Short recap
Trump – Special Counsel headed by former FBI director Robert Mueller to investigate Trump-Russia connections
Risk off overall, messy market reaction in Asia but creation of the Counsel may temper down the nerves
USD - no clear direction for the market today yet
USDJPY – no clear safe heaven buying reaction overnight
Market still to face uncertainty until more clarity on the scope/areas of investigation and schedule is known
The investigation can take months/years
Republicans likely to prepare their own healthcare, tax and infrastructure bills, not waiting on Trump to clean up the mess
It will also serve as a way to differentiate from him
As mentioned yesterday, Trump is a small piece of US long term economic growth
Investors may be distracted and overlooking that US economy is strong enough to cope with Trump mess (productivity and capital wise)
Impeachment still way way far from here and need 2/3 of Senate vote
Possible impeachment – only three presidents faced it, namely Andrew Johnson (1868), Richard Nixon (resigned after Watergate scandal in 1974) and Bill Clinton
Fed June rate hike at 65%
EU rethinking the capital market union due to Brexit
And get the large chunk of trading in euro-denominated instruments currently traded in London
Equities
Elliot Management met with BHP Billiton yesterday
DOJ to file a lawsuit against Fiat Chrysler if no agreement over emissions
VIX jumped 45% yesterday
Investors taking profits and positioning with more caution also due to weaker US data
To watch materials, techs and financials, as they may suffer
Bonds
2-yr Trys yield at 1.26%
10-yr Trys yield at 2.24%
10-yr Bund yield at 0.37%
EURUSD
Lots of ECB speakers today, likely to send a united message after sharp EUR jump
Market staying nervous
Selling interest may be seen within 1.1180/1.1200 area
No real resistance until 1.1300 (high), eventually at 1.1250
Support at 1.1073 (76.4% Fibo) and 1.1028 (high)
USDJPY
Cross staying heavy towards 111.50, likely stops above
Interest seems to be at 110.50 (61.8% Fibo) with stops below
US politics and yields in charge
Gold - approaching possible supply zone based on daily chart, watching
…looking to buy USD? USDCHF might be the candidate
Upcoming
ECB’s Weidmann (0700 GMT), Mersch (0750 & 1230 GMT), Lautenschlaeger (1245 GMT), Nowotny (1250 GMT), Draghi (1700 GMT) speaking
Fed’s Mester (1715 GMT) speaking
Fri
ECB’s Constancio speaking
Fed’s Bullard speaking
Iran elections - impact on security and oil production
May 24 – former FBI director James Comey to testify before Senate (1330 GMT)
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 at 65%
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.
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