Mar 8, 2018 - Market Update (ECB bit hawkish, tomorrow's US NFPs' earnings bit weaker can push EURUSD above 1.2500; EURUSD weekly - a funny joke 1998-2000; Fed- 5 hikes in 2018?; S&P 500 still a bit rich but reasonably attractive; USD and US deficit correlating as before dot.com bubble; USD decline impacting reserve currency status; Aramco IPO going against OPEC?)

Short recap

Asia in green after strong US session yesterday

On Trump softer on tariffs – but do not get mislead by risk on mood

Europe opening flat to higher

ECB today likely to confirm a gradual shift

But still not major change in wording

Draghi to talk down any hawkish views despite strong EZ economy

Fed 4 hikes warranted, eventually 5 in 2018 according to DB Securities

Trump’s tariffs plan not signed yet (today?)

Canada & Mexico exempt temporarily

11 members to sign TPP (US withdrew from the deal)

Beige Book – prices rising, employment up moderately

Equities

Renault-Nissan-Mitsubishi alliance getting stronger

Some Goldman Sachs’ employees on notice to move to Frankfurt amid Brexit uncertainty

IKEA to keep up investments

Boeing – tariffs unlikely to impact plane prices but can hurt sales strongly

General Electric still under pressure, valued at USD 125 bln (while in Jan 2018 at USD 580 bln)

S&P 500 still a bit rich after recent correction

But at reasonable to attractive levels based on P/B, P/E or dividend yield relative to 10-yr Trys yield (2.88%)

Improving earnings expectations and excess capital being returned to shareholders are supportive as well

Huge risks is coming from US economy bleeding from trade/tariffs war

Tech, financials, industrial doing the best

S&P 500

Strong resistance around 2800 level (high + 76.4% Fibo at 2795)

Resistance 2744 (61.8% Fibo), 2742 (50 DMA) and 2735

Support 2703 (50.0% Fibo), 2677 (100 DMA), 2663 (38.2% Fibo) and 2671

Source: Saxo Bank

DAX

Strong resistance around 12 745

Resistance 12 275 (76.4% Fibo & 10 DMA), 12 528 (61.8% Fibo)

Strong support 11 866

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.88% vs 2.86% yesterday

10-yr Bund yield at 0.66% vs 0.68% yesterday

Interest rates are moving for the right reasons

This chart warns that the 30-year downtrend in interest rates may be over  link

USD following the US deficits again (budget and trade balance)

Remember the end of dot.com bubble? Quite similar….

How Corporate Debt Confirms The “Everything Bubble”  link

EURUSD

Resistance is fairly in place around 1.2555

Today a bit of sense of hawkishness from ECB and…

…tomorrow bit of weakness in earnings can push EUR above 1.2500

USD reaction to US tariffs will show further direction

Support 1.2318 (23.6% Fibo & 10 DMA), 1.2172 (38.2% Fibo), 1.2268 (10 DMA)

Weekly – anyone having fun with this chart?

Source: Saxo Bank

…but a Dollar decline rekindles reserve currency worries  link

Crude oil

Is Aramco share sale distorting OPEC policy?  link

OPEC cuts played well so far but the cost is losing market share to US shale

U.S. Oil Output Set to Average 10.7 Million Barrels a Day in 2018, Highest on Record  link

2018 oil output forecast to average 10.7 million barrels a day

Production expected to top 11 million barrels a day in October

Cryptos

SEC urging cryptocurrency exchanges to register

Data/events

ECB

Fri

BoJ meeting

US NFPs

Mar 12/13 – US bond auctions (10-/30- yr maturities)

Mar 21 – FOMC meeting (1 hike expected (market pricing at 86%) and 3 more in 2018 to be announced)

Mar 23 – US Fed gov spending deadline

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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Feb 9, 2018 - Market Update

European equities seem to be in a quite and cautious mood today after yesterday's red day. US futures are up a what gives additional comfort to the market is also the calm in FX. Bonds are getting slightly sold but yields are not moving very high.

