May 12, 2017 - Market Update

Short recap

Asia slightly higher

Europe opening mixed

BoJ is passionate about 2% inflation in 2018

Trade barriers a dead end – comments from Fed’s Dudley

Fed officially commenting on Trump policies

US financial conditions keep easing, thus giving a green light to Fed for June rate hike

Fed just proved that it is very closely watching politics

As they moved their Nov meeting by one day from Tue/Wed to Wed/Thu (Nov 7/8)

Due to mid-term elections on Tue Nov 6

PBOC injected medium term liquidity to support the economy

While keeps tight grip on short term lending to curb speculations

UK politicians still not telling all to British public

May is getting ready for a hard Brexit

Equities

Uber is a transport service and not an app

What is a huge challenge with legal/licensing consequences for Uber in EU market

Rosneft having hard time to acquire Essar Oil (USD 12.9 bln) as company's creditors have the say

Vivendi to merge with Havas

Barclays’ investment bank arm looking to hire up to 100 new bankers as a part of reorganization

Wells Fargo very active in cost cutting but outlook stays not that convincing

Goldman Sachs launching a new dark pool for trading stocks

The private trading venue will be run by Nasdaq

Macy’s and Kohl’s weak earnings proving that the sector is struggling big times with online competition

Bonds

10-yr Trys yield at 2.38%

10-yr Bund yield at 0.43%

DXY – a bit mixed yesterday

But well above 200 DMA (99.17)

Support also at 99.26 (61.8% Fibo)

Rising trendline acting as a resistance now

Next is 101.00 (76.4% Fibo)

EURUSD

As yesterday the 1.0850 is pivotal

Followed by the 1.0825/30 area (21 & 200 DMA) – if broken, likely to see more downside

1^st round FR election gap is the next to watch

USDJPY

Next 115.00/50 and 118.60 highs may be in focus

Support at 113.76 (76.4% Fibo), 113.00 (100 DMA) and 113.09 (10 DMA)

Gold

Resistance at 1228 (100 DMA), 1230 (50% Fibo) and 1255 (61.8% Fibo)

Support at 1204 (38.2% Fibo)

Upcoming

US: CPI

Core CPI m/m 0.2% exp vs -0.1% prior

Core CPI y/y 2.0% exp vs 2.0% prior

CPI m/m 0.2% exp vs -0.3% prior

CPI y/y 2.3% exp vs 2.4% prior

US : Retail sales

US : University of Michigan Index

Fed's Evans speaking 1300 GMT

Fed’s Harker speaking 1630 GMT

G7 Fin Mins & Central bankers meeting

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 90%

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 19, 2017 - Market Update

Short recap

Asia lower

Europe opened mixed

GBP up yesterday as market speculates that snap elections can remove the political uncertainty

And give a stronger mandate for May in Brexit talks

Pence – NK to expect an overwhelming and effective response

China shadow banking back at full speed

China eased capital flow controls

Foreign investment in Canada hitting high of CAD 39 bln on M&A

Geopolitical events and upcoming French election driving investors to safe heavens (gold, bonds)

FTSE 100 below recent lows on stronger GBP

BMW see China sales to grow 10% in 2017 while globally should rise 5-5.5%

Credit Suisse still in a clash with its shareholders over top execs bonuses

Earnings season

Goldman Sachs disappointed on trading revenue what impacted markets yesterday

Lower trading activity was to blame as the bank doesn’t benefit from lending as competitors do or additional trading related business.

Is Goldman Sachs loosing a market share?

Morgan Stanley – expecting positive surprise on more active bond trading and cost cutting

American Express – expecting a negative surprise due to competition margin squeeze and rising costs

BlackRock – more than profit report markets will scrutinize cost cutting and reorganization plans

Especially at active stock picking division

Others: Qualcomm, CSX, Abbott Laboratories, eBay, U.S. Bancorp

Bonds

10-yr Bund yield at 0.16%

10-yr Trys yield at 2.18%

Touched 2.1629% - the lowest since Nov 2016 elections

The area of support is around 2.1346% (38.2% Fibo)

The levels around/below 2.20% may be a good place to start to sell bonds

But the appetite for safety stays strong for now

Don’t forget about Fed hiking and trimming bond portfolio

George (Fed) supporting bond taper this year

June hiking priced at 43%

EURUSD daily – getting crowded

GBPUSD daily – no risks of Brexit negotiations removed

More to go? Will the 1.2800 hold? How long?

