July 18, 2017 - Market Update (Trump not able to deliver anything, EURUSD above 1.1500 but below 1.1600 ahead of ECB, 10-yr Trys yield positioning ahead of FOMC, Gold shorts to get squeezed?, UniCredit selling EUR 18 bln of bad loans, ETFs outflow to trigger next downturn, Citi in Frankfurt)

Short recap

Asia in red

Europe opening lower

After 2^nd Obamacare repeal vote failure

Doubts about ability of Trump administration to deliver anything on the rise

Markets getting more comfortable with Fed slowing its hiking pace and all USD negative Trump news

Since US elections S&P 500 is up 13.7% vs Gold being down 7.7%

Equities

Lufthansa rising profit target on higher summer bookings

UniCredit selling EUR 18 bln of bad loans to Fortress and Pimco

Citigroup picking Frankfurt as EU base for trading and sales after Brexit

Rio Tinto lowering iron ore shipment forecast due to weather and infrastructure upgrade

Cutting fees by BlackRock doesn’t help earnings and getting new cash

But watch the flows to ETFs and passive investments as they may trigger next market decline

FedEx warning about cyber attacks impact on earnings

Valeant close to selling Obagi (USD 190 mln)

Earnings

BofA – market is already prepared for lower trading earnings, so the cost cutting plans are a questions

Goldman Sachs – lower trading and investment banking volumes to make a print on results

Johnson & Johnson – Obamacare repeal, sales and benefits of Actelion acquisition (USD 30 bln) to be scrutinized

IBM – markets are more and more negative

Lockheed Martin – expecting better results as governments spend more money on defence, guidance for 2018 may bring more light

Harley-Davidson – not to impress on lower sales in US

Bonds

10-yr Trys yield at 2.30% - drop is likely positioning for upcoming FOMC next week

10-yr Bund yield at 0.58%

EURUSD

Obamacare repeal mess/failure creating strong reaction along with stops at 1.1500 pushing USD lower

But political stuff likely off the table soon as we head to ECB on Thu

Next resistance 1.1580, then 1.1615

Followed by 1.1714, 1.1750

Staying above 1.1600 is way overstretched, 1.1615 should hold ahead of ECB

USDJPY

JPY experienced strong buying across crosses

Bids may be sitting above 112.00

Expiring options around that level too

50/100/200 DMA at 111.84/78/84 very close

Resistance at 112.31 (38.2% Fibo) and 113.14 (23.6% Fibo)

Gold

Above 200 DMA at 1229, 1234 (76.4% Fibo)

If we see another move higher, shorts may get well squeezed

From macro perspective (US data), has a room to go higher

Rising trendline, 1245 (61.8% Fibo) and 50/100 DMAs (1248) acting as resistance

Data/Events

BoE’s Carney (1330 GMT)

Thu

ECB meeting – no change in policy

Dovish wording from may push traders to reassess their stance as EUR had a very nice run

And is hitting few important resistances

Very likely Draghi doesn’t want to repeat his hawkish speech from Sintra sending 10-yr Bund yield above 0.50% from around 0.25% level

Markets pricing a 10 bps hike of deposit rate (-0.4%) over the next year

July 26 – FOMC meeting

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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