It is an interesting situation when stocks got sold off heavily over the last two weeks but bonds and FX were not significantly impacted. In other words, there was no direct rotation out of stocks to bonds, what may be seen as a profit taking in stocks only as bonds barely moved.

Bond yields remain elevated but not spiking or moving rapidly higher. JPY is a proxy of safe heaven flows is offered today but seeing a bit of unrest in EM space. Let's see what will come up with US open and where we close tonight.

At he moment, despite lots of cautious about another wave of algos and systematic investors selling to adjust to their portfolios based on risk/volatility inputs we see currently S&P 500 around 2600/10 level and DAX around 12 100/200 as good points to re-enter the market to benefit from FOMO flows that may eventually start even today.

But bear in mind to manage your risk appropriately also in the light of upcoming weekend, especially if we do not see the US stocks moving higher on FOMO flows. If that happens, we can also get ready for another Monday risk off sentiment behaviour as there is still lots of moving sitting in selling volatility related products.

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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Feb 6, 2018 - Market Update (No recession short-term, healthy correction done, no global contagion, so let's hunt for bargains; One Fed hike is priced off; Watch today for Trys yields, JPY crosses, VIX; New turning points for VIX at 22 & 30; XIV a problem for Credit Suisse; BNSF Railway (part of Berkshire) joining Blockchain in Transport Alliance; Hedging by book: long gold, JPY, 10- and 30-yr Trys; The panic is over, moving to the last leg up of 2009 bull run;German coalition talks well covered blockchain)

Short recap

Asia in red

Europe opening lower

US Congress to vote on government funding

German coalition talks well covered blockchain technology to make Germany a fintech hub

Draghi not ok with EUR volatility due to potential inflation miss

Kuroda – no near-term hikes

Question – what now?

Honestly, I am not sure either…

…as Janet is celebrating and Powell not being able to find the “Buy” button

Market is down and Trump focussing on long term fundamentals and not the short term sell off

It reminds me local CEE politicians who cheer and show up in the public only in good times

Let’s sum up a bit

S&P 500 was 12% above 200 DMA – markets do not stay very long 10% above 200 DMA

(for regular bull market it is between 5-10%)

Technicals showed way-overbought markets

Most of the market followed the same direction (robots, ETFs, investors selling volatility) for months/years

Selling volatility/insurance and now covering positions

But after market dropping more than 6% all start to hedge (thus more selling)

S&P 500 found support at 2538 (200 DMA) after touching low of 2530

DAX didn’t care about 200 DMA and found support around 2015 highs, 2017 support levels

And below 12 275 (76.4% Fibo) after printing 12 141 low

VIX skyrocketed above 33 (up 113% on a day) but corrected (25+ levels signal market fear)

XIV (short volatility ETF) plunged (speculation that Credit Suisse lost USD 500 mln)

Let’ wait for official comments

Hedging based on history

Long Gold – pretty unmoved (sitting right below resistance zone (1357-1375)

Long JPY – sitting right lows of 108.12/107.31 acting as support but not very affected

Long 10- and 30-yr Trys – enjoyed very decent rally yesterday

Why to hedge?

CBs believe in rising rates globally on inflation pressures and strong growth

But China is slowing down and coping with huge credit problems

US economy topped, EU to follow soon and as Japan population is old, the lag

Example from 2011 – losses prior week, losses on Monday, more at the open on Tuesday

And recovery taking more than half a year…

What to do next?

As there is no recession risk near term, the healthy correction & late stage bull market panic is done

Stock markets will hopefully find their calm soon

So we can focus on hunting as a part of final leg up of the bull market that started back in 2009

…but be aware of:

FX, EM unaffected (EM equities down only 5%) – a positive sign

One Fed hike is priced off; If volatility continues another one can get priced off

No global contagion – a positive sign  

Watch today for Trys yields, JPY crosses, VIX (can fly in both directions with turning points at 22 or 33)

JPY 1m ATM vols (jumped from 6% to 10%)

Equities

Broadcom bidding for Qualcomm (USD 121 bln)