The move occurred on very thin liquidity

After surprise announcement

Data

EZ: CPI – no surprise expected, should stay in line

Beige Book (Fed)

Hansson (ECB) speaking (0800 GMT)

Coeure (ECB) speaking (1200 GMT)

Praet (ECB) speaking (1430 GMT)

Rosengren (Fed) speaking (1630 GMT)

Upcoming:

Apr 23 – French presidential elections

40% still undecided

Official results at 1800 GMT

Exit polls from midday but on BE and CH media only

More precise estimates around 1600 GMT

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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Apr 18, 2017 - Market Update

Short recap

Asia lower

Europe opening higher, UK lower but heading lower now

Markets getting ready for French elections this Sunday and developments around North Korea

Need some risk events to go away to focus on fundamentals and earnings season again

Trump congratulated Erdogan in a call

Appreciated Turkey’s support in Syria attack

Mnuchin smoothed out Trump’s comments against strong USD in a short term

Strong currency in a long term reflecting strength and confidence in the economy

But may hurt exports short term

Admitted that health care bill stop delaying tax reform discussions

US fully supporting Japan’s security

Japan appreciates all options against North Korea on the table

Chinese real estate prices keep rising

Despite cooling measures

Fed’s Fisher glad about muted market reaction to potential taper

Stocks

Genentech (Roche Holding) received approval from FDA on bladder cancer drug

Volkswagen positive on China sales grow this year

Wal-Mart looking to enter the online fashion world by Bonobos acquisition

To face competition from Amazon.com

Berkshire and Juwai.com working together to help Chinese to buy properties in US

Boeing keeps laying off employees

M&A in US telecom industry coming as the ban will be lifter in the coming days

Earnings season

Mostly US names reporting but Europe should bring more positive surprises

Need very strong earnings to push equity markets higher

Goldman Sachs – expecting a positive surprise supported by investment banking and bond trading. Markets also waiting for insides about the use of data and technology to be more efficient and profitable.

Bank of America – expecting positive results based on increased trading and rate hikes

UnitedHealth Group – should benefit from clients leaving Obamacare but lots of uncertainty after Trump lost the healthcare vote

IBM – not to surprise the market on a positive note as the company is still turning around

Johnson & Johnson – investors are curious how the company is coping with Obamacare repeal defeat, ongoing Actelion acquisition (USD 30 bln) and future plans

Yahoo – let’s check the last earnings report before getting acquired by Verizon

Bonds

GE-FR spread at 72 bps

Markets waiting for French elections results

Hedging started to go through the market last week

10-yr Trys yield at 2.25%

10-yr Bund yield at 0.19%

EURUSD – support 1.0566 (23.6% Fibo)

Resistance 1.0706 (38.2% Fibo)

Buyers sitting in 1.0550-1.0600 area

USDJPY – Mnuchin setting support line for the cross

Strong support at 108.82 (200 DMA) holding

DXY – support at 100

Resistance 101 (76.4% Fibo/100 DMA)

Gold – looking at 1295/1300 resistance; 1315 (Fibo 76.4%)

Likely to correct first to 1263/1270; 1278 (Fibo 61.8%)

Reacting to retracing of JPY and bond yields

Oil – recent rally was supported by strong short-covering with few new longs

Data

Fed’s George to speak

Upcoming:

Apr 23 – French presidential elections - still 40% of voters undecided

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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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

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 7, 2017 - Market Update

Short recap

Asia lower, safe heaven flows to bonds as US strikes can rise the confrontation risk with Russia and Iran

Russia calling for UN Security Council meeting, US informed RU about strikes in advance

Don’t want to sound cynic but it was a very good move from Trump’s team and Trump will definitely benefit

In other words diverting the attention from economic agenda to something else (for the time being)

China has no comments so far

Trump-Xi socialized a bit yesterday, no working talks yet

Geopolitical events difficult to trade but they usually mean revert as the market finds another theme

Sitting on crucial levels:

USDJPY at 110.00

US Trys yield close to 2.30% support

Gold above 200 DMA at 1256 and above recent high

S&P 500 to decide soon which to go

Oil was 2% up

10-yr Trys yield at 2.32% - after falling as low as 2.29% quickly recovered

10-yr Bunds yield at 0.25% - Draghi confirmed there is no need to change monetary policy

AUD down on risk off and fall in iron ore

EURUSD to test support at 1.0623 (100 DMA)

JP econ adviser saying JPY not at extremely strong levels

EURCZK cap removed

FX foreign reserves come close to USD 115 bln with a huge jump in 2017

No surprise that CNB acted that quickly right after official hint from last week

Overall it was an expected move, no huge reaction, handled it way much better then SNB

