Sep 8, 2017 - Market Update (North Korea/Irma - unhedged over the weekend?, Dovish Draghi but no indications, 10-yr Trys yield dipping below may bring more declines, EURUSD - 1.2000 a fair value, 1.2100 to hurt sentiment and DAX, Platina to catch up Gold rally, WTI at USD 55 unsustainable, BMW taking e-cars seriously, Amazon in a need of 2nd US HQ)

Short recap

Asia in red

Europe opening lower

ECB kept its policy unchanged

Draghi stayed dovish, has not offered any clear indication on what’s next

Despite strong EUR pushing inflation lower and economy doing well

Ifo head warning of next EZ crisis

Market keeps testing upside in EURUSD

North Korea (important public holiday 9.9. may be topped by another missile test) and Irma risks present – going unhedged to the weekend?

Equities

Eicher Motors interested in Ducati (USD 2 bln)

BMW firing on all cylinders to start mass production of e-cars

To compete with Tesla with 12 models by 2025

EURUSD at 1.2100 will be noticed by EZ stocks

Likely to change the sentiment, hitting DAX

An opportunity from Harvey/Irma as insurance (-12%), leisure stocks were hit yesterday

Insurance down 12%, while during Katarina declined 5% only

Hedging by S&P 500 makes sense

Amazon kicking out competition among cities in US

By announcing plans to build 2^nd HQ (USD 5 bln)

Apple likely to face supply shortage and delays in new iPhone production

Eli Lilly to cut off 8% of workforce

JPMorgan making consumer, retail and internet divisions to work closer

Best (Alibaba behind) launching IPO in US (USD 930 mln)

Bonds

10-yr Trys yield at 2.04% - dipped lower in Asia trading

The dip below 2% may see more declines

10-yr Bund yield at 0.29%

Investors unloading property bonds linked to Texas (hit by hurricane Harvey)

DXY

Below 2016 low at 91.88, closing there today?

If it does, more USD weakness is likely with target around 89.00 area

Close above may confirm the lows in USD

Lower capital demand, thus growing USD supply has negative effect on USD

Trump needs to deliver (tax reform for companies to increase investments) and Fed to hike to support dollar

EURUSD

Dovish Draghi but EUR higher…

As effects of higher EUR are offset by lower yields

1.2000 is the fair value based on models

Resistance at 1.2071

Market pricing first hike in June 2019

Area between 1.1850/1.2050 may be a new playground until FOMC and next ECB

USDJPY

Breaks 2017 low at 108.12

Heading to 105/106.00

Below 108.00 level looks attractive to Japanese investors

Gold/Platina

Resistance in sight at 1375/80 (Fibo 38.2%/2016 high)

Well supported by mix of low US yields, weak USDJPY, increasing amount of bonds trading at negative yield

Raising speculative positions and option hedging

Platina can catch up the gold rally soon, as it trades at discount

Oil

Harvey hit the oil biz in US and what about Irma that is stronger?

Decline in inventories offset by decline in production and refinery demand keep the oil rally in check

But getting to unsustainable levels with WTI getting closer to USD 55

Risk of correcting to USD 50

Data/events

ECB’s Weidmann (0900 GMT)

Fed’s Harker (1245 GMT)

Fed’s Dudley

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?

Sep 29 – US debt ceiling deadline

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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Sep 5, 2017 - Market Update (Very quiet in the markets…, North Korea making a storm?, Cryptos hit with Bitcoin & Ethereum down, JPY not what it used to be against Gold, EURUSD ready to correct if Draghi impresses, United Technologies buying Rockwell Collins, Air Berlin keeps flying for now)

Short recap

Asia in red

Europe opening flat to slightly higher

Very quiet in the markets…

North Korea still an issue, preparing another launch before weekend (Sep 9 a holiday in NoKo) as it moves ICBM to the launch place

BRICS meeting going on in China, but China not taking any actions against NoKo

China the key player even if US, SoKo and JP decide to act

US pushing for new UN sanctions likely targeting Chinese banks doing biz with NoKo