Bayer to sell more assets (seeds/pesticides) to please EU as it buys Monsanto

Elliot Advisors don’t like BHP’s dual listing (among other things)

Energy stocks still worth of looking at (also multiplied by recent sell off)

Boeing keen on a new mid-market jet

Bristol-Myers still behind Merck with cancer drugs testing data

Apple and Cisco come together to work with insurance companies on cyber policy products

Banks moving away from models to stock picking on new research rules

BNSF Railway (part of Berkshire) joining Blockchain in Transport Alliance

Earnings

Allergan, GM, Gilead Sciences, Walt Disney

S&P 500 daily

DAX daily

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.65% vs 2.86% yesterday

Yield at 3.00% a buying opportunity?

10-yr Bund yield at 0.73% vs 0.76% yesterday

Bitcoin

Bitcoin's Brutal Week Is Even Worse in South Korea  link

So-called kimchi premium disappears amid government clampdown

Bitcoin prices globally are sliding to their lows of the year

Data/events

ECB’s Weidmann (0900 GMT)

Fed’s Bullard (1350 GMT)

Feb 16 – Chinese New Year

Mar 4 – Elections in Italy

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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Dec 5, 2017 - Market Update (Brexit and US tax bill market movers, EU to review US tax bill and its implications, S&P 500 & DAX - what's next?, Apple to start to paying back taxes to Ireland in Q1 2018 (EUR 13 bln), Toll Brothers facing lack of skilled labour - an issue for home builders across US)

Short recap

Asia took a break

Europe opening flat to slightly up

US tax bill refining continues as the bill moves from Senate to the House before it lands on Trump’s table

Many have changed the wording from tax reform bill to tax bill

AMT getting challenged as many companies may loose the tax break and pay the 20% alternative minimum tax

EU to assess US tax bill and its global tax implications

Brexit still not moving to phase 2 as getting stopped at Northern Irish border

CBOE launching Bitcoin futures on Dec 10 while CME on Dec 18

Equities

US stocks saw another day of out of Techs rotation

But market was overall down on a small positive long term impact of tax reform

Sanofi having hard time in Philippines

Thyssenkrupp-Tata Steel merger facing unions

Dialog Semiconductor not happy with Apple developing its own battery saving chips

Apple to start to paying back taxes to Ireland in Q1 2018 (EUR 13 bln)

Toll Brothers to report better results on the back of strong job market but facing lack of skilled labour

That may not be the best thing for luxury home builder

S&P 500 daily – a correction back to 2475 level means down 7.1%

Source: Saxo Bank

DAX daily – range bound with 13 047 (100 DMA) support 

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.39%

10-yr Bund yield at 0.33%

EURUSD

US yields keep showing direction for USD

As USD bulls may get frustrated with inability to decisively break 2.40% yield in 10-yr Trys

Resistance 1.1870 (10 DMA), 1.1886 (61.8%), breaking 1.1961 high would be seen as a new direction setter

Support 1.1822 (50.0% Fibo), 1.1810 (38.2% Fibo of 2014/15 decline), 1.1794 (100 DMA), 1.1758 (50 DMA)

Source: Saxo Bank

USDJPY

Not able to break above 113.00 level

Resistance at 112.82 (50 DMA), 112.97 (23.6% Fibo)

Support 111.89 (38.2% Fibo), 111.68 (200 DMA), 111.57 (100 DMA)

Source: Saxo Bank

Gold

Resistance 1281 (50.0% Fibo), 1281-86 (50/100 DMA)

Support from rising trendline holds, then 1267 (200 DMA) and 1263 (61.8% Fibo)

Data/events

EU FinMin meeting

ECB’s Constancio

US Senate banking committee votes on next Fed chair Powell

Dec 13 – FOMC

Dec 14 – ECB

Dec 14-15 – EU Summit talking Brexit

Dec 21 – BoJ

Dec 21 – Catalonia elections

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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Oct 2, 2017 - Market Update (Catalan 90% vote, Johnson-May old friends, DAX attacking 12 954 on weaker EUR, 10-yr Trys yield bullish close, Global equity funds enjoying the money in rally)