Looking at a steady move lower but still a short covering can take place as some speculators were betting on a sudden move

EURCZK at higher levels would mean a better entry point for CNB foreign reserves offloading

Stocks very muted reaction to Syria strikes

Defence stocks likely to benefit today

Step by step move over to high quality and low volatility stocks may be warranted

Unilever on the way to prove its shareholders both financially and via restructuring that it can run biz on its own

Adidas putting the 3D technology to real life to produce more customized products

Linde-Praxair merger – Linde board having headaches

Twitter co-founder sold some minority shares

JPMorgan, GS and RBC enjoying increase in M&A activity in Canada

Data

US NFPs

Headline 180k exp vs 235k prior

Unemployment rate 4.7% exp vs 4.7% prior

Average earnings +0.2% exp vs +0.2% prior

Few comments apart from official numbers above:

A bit mixed views as employment was strong in ISM Manufacturing

While dropped substantially in ISM Non-manufacturing

ADP strong at 263k

Jobless claims steady

Our expectations are closer to 200-220k

Market putting more emphasis on the dynamic of hourly earnings grow because of inflation pressures

That in turn may benefit USD

With this respect would need to see earnings growth at a higher pace than +0.2% m/m or +2.8% y/y

Weather may play a role

Unlikely that a bad surprise would effect Fed rate hikes

Wouldn’t be surprised if stock markets finally take a note of hiking…

Trump meeting Chinese president (2^nd day)

NATO foreign ministers meeting (2^nd day)

Fed’s Dudley speaking

Short week next week ahead of Easter holidays

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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Mar 22, 2017 - Market Update

Short recap

Europe opening lower

Asia down as markets doubt about the Trump’s ability to bring real pro-growth policies in life. In other words the after Trump victory reflation trade is loosing momentum. Nikkei testing the important psychological level 19 000.

The US markets suffered heavy selloff that was also accelerated by negative comments from US administration about the ban of nuclear weapons.

Abe supported open markets policy in Brussels yesterday

EU-JP working hard on a trade pact

US regulators pushing for a risk reduction via making the securities settlement time shorter (2 instead of 3 days)

Trump putting pressure on lawmakers to vote for Obamacare repeal bill as it is a first major hurdle to implementing his agenda. Bear in mind that there is Senate and two Houses of Congress to get it through.

Brexit – 27 remaining members to meet on Apr 29 (note Art 50 to be triggered on Mar 29)

London based banks not to face lengthy set up process while moving to EZ

Goldman Sachs to start moving staff to EZ soon

UK banks to face investigation in relation to Russia money laundering activities

US banks hardly hit during US session (down 3%) as markets losing faith in Trump pro-growth policies, thus reflation trade

We may get ready for a 5-10% correction

S&P 500 below 2350 support

After closing the investigation of Opel (GM) in emission scandal yesterday, the French authorities continue with Fiat-Chrysler

Apple is out with newer version of iPad, priced at USD 329 (lowest in Apple world)

New opportunities for global investment banks open in Canada as the appetite for M&A from Canadian companies and pension funds is rising

Oil still feeling the oversupply

Russia open to support the OPEC/Non-OPEC deal

Gold – finding ideal support from risk off (lower stocks, USD, yields and mounting political risks in US)

EURUSD – important 1.0800/50 if broken we aim for 1.1000 and higher

But if the rally in EURUSD is based on political risk off how sustainable is it?

At the moment the Le Pen defeat is not a done deal yet, just recall the Hillary Clinton winning the debates but the winner was…

USD – suffering against EUR, JPY and GBP, while stronger against EM currencies (reflation trade fading away)

USDJPY – 111.60 important, driven by yields

10-yr Trys yield at 2.43% (mid band of 2.30%-2.60% range)

10-yr Bunds yield at 0.43% (flat)

ECB is “testing” the market reaction to possible taper announcement at Dec 2017 meeting with a 10 bps rate hike

EURCZK – at the beginning of this week we saw a significant increase in activity on the bid side across all forward maturities. At the same time the flow was also much higher than usual, what may continue as a part of risk off, reflation and EM flows, not to mention, of course, the likelihood of CNB to remove the EURCZK 27.000 floor this year.

Data

US: Existing Home Sales – expecting a small decline

Villeroy (ECB) to speak (0830 GMT)

Lautenschlager (ECB) to speak (1130 GMT)

Thursday: US House voting on Obamacare repeal

Super important event in terms of whether Trump can/is able to deliver

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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