Crypto currencies had a tough day yesterday after China banning the new issue (ICOs)

Bitcoin down 16%, likely more regulations coming

Hurricane Irma getting stronger

Fed Dec hike at 40%

JPY losing its safe haven status to gold on North Korea risks  link

Equities

More defensive stance warranted like higher exposure to utilities, telecom, health care, consumer staples or gold miners

Europe – more neutral after EUR rise, US more positive on USD decline

Volkswagen not selling Ducati (EUR 1.5 bln), at least for now

Air Berlin keeps flying with the help of GE government

United Technologies buying Rockwell Collins (USD 30 bln) – a nice shift in the aerospace supplier space

That is still fragmented, premium is above 7% (still low) what may attract other bidders

Bonds

10-yr Trys yield at 2.13% vs 2.16% yesterday

Yields to go lower, to be watched after US holiday

10-yr Bund yield at 0.37% vs 0.38% yesterday

EURUSD

Slight bid tone on NoKo tensions

If no geopolitical events, may revisit 1.1700/50 area

And eventually correct further to 1.1400/1500 level

As a part of 4^th wave correction and Draghi impressing the market

Daily/Monthly RSI showing significant divergences

Monthly 23.6% Fibo at 1.1661, 38.2% Fibo at 1.1409

But overall little action before ECB

If Draghi doesn’t deliver 1.1950 is the next…

Resistance at 1.1950, 1.1980, 1.2070

Support at 1.1892 (55 HMA), 1.1892 (10 DMA), 1.1845 (23.6% Fibo)

USDJPY

110.00 as a ceiling due to risks holds

Bias slightly lower with bids at 109.20/00

Institutionals may be buying on downside

Key support at 108.26

JPY/Gold – JPY is not a safe haven as it used to be

As it lags the rally in gold by huge margin

But only in current NoKo tensions when rockets fly over Japan

Gold

Entire metal space seems to be overbought

Resistance in sight at 1375

Strong support at 1300/10

Data/events

BRICS’ summit in China

Fed’s Brainard (1130 GMT)

Fed’s Kashkari (1630 GMT)

Fed’s Kaplan (2300 GMT)

Thu

Mester (Fed)

Dudley (Fed)

ECB – Draghi to address a strong growth and low inflation vs still rising EUR

ECB is very concerned about EURUSD level & pushing any taper talks to Dec

Expecting dovish ECB with no hawkish surprise at all

Draghi to talk down EUR, if he delivers spot can move to 1.15/1600 territory

If not, the 1.1950 if the next…

Let’s get ready for low yield for longer period (not only from ECB)

Economic growth not impacted by strong EUR yet

Fri

Fed’s Harker

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?

Sep 29 – US debt ceiling deadline

Oct 18 – China National Congress

Norway is getting out of everything but dollars, euros and pounds  link

To read as it is an interesting shift in Norwegian wealth fund strategy

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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July 31, 2017 - Market Update (JPY of interest as safe heaven after CHF moving, MSCI not happy with Chinese suspended companies, Trys yield lower on softer GDP, Volkswagen not in a rush to sell Ducati, JP fund managers keep trimming equity exposure)

Short recap

Asia in green

Europe opening higher

Trump & Abe talked North Korea

JP fund managers kept decreasing equity holdings in July, especially North American assets

JP-US may discuss trade and currency as a one package

JPY may be of interest as a safe heaven choice after CHF is moving on ECB normalization

Equities

MSCI warned Chinese companies being suspended for trading for too long are at risk of getting excluded from index

Volkswagen not in a such a rush to sell Ducati and Renk

Audi going more green with EUR 10 bln cost cuts to fund green technologies

Bonds

10-yr Trys yield at 2.2.28% up from 2.30% Friday

Yields lower on the back of softer GDP figure and negative revision of Q1 GDP

10-yr Bund yield at 0.54% down from 0.53% Friday

Cleared earlier losses after higher CPI print from German

Greek 5-yr notes issued at 4.625%, lower then last time when they had traded

COT report (as of last Tue)