Short recap

Asian up

Europe opening higher

Catalonian 90% vote for independence

Madrid and police not comfortable with it

Declaration of independence likely to come in 48 hours

Boris Johnson sees Theresa May gone within the year (friends…)

Boeing-Bombardier dispute a proof of UK-US Trump kind of preferential partnership

Warsh the new Fed’s head after meeting with Trump

Used to be a Fed gov (2006/11) but resigned over disagreement over bond buying

Other candidates might be: Yellen, Cohn, Powell, Hubbard

ECB close to tapering? What about the business and consumer confidence hitting multiyear highs…

Equities

Volkswagen making up the diesel scandal bill up to USD 30 bln

Global Logistic Properties buying Gazeley (USD 2.8 bln) to enter EU as a lucrative market

Germany eying to buy warplanes from Boeing

Bombardier goes short against Boeing but seals USD 1.7 bln deal with SpiceJet from India to sell 50 planes

Global equity funds still growing in size as investor poor money in

Cryptocurrency exchanges still facing the security and fraud issues

DAX to benefit from weaker EUR, next stop 12 954 or higher?

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.58% vs 2.58% on Friday – had a bullish close on Friday posting outside month/monthly reversal

10-yr Bund yield at 1.67% vs 1.07% on Friday

Spanish bonds - Catalan vote impact – we need to see market reaction first

As we balance between the independence and strong economy

COT report as of Tue last week

USD: Leveraged funds net sellers

Shorts at the highest level since May 2014

EUR: Largest net buying

Longs at 88k vs 62k previously

GBP: First net longs since Oct 2015

Longs 5k vs shorts 10k previously

EURUSD

Gapped lower but Catalan vote to have a short-lived impact

Unless we see a deep constitutional crisis in Spain

Support at 1.1762 (Ichimoku) 1.1720 (38.2% Fibo), 1.1708 (200 WMA)

Resistance at 1.1862 (23.6% Fibo), 1.1844 (50 DMA)

USDJPY

Worth of watching as DXY is getting some bullish signs

And Trump is moving with tax reform

Cross posted also a bullish monthly reversal on Friday

And trades above the descending trend line)

What may open the door towards 114.36-50 range (recent highs)

Or even 118.60/65 if we seen the Trump trade back

Resistance at 113.25

Support at 111.85 (23.6% Fibo), 112.28 (10 DMA)

Gold

Catalan vote had no major impact

Other geopolitical risks: NoKo, Kurdistan-Turkey, Iraq, Iran

Resistance at 1281 (50.0% Fibo)

Support at 1272 (100 DMA), 1263 (61.8% Fibo)

Data/events

ECB’s Linde (0930 GMT)

ECB’s Praet (1015 & 1300 GMT)

Fed’s Kaplan (1800 GMT)

Oct 1-4 – UK’s Tory party meeting

Oct 1-7 – Golden week holiday in China/Korea

Tue

Fed’s Powell

Thu

ECB Minutes

Fed’s Dudley

Fed’s Powell

Fed’s Williams

Fed’s Harker

Fri

US NFPs – 98k exp vs 156k prev

Unemployment rate at 4.4%

Earnings +0.3% vs +0.1% prev

Fed’s Bullard

Fed’s Kaplan

Oct 18 – China National Congress

Oct 22 – Japanese elections

Oct 26 ECB

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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Sep 22, 2017 - Market Update (China downgrade on still fast credit growth, NoKo a new H-bomb test while Kim is in NY, Stronger EUR weighting on DAX, Apple under pressure - a new target at 142?, May's perfect time of Brexit speech at 1900 GMT, Germany voting on Sunday, Gold at 1295 - which way?)

