 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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