EUR longs at 91k vs 91k previously, no change

GBP shorts at 26k vs 16k previously, increased

JPY shorts at 121k (USD 14 bln) vs 127k previously, decreased

EURUSD

Market still skewed to go higher but serious caution is warranted

To watch this week’s EZ CPI, US PCE and NFPs as there is an interest to go short

But if we get lackluster prints the short squeeze is close

Close below 1.1653 (10 DMA) would suggest slowing momentum

Support 1.1621 (23.6% Fibo), 1.1615, then 1.1580

But breaking the 1.1600 can open the door to 1.1300

Resistance 1.1750, 1. 1776 (high), 1.1794 (200 WMA), 1.1810 (38.2% Fibo)

USDJPY

Asia saw some JPY buying, lower US yields in play too

Getting support from Ichimoku

Bids sitting at 110.50, more at 110.00 (around option barrier)

Stops likely below 110.00 and above 110.80, then naturally above 111.00

Resistance 110.97 (61.8% Fibo)

Gold

Resistance at 1274 (76.4% Fibo)

Support at 1261 (61.8% Fibo) ad raising trend line

Data/events

Wed

Fed’s Mester (1600 GMT)

Fed’s Williams (1930 GMT)

Fri

US NFPs – 173k exp

Aug 24-26 Jacskon Hole

Draghi’s show up highly expected in the light of potential tapering

Any clues on EUR 60 bln monthly purchase being taken down o 40…or?

Sep 7 - ECB

Sep 19-20 FOMC

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 22, 2017 - Market Update (Harley Davidson buying Ducati, PIMCO on Chinese bonds, Frankurt to top London, Brexit laws blocked by Scots and Lords?, New US healhcare bill coming)

Short recap

Asia higher as oil found some ground

Europe mixed

German FinMin out with Frankfurt a good alternative to London

As ECB and banking oversight is there

Luring European Banking Authority there as well

Likely to cut taxes

PBOC not planning to shrink the balance sheet as Fed does

Macron – stronger integration of EZ to come (via common budget)

Brexit – getting tougher for May as Scottish parliament and House of Lords may unite with some MPs (Liberal and Labour) to block necessary Brexit bills

US pushing China to do more on North Korea

New healthcare bill is coming to life but watch the clash between Senate and the House

Equities

Ok to stay long equities on valuations but some macro worries appearing and volatility is extremely low

A time to buy protection going to lousy summer trading and position before wild Q3?

Harley Davidson eying to buy Ducati (belongs to Volkswagen/Audi portfolio) (EUR 1.5 bln)

Diageo buying tequila brand Casamigos (owned by George Clooney) for about USD 1 bln

Nike to sell directly on Amazon.com

RBC to cut jobs in order to push new technology

Cenovus having hard time to sell assets as oil prices are low

Wal-Mart and GM driving renewable energy sector as the largest buyers

Fed to release banks stress test results

Bonds

10-yr Trys yield at 2.15% - under pressure from falling oil and commodities

10-yr Bund yield at 0.26%

PIMCO on Chinese bonds:

Inverted yield curve pointing to stress (10 yr CGB yield dropped below 1 yr yield)

Result of tightening by PBOC and lower liquidity

Growth to decelerate into 2018

Stress in interbank market to be taken seriously

US high yield credit spreads widen on the back of stress in energy sector

That needs to cope with high debt (still growing) versus lower operating income from low oil prices

EZ bond yields diverge depending on the debt load (top EZ countries from lowest to highest)

Used to move in tandem

Germany, Finland, Netherlands, Austria

EURUSD

In the absence of data, the flows will be affected/limited by expiring options:

1.1000 (EUR 1.3 bln), 1.1090-1.1100 (EUR 1.87 bln), 1.1140 (EUR 423 mln), 1.1160 (EUR 800 mln) 1.1175 (EUR 2.2 bln), 1.1200-10 (EUR 1.7 bln), 1.1250 (EUR 2 bln), 1.1275 (EUR 660 mln) 1.1300 (EUR 74 5 mln)

