June 5, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher

Saudi Arabia, Egypt and Bahrain cutting diplomatic ties with Qatar over support of Iran (Islamic Brotherhood and Hamas)

Pushing oil more than 1% higher

All of that coming after Trump’s visit and security threats (banning travellers or notebooks on the planes)

Russia sees oil down to USD 40

UK – attacks and risk of no majority government increasing

It may weight on GBP as UK heads towards weaker government mandate

ECB’s Visco – Italy down most in 10 years

High debt because of low growth but still the average Italian household is wealthier the German one

Fed on track for June hike after weaker Friday’s NFPs but further hikes in question

Unless we see a pick up in inflation and Trump coming with positive fiscal news

Trump to come up with Dodd Frank revamp on Tuesday

But the reality is he doesn’t have enough votes in Congress to push it through

Equities

Investindustrial and Alibaba likely to submit a join bid for The Body Shop from L’Oreal

Blackstone selling Logicor to China Investment Corp (EUR 12.25 bln)

KKR raised USD 9.3 bln in new Asia buyout fund

Exxon misleadig about climate change impact of its business

Pfizer to hike prices of some drugs in US by 20%

Goldman Sachs eying to trade Saudis stocks

Home Capital to face regulators on June 26

Bonds

10-yr Trys yield at 2.17%% (2.16% critical level, on Friday closed below 200 DMA)

10-yr Bund yield at 0.27%

EURUSD

Resistance at 1.1284, 1.1300 (big level), 1.1355/65and 1.14/15/1600 range

Should see lots of hesitation ahead of 1.1300

Support at 1.1213 (10 DMA), 1.1200 and 1.1179 (23.6% Fibo)

New trading range 1.1000-1.1500 ?

Morgan Stanley switching from end year 0.97 level for EURUSD to 1.1800

On strong data, political stability, valuations and equity market inflows

A very nice switch…

USDJPY

US yields taking the cross lower

Support at 200 DMA at 110.34, 110.10 (Ichimoku) and 109.60 (76.4% Fibo)

Bids sitting ahead of 110.00, with stops below

Resistance at 110.50 (61.8% Fibo), heavy level

New trading range 108.00-112.00 ?

GBPJPY - With GBP under pressure and strong JPY double whammy  possible here... looking for lower levels

AUDJPY - Are bears controlling the market?

Weekly Commodity: Oil and Sugar under pressure, Grains in a vacuum Link 

Upcoming Data/Events

June 8 – ECB meeting – Draghi being alone but inflation data from US and JP suggesting ECB to carry on with ultra-loose stimulus

ECB likely to adjust the risk to economy wording but no change to asset purchases

June 8 – UK elections including Scotland, if SNP/Sturgeon wins the independence referendum likely to follow

June 8 - Former FBI director James Comey to testify before Senate

June 11/18 – French Legislative (Parliamentary) elections (a big question mark for Macron to gain majority)

June 13/14 – FOMC meeting – Jun hike probability at 95%, Sep at 28% and Dec at 40%. After Friday’s NFPs Sep hike may be skipped if data doesn’t come strong.

June 15/16 – EcoFin meeting to discuss Greece

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 9, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher but correcting

Kuroda sees 2% inflation in 2018

To keep the short term rate target at -0.1%

And 10-yr Japan bond yield at 0%

UK’s employers having hard times to recruit foreign workers

Fed’s Bullard having concern over weaker growth and inflation data in Q1

Alex Weber from UBS (former Bundesbank head):

Brexit negative for Europe, more volatility to come

ECB likely to remove some easing wording in June

And announce taper in Sep

Equities

Akzo Nobel rejected the PPG Industries take over bid again

UK’s energy supplier Centrica not very happy with warm weather and low commodity prices

As they bite into the margins

Home Capital suspended dividend, burnt 1.6 bln out of 2.0 bln of line of credit as deposit flee away

Industry veterans added to the Board

Suncor looking at new oil sands project in Alberta (Canada)

ISS pushing shareholders of PrivateBancorp to reject takeover offer from CIBC

Earnings

Commerzbank reported higher operating income, proof that raising rates benefit banks

Walt Disney expecting better results

Valeant investors more focussed on asset sales than earnings

Others reporting: Allergan, Duke Energy, Nvidia, Electronic Arts, SunPower,

VIX touching the 9.77 level, lowest level since 1993

Market sees very little risk in the near future

Will not last long, what is going to be the trigger?

