May 15, 2017 - Market Update

Short recap

Asia up despite cyber attack and North Korea

Europe opening higher despite more cyber attack threats

Chinese Belt and Silk Road initiative uniting Asia, Africa and EU versus Trump’s America first

ECB’s Weidmann – Macron’s win and strengthening recovery sets ECB to unwind the ultra-loose policy

But inflation needs to be more sustainable

Fed’s Evans – to start balance sheet reduction at the end of 2017 and can take 3-4 years

Low volatility – need to wait for business cycle reversal to see the volatility spiking as political or security risks are not good enough reasons

Equities

HFs, MMs and top investors to reveal their Q1 regulatory fillings of their purchases/sales of stocks

Would be very interesting reading with respect to Trump trade

Dassault Aviation looking at new contract next year

Lidl to make a footprint in US this summer

GE supporting NAFTA, to continue growth in Mexico

And double its purchases from there

Spotify to launch listing on NYSE (USD 13 bln)

AstraZeneca up on lung cancer drug trial results

Lilly confident with migraine treatment results

Home Capital planning asset sales to repay CAD 2 bln loan

CIBC got green light to buy PrivateBancorp

No more upfront bonuses from BoAML to lure the talent (end of industry practice)

Bonds

10-yr Trys yield at 2.33%

10-yr Bund yield at 0.39%

June hike probability down to around 78% from above 90%

DXY

USD stayed quite resilient despite weaker US data, yields and political mess in US

Needs better Q2 data and Washington to deliver

Otherwise the 1.1022 (FR election high will be in focus)

Resistance 99.26 (Fibo 61.8%), 99.18 (200 DMA), 99.08 (10 DMA)

EURUSD

EUR net specs turned long 1^st time since May 2014

EZ data and Merkel’s advance supportive

Had bit of consolidation above 200 DMA at 1.0824

Selling area may be around 1.0950/75 ahead of rising trendline at 1.0982

Interest to buy likely towards 1.0830/40

61.8% Fibo at 1.0933 acting as resistance

10 DMA at 1.0918

USDJPY

Resistance 113.76 (76.4% Fibo)

Offers likely around 113.50 and towards 114.00

Support at 113.20 (10 DMA), 112.97 (100 DMA) and 112.68 (61.8% Fibo)

Gold

Was on the way toward 1200 but North Korea, weaker US data and unpredictability of Trump stopped the move

COT report – no selling/increase of shorts just longs liquidation

Resistance at 1245 (200 DMA), 1255 (61.8% Fibo)

Support at 1230 (50% Fibo & 10 DMA)), 1228 (100 DMA) and 1204 (38.2% Fibo)

Oil

Russia, Saudis supporting 9-month cut deal extension

Oil run on short-covering only

Floating storage down by 1/3

Chinese eying oil and gas from US

Chinese steel production at record high (to benefit from rising prices) while demand flat

Despite gov attempts to curb production

Upcoming

Speakers:

Nouy (ECB), Dombret (Buba) 1050 GMT

Praet (ECB) 1145 GMT

Angeloni (ECB) 1645 GMT

Tue

ECB’s Nowotny, Coeure speaking

Thu

ECB’s Mersh speaking

Fed’s Mester speaking

Fri

ECB’s Constancio speaking

Fe’s Bullard speaking

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 above 78%

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 9, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher but correcting

Kuroda sees 2% inflation in 2018

To keep the short term rate target at -0.1%

And 10-yr Japan bond yield at 0%

UK’s employers having hard times to recruit foreign workers

Fed’s Bullard having concern over weaker growth and inflation data in Q1

Alex Weber from UBS (former Bundesbank head):

Brexit negative for Europe, more volatility to come

ECB likely to remove some easing wording in June

And announce taper in Sep

Equities

Akzo Nobel rejected the PPG Industries take over bid again

UK’s energy supplier Centrica not very happy with warm weather and low commodity prices

As they bite into the margins

Home Capital suspended dividend, burnt 1.6 bln out of 2.0 bln of line of credit as deposit flee away

Industry veterans added to the Board

Suncor looking at new oil sands project in Alberta (Canada)

ISS pushing shareholders of PrivateBancorp to reject takeover offer from CIBC

Earnings

Commerzbank reported higher operating income, proof that raising rates benefit banks

Walt Disney expecting better results

Valeant investors more focussed on asset sales than earnings

Others reporting: Allergan, Duke Energy, Nvidia, Electronic Arts, SunPower,

VIX touching the 9.77 level, lowest level since 1993

Market sees very little risk in the near future

Will not last long, what is going to be the trigger?

Bonds

10-yr Trys yield at 2.39% with real yields at 2 month high of 0.51%

10-yr Bund yield at 0.42% - ECB’s June language adjustment and beginning of taper in Sep getting priced in

Yield likely to move to 0.50% attacking the recent highs

FR-GE spread stuck at 42 bps (after Macron victory), stabilized here

What is still above 20-30 bps historic levels but market is waiting for June Parliamentary elections

EURCHF, USDCHF – weaker CHF on higher yields

And money flows leaving safe heavens

To watch SNB sight deposits stats – to stabilize or fall?