Break of 1.1178 (10 DMA) to negate the trend lower

Next resistance at 1.1187 (23.6% Fibo)

Support at 1.1120/30, 1.1100 and then 1.1067 (50.0% Fibo)

USDJPY

Resistance at 111.24 (50.0% Fibo), 50 DMA at 111.15, 200 DMA at 110.85

Bidding interest on importers side on dips, while offers from exporters sit above 111.50

Stops below 111.00

Experiencing a strong correlation with real yields

Thus correction in US yields and oil higher to weaken the JPY

Expiring options will likely drive the market:

110.00-10 (USD 1.9 bln), 111.00-10 (USD 2.7 bln,) 111.50 (USD 690 mln) 111.80 (EUR 575 mln) 112.50 (EUR 1.7 bln)

Data/Events

EU Summit

ECB General Council meeting

ECB’s Hakkarainen (0820 GMT)

Fed’s Powell (1400 GMT)

Fri

Fed’s Bullard (1515 GMT), Mester (1640 GMT), Powell (1815 GMT)

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 27, 2017 - Market Update + ECB

Short recap

Asia up

Europe opening lower

BoJ – no change, outlook for econ up, CPI down

NAFTA to stay for now, I “admire” the respect of Trump for his partners

Trump’s tax reform out, if in place making a huge hole to federal budget

And making Fed to move faster

So far no inspiration for the market as it lacks the details and is very complex thing

No US Gov shutdown until Sep 30

New healthcare bill getting support

PBOC keeps reducing risk in financial system what is reflected in Shanghai Composite

Equities

US stocks didn’t hold gains after Tax reform announcement on fading momentum

With Home Capital Group in a need of USD 2 bln credit line

Something is going on in Canadian real estate

Airbus having a legal case

In love with Ducati? Likely on sale, just contact Volkswagen…

Earnings season

Twitter, Fiat-Chrysler surprised, strong results from BASF and Deutsche Bank

Alphabet – expecting higher revenue, would be interesting to see any comments on diversifying its advertising revenue over other areas (cloud…etc.)

Microsoft – expecting better results as company benefits from its cloud services

Amazon – expecting better results as it benefits from its market position but some risk of using cash are present

Intel – Mobileye acquisition to pay off but company is still having to fix the core

Others to report: Celgene, Ford, Dow Chemical, UPS, Bristol-Myers Squibb, Johnson Controls, AbbVie, Marathon Petroleum, GoPro…etc.

Bonds

US yields experiencing more positioning then reflecting the reality of strong data and Fed likely hiking again in June

10-yr Trys yield at 2.31%

10-yr Bund yield at 0.36%

EURUSD (daily)

Negative tone under 1.0970

Looking whether closing the week below Sunday open at 1.0889

Support at 1.0850 and 1.0835 (200 DMA)

FX options

EURUSD 1m ATM vols

Saw a massive sell off in vols after 1^st round of FR elections

RR favoring calls (from O/N to expiries covering 2^nd round of FR elections)

ECB today – O/N vols trading at 17% setting the expected spot moving range at 0.9%

Commodities

Gold – now supported by geopolitical risks (fading) only

Upcoming

Bundestag voting on Brexit

ECB meeting

Expecting quiet meeting, no surprise (FR elections in two weeks)

Draghi to defend the QE continuation with maybe a slower pace of bond buying in 2018 and the rate rise well into the future

Will need to talk down any taper speculation at an earlier stage despite EZ macro data

Would correspond to three year cycle as Fed had

To please the hawks likely a small wording adjustment at Jun 8 meeting

Inflation to stay low (oil prices), core still weak at 0.7% (likely to be still disappointing in 2017/18)

Draghi/officials will be very prudent after last experience with a bit more hawkish tone

Having a huge market impact, had to talk it down after

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines

May 7 – 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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