Bonds

10-yr Trys yield at 2.39% with real yields at 2 month high of 0.51%

10-yr Bund yield at 0.42% - ECB’s June language adjustment and beginning of taper in Sep getting priced in

Yield likely to move to 0.50% attacking the recent highs

FR-GE spread stuck at 42 bps (after Macron victory), stabilized here

What is still above 20-30 bps historic levels but market is waiting for June Parliamentary elections

EURCHF, USDCHF – weaker CHF on higher yields

And money flows leaving safe heavens

To watch SNB sight deposits stats – to stabilize or fall?

USDJPY – on the way to 115.00 after clearing Ichimoku

Next resistance 113.76 (76.4% Fibo)

Risk on, US yields and tax reform progress crucial

Commodities

Oil very indecisive as OPEC/non-OPEC cut may extend to 2018

But slowing demand and rapidly rising production in US temper the cut impact

Gold playing within 1200/50 range

USD and US yields not helping

Options market back to neutral

Specs long cut, real money no change

Data

US: Small Business Optimism Index to slow a bit

US: JOLTS to slow a bit

Fed's Kashkari (1300 GMT), George (1540 GMT), Rosengren (1700 GMT) and Kaplan (2015 GMT) speaking

G7 finance ministers meeting in Italy this week

Discussing: trade, financial institutions, fighting inequality and tax crime

Upcoming

Wed – ECB’s Draghi and Fed’s Rosengren, Kashkari speaking

Thu – Fed's Dudley speaking

Fri – US CPI and Fed's Evans speaking

May 25 – OPEC/Non-OPEC meeting

June 8 – UK elections

June 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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May 3, 2017 - Market Update

Short recap

Asia mostly in green with some hesitation about Fed looking at June hike

Europe opening lower

Trump a bit “disruptive” in international field

Open to government shutdown, pushing for faster voting on bills

US pushing China to agree on additional North Korea sanctions

Brexit – GE-FR agreed on tougher stance towards UK’s post-Brexit obligations (EUR 100 bln) Full article

UK announced that they will not pay this amount, want to discuss in details what are the rights and obligations

I love this one too…what discussions, all is written on the paper and signed by them

Equities

Akzo Nobel meeting today to discuss offer PPG Industries (USD 29 bln)

Peugeot to test self-driving cars in Singapore in a partnership with nuTonomy

US auto sales losing the steam, the cycle likely comes to an end

Valeant should be able to repay USD 5 bln by Feb 2018

Apollo, Blackstone, Centerbridge interested in Brookfield Asset Management (CA)

Fairfax Financial looking to buy Home Capital

Active fund managers are underweighted Apple versus indices despite high level of share price

VIX at 10.59 level – time to buy put options?

Earnings season

Apple’s iPhone sales/revenue down (customers waiting for a new device), feeling the replacement cycle

Facebook – expecting higher revenue on mobile-ads, market to focus on hiring and planned investments

AIG – markets is awaiting a CEO succession plan

Tesla – investors are very curious about the company results as the company deliveries in Q1 jumped by 69% to record 25k

Home Capital Group (CA) – closely watched as there are few bids in the wake of financial difficulties following mortgage fraud accusation in the bubbling Canadian housing market

Others reporting: Prudential Financial, MetLife, Yum Brands, Kraft Heinz Foods, Time Warners

Bonds

ECB bought much more FR (EUR 11.3 bln and IT (EUR 9.8 bln) bonds last month, while GE bonds purchases were in line

Amount that is in breach of the usual allocation key

ECB did so ahead of FR elections and due to issues IT is coping with

10-yr Trys yield at 2.29% - trading a bit stronger ahead of FOMC

10-yr Bund yield at 0.32%

10-yr Greek yield declined substantially to 6.16%

Gold – waiting for a catalyst: FOMC, US NFPs

Support 1249 (50% Fibo) and 1250 (50/200 DMA)

Data

EZ: Q1 GDP flash estimate – no change to 0.5%

US: ADP Employment report – expecting lower growth in April

US: ISM Non-Manufacturing – expected slightly higher

Obamacare vote expected today/tomorrow

FOMC statement to be released (no press conference)

Likely to discuss balance sheet (USD 4.5 tln, pace of rate hikes, no policy change expected)

Just to refresh:

March PCE came at 1.6% as expected

Market pricing June hike at 70%

Upcoming

Friday – US NFPs

Focus on earnings while headline may not be stellar due to Easter holiday

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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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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