Short recap

Asia in red on NoKo and S&P downgrade of China (outlook stable) and Hong Kong (outlook negative). S&P not comfortable with Chinese still strong credit growth

Europe opening lower

Speculation that NoKo will test powerful hydrogen bomb in Pacific

PBOC asked Chinese banks to stop cooperating with NoKo

Equities

Lufthansa to absorb largest part of AirBerlin’s assets

While easyJet should get some too

Stronger EUR weighting on DAX

12 500 to be tested again

B&N Bank carrying a USD 6 bln hole on its balance sheet

Apple still under the pressure as investors question the new product range

If not comfortable, can eventually test 142 level (200 DMA)

Support at 153 (50.0% Fibo/100 DMA), 150 (61.8% Fibo)

Resistance at 156 (38.2% Fibo), 157 (50 DMA), 159 (23.6% Fibo)

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.25% vs 2.27% yesterday

10-yr Bund yield at 0.46% vs 0.45% yesterday

DXY

Heavy on USDJPY decline

Still not able to detach from current congestion zone

After FOMC pullback much stronger then in EURUSD

Why not following through and moving higher?

Source: Saxo Bank

EURUSD

If decisive move above 1.2000, we may see more gains

Strong support zone 1.1870/80

Support provided also from rising trendline (since April) and 1.1862 (23.6% Fibo)

Next levels 1.1819 (50 DMA), 1.1727 (200 WMA), 1.1720 (38.2% Fibo)

Resistance at 1.1941 (10 DMA), 1.1945 (55 HMA)

Large options expiring at 1.1925 (EUR 1 bln), 1.1950-75 (EUR 1.9 bln), 1.2000 (EUR 1.4 bln)

With more above 1.2000 level that can play in

Is the 1.2500 a target before correcting below parity like in 1998?

USDJPY

Resistance at 112.18 (200 DMA), 112.71

Offers starting at 112.50 on

Expiring option (USD 1.7 bln) at 112.00 may attract the cross

Support at 111.60 Ichimoku, 111.43 (23.6% Fibo), descending trendline

Gold

Support at 1295, 1281 (50.0% Fibo)

Resistance 1299 (38.2% Fibo), 1300, ascending trendline

All critical levels for further medium term direction

Bullish while above daily demand...

Data/events

ECB’s Coeure (0715 GMT)

ECB’s Draghi (0800 & 0930 GMT)

Fed’s Williams (1000 GMT)

ECB’s Constancio (1115 & 1315 GMT)

Fed’s George (1330 GMT)

Fed’s Kaplan (1730 GMT)

Brexit – a major speech from May (1900 GMT)

Is UK sort of reshuffling priorities or looking to reset the talks?

Rumours UK ready to pay EUR 20 bln a year for market access

EU’s Barnier to respond shortly after May’s speech

Sunday – German elections

How strong the grand coalition will be?

Sep 26 Yellen speaking about inflation and monetary policy

Oct 18 – China National Congress

Oct 22 – Japanese elections

Oct 26 ECB

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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Sep 14, 2017 - Market Update (Trump maturing, ECB not in a rush to hike, DAX at crucial 12 500, Back to Trump trade?, EURUSD at support zone 1.1 870/80, Amazon.com to sell sombreros, Munich Re hit by hurricanes, Oracle in the cloud)

Short recap

Asian down on weaker Chinese data

Europe opening mixed

Trump getting more experienced (less tweeting)

And starting meeting people (like Rep/Dem leaders) to move things forward

ECB to keep a steady hand on easy policy as inflation stays very low

Chinese steel mills production reaching record highs

Bitcoin on a weak foot after JPMorgan’s Dimon fraud comment

Historically, it is not the high valuations that trigger the stock market correction but the change in macro

Thus China and credit markets holding the key

Equities

EU short of EUR 5.4 bln from taxes from Google and Facebook

DAX at 12 500 – a crucial for further development

Apple likely to face delays in iPhone X shipping going to holiday season

Amazon.com to build a huge warehouse in Mexico

Kaspersky on the way out of US gov networks

Volkswagen along with FAW, SAIC recalling 4.9 mln cars

Munich Re hit by hurricanes

Oracle reporting today, market to check how successful their cloud business is. Expecting rise in revenue.