USDJPY – on the way to 115.00 after clearing Ichimoku

Next resistance 113.76 (76.4% Fibo)

Risk on, US yields and tax reform progress crucial

Commodities

Oil very indecisive as OPEC/non-OPEC cut may extend to 2018

But slowing demand and rapidly rising production in US temper the cut impact

Gold playing within 1200/50 range

USD and US yields not helping

Options market back to neutral

Specs long cut, real money no change

Data

US: Small Business Optimism Index to slow a bit

US: JOLTS to slow a bit

Fed's Kashkari (1300 GMT), George (1540 GMT), Rosengren (1700 GMT) and Kaplan (2015 GMT) speaking

G7 finance ministers meeting in Italy this week

Discussing: trade, financial institutions, fighting inequality and tax crime

Upcoming

Wed – ECB’s Draghi and Fed’s Rosengren, Kashkari speaking

Thu – Fed's Dudley speaking

Fri – US CPI and Fed's Evans speaking

May 25 – OPEC/Non-OPEC meeting

June 8 – UK elections

June 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. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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May 5, 2017 - Market Update

Short recap

Asia lower on commodities losing the ground on worries about the global growth

Europe opening lower

DAX printing new historical high

Praet pushed EURUSD higher with ECB guidance shift to focus on data

House approved new healthcare bill

Now it is heading to Senate where it will face a strong opposition

EZ to grant a relief on Greek debt but reforms first

Equities

Ferrari driving super high

Having the room to go even higher among luxurious brands based on fundamentals?

Johnson & Johnson to pay USD 110 mln in cancer dispute

CIBC making offer for PrivateBancorp better (USD 4.9 bln)

Earnings season,

Berskshire Hathaway reporting, the annual shareholders meeting to follow

Bonds

Bond markets pricing in Macron’s win

FR-GE spread down to 44 bps

10-yr Trys yield at 2.35% - substantial rise on June hike expectations

10-yr Bund yield at 0.38%

EURUSD higher ahead of French elections

Move in EUR, not USD

Strong resistance at 1.1020 (descending trendline on daily chart)

But USD strength can come from much better headline NFPs or earnings rising more than +0.3%

Eventually, the rising peripheral spreads

Data

US: NFPs – market not expecting any surprise based on strong ADP

Full focus on earnings growth given the full employment

Headline +185k exp. vs +98k prior

Unemployment rate 4.6% exp. vs 4.5% prior

Average hourly earnings +0.3% exp. vs +0.2% prior

Fed speakers (GMT):

Fischer 15:30

Williams 16:45

Yellen, Evans, Rosengren, Bullard 17:30

Upcoming

Sunday – French presidential elections 2^nd 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. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

   

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Apr 13, 2017 - Market Update + Few thougths on Trump

Short recap

Asia lower

EU opening lower

Trump proved me wrong about non-event end of week

By the way, Trump not accusing China from currency manipulation anymore? Let’s call it a U-Turn…

Well, it is officially true from yesterday as he realized that it is him and not Chinese

Who is to be labelled as a currency manipulator when moving EURUSD to 1.0670 from below 1.0600

The move was based on his words about Fed keeping the rates low, USD getting strong and not flagging China as a currency manipulator

Also to remember that 40% of US debt is owned by foreigners

No surprise that Trump doesn’t want to mess up with them…that much

Don’t get confused by Trump’s rhetoric and focus on hard facts as Friday’s US CPI and Retail sales data are

As the stock market is closed on Good Friday, the reaction of bond market will be crucial for further direction of USD

US bonds close at noon local time

US: Headline CPI likely to edge up a bit despite lower oil but Core should stay in a focus of Fed (previous 2.2% y/y) anyway

Meanwhile Fed officials keep talking about staying on the track with rate hikes

And the start of reducing the balance sheet this year

US and Russia relations still below zero

While China is becoming a new friend of Trump especially on North Korea

A passenger of United Airlines taking the case legal

Global airliners should pay attention marketing wise

As overbooking, even legal, is a standard practice among many of them

Tesco’s corporate results above estimates as structural changes are paying off

Icahn via CVR Energy betting big on biofuels subsidies drop

Actually, started to do so before becoming an advisor to Trump

Some of Tesla’s investors pushing for adding independent directors to the Board

To balance Musk’s interests

Qualcomm paying USD 815 mln to BlackBerry over royalties

And keeps fighting Apple over chips

Volkswagen to build a new plant in US (USD 900 mln)

Bankers in Canada are doing well as CIBC is building a new HQ in Toronto for 15k employees

Earnings season

JPMorgan – expecting a raise in profit on better lending activity and activity in capital markets

Wells Fargo – expecting a small dip in profits due to legal costs

While should benefit from upcoming Trump’s easier regulation and higher interest rates

Citigroup – expecting a raise in profits as its global business is growing and higher activity in capital markets

10-yr Trys yield at 2.23%

10-yr Bund yield at 0.19%

Data

US: Initial Jobless Claims expected higher

US: University of Michigan Sentiment Index expected lower

Upcoming:

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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