Bonds

10-yr Trys yield at 2.19% - seems comfortable within the 2.10-30 range

10-yr Bund yield at 0.40%

DXY

Can we expect a return of Trump trade? Tax reform, infrastructure and capital repatriation

All pointing to stronger economy and higher USD…

Strong support at 91.88 (2016 low), then 92.16 (10 DMA)

Resistance at 93.36 (50 DMA) and strong one at 92.74 (200 WMA)

EURUSD

Sitting at strong support zone 1.1870/80

Support provided also from rising trendline (since April) and 1.1862 (23.6% Fibo)

Next support 1.1752 (50 DMA), 1.1720 (38.2% Fibo)

Resistance at 1.1931 (10 DMA), 1.1940 (55 HMA)

USDJPY

Trading above 110.00

Support at 110.40 (76.4% Fibo),

Resistance at 110.55 (50 DMA), 110.97 (61.8% Fibo), 111.23 (Ichimoku cloud), 111.15 (100 DMA)

Resistance comes also from rising trendline forming triangle

Gold

Gold lower on higher USD despite stocks correcting

Support around 1300 but market may be comfortable at 1315 as well

Resistance at 1333 (10 DMA)      

Data/events

ECB’s Weidmann (1530 GMT)

ECB’s Mersch (1600 GMT)

Fri

ECB’s Lautenschlaeger (0815 GMT)

Sep 19-20 FOMC

Sep 21 – Brexit – a major speech from May expected

Is UK sort of reshuffling priorities or looking at a reset of talks?

Oct 18 – China National Congress

Oct 26 ECB

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 11, 2017 - Market Update

Short recap

Asia cautious under geopolitical risks (Syria, N. Korea and upcoming FR elections on Apr 23)

Europe opening lower

China said No, thank you to coal from North Korea and fully loaded ships are heading back home

G7 pressuring Putin to stop supporting Syria regime

Yellen said nothing new yesterday

Looks like Fed is happy where they are right now

Trump meeting top business leaders today to discuss their support for his plans in infrastructure and taxes

Elliott Management working on changes at BHP Billiton to benefit the strategy

Bain Capital and Cinven on the way to acquire Stada (EUR 5.3 bln)

Swift and Knight Transportation planning to merge their operations (USD 5 bln)

Gold-S&P 500 correlation - S&P 500 way above Gold since Nov elections

Which one will give up?

Either S&P 500 will correct or Gold will spike to catch up…

S&P 500 – support at 2280 (38.2% Fibo), may be looking at resistance at 2390 or higher to 2430

But bear in mind that “Sell in May and Go away” is very close

DAX – below former support 12 190 and then 11 850 to keep the medium term rising view in place

EURUSD – support at 1.0566 (23.6% Fibo)

Trading slightly below the rising support trendline

Bollinger bands started to expand what may indicate bearish view if EURUSD stays below trendline

Yesterday’s bond buying report from ECB showed that the bank keeps firing at full cylinders and is buying corps heavily

Daily purchases were at around EUR 483 mln level (as mentioned yesterday the average was EUR 365 mln)

All of that is happening despite the taper in place since Apr

If the ECB is tapering while corps buying is much higher than before, it points to ECB is buying much less govies

Not to forget we may have seen some pre-loading before Easter’s low liquidity in corps space as well

10-yr Trys yield at 2.34%

10-yr Bund yield at 0.19% - very close to the lows

French elections

Question is how much risk is priced in EUR and Bunds ahead of FR elections

Are we going to see the risk-on moves and a huge risk repricing in EUR and Bunds?

At the moment the EURJPY steady decline may be an indication of what market thinks…

GE-FR yield spread widening again as we are getting closer to Apr 23

EURUSD 1m ATM implied vols jumped substantially to 12.58 level from around 8.50 just few days ago

Goldman Sachs was out yesterday recommending to short OAT futures as a strategic positioning ahead of elections

Data

EZ: Industrial Production expected to edge higher

US: NFIB Small Business Optimism Index to keep the positive trend

US: Job Openings & Labor Turnover Survey expected slightly higher

Short week ahead of Easter holidays, thus lower liquidity

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

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