June 19, 2017 - Market Update (Macron win a huge potential for France, Fed speakers, US groceries shaking up, extreme long specs in EUR - a fall to come?)

Short recap

Asia up

Europe opening higher

China-Iran to conduct join naval practice in the Gulf

Iran firing over Syria

Trump doesn’t like Cuban salsa

Macron doesn’t need a coalition partner for important economic reforms

France has a huge potential if he delivers

PBOC made a huge CNY 110 bln OMO liquidity injection

Stating the declining liquidity after banks bought gov bonds (official statement)

Japan reported a surprise huge trade deficit on energy imports while exports made a fast jump on cars/steel

Fed’s Kaplan – Fed should be very cautious and patient in rising rates

Lots of speakers this week, let’s see whether others share the same hawkish view as Yellen does (check Data calendar below)

Macron, Schauble and now GE’s Zypries would welcome UK’s U-turn in Brexit

Equities

US groceries shaking on Amazon buying Whole Foods and Aldi entering the market

Is it going to end up for Wall-Mart as for Tesco in UK?

Do you like car makers? Watch for those with more exposure to China

As US auto sales to decline further on expiring leases pushing prices of used cars lower

Petrobras looking as an opportunity as it cuts debt but is still valued below industry average

Fiat-Chrysler exiting Japan?

Airbus upgraded its A380 to boost the sales

Bonds

10-yr Trys yield at 2.16% - still holding close to recent lows but the break of 2.10% would be critical for USD

10-yr Bund yield at 0.28%

COT report as of last Tue (pre-FOMC/ECB):

EUR long specs at 79k vs 74k week before

Highest since 2007

But bear in mind that any extreme is reverted to the mean in some time

Are we going to expect the same long specs reduction as we had witnessed in 2011/2014 ?

EURUSD

Support at 1.1187 (23.6% Fibo) then 1.1120/30

Resistance 1.1284, 1.1295/1.1300

Breaking 1.1100 or 1.1300 would definitely see strong flows and follow through

USDJPY

Likely heavy going to 111.50

Resistance at 111.24 (50.0% Fibo), then 111.32 and 112.16 Ichimoku

100 DMA at 111.85

Support at 110.50 (61.8% Fibo) and 110.71(200 DMA)

Descending trendline around 111.00

DXY

USD consolidation on halt?

To watch the US 10-yr yields breaking 2.10% or not

Need better US data to push real yields higher, so risky assets keep rising and financial conditions tightening

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Support at 97.02 (10 DMA)

Gold

Still under pressure post-FOMC

Support at 100 DMA at 1248, 1245 (61.8% Fibo)

200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Data/Events

No relevant data today but to watch speakers:

Brexit talks starting today at 0900 GMT 

Barnier and Davis speaking at 1630 GMT

ECB’s Lautenschlager (0900 GMT)

Fed’s Dudley (1200 GMT)

ECB’s Nouy (1300 GMT)

ECB’s Weidmann (1500 GMT)

Fed’s Evans (2300 GMT)

Tue

Fed’s Fischer, Rosengren, Kaplan

Wed

Brexit - Queen’s speech 1030 GMT

Thursday

EU Summit

Fed’s Powell

Fri

Fed’s Bullard, Mester, Powell

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

Read More

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

Read More

May 19, 2017 - Market Update

Short recap

Asia mixed on strong US data but political turmoil

Europe opening higher

Risk off only one day

China to normalize relations with South Korea

Brazil – after last year’s impeachment the new president Temer in the same shoes

ECB speakers defended the status quo, no clear path yet

Trump mess may push markets to reprice the risk

Trump visiting Saudi Arabia on Saturday, Aramco to sign business contracts

US job market keeps tightening

NAFTA talks to start in Aug

HF managers refocussing abroad as Trump trade fades

Equities

Bain Capital eyeing Toshiba

Deutsche Bank rebuilding reputation by asking former execs to participate financially at covering the bill they left for misconduct

Danone betting on synergies (WhiteWave) and cost cutting

Alibaba announced USD 6 bln buyback

Bombardier facing a probe on price dumping, action initiated by Boeing

Bonds

10-yr Trys yield at 2.24% (important 2.15% as an indicator of risk)

10-yr Bund yield at 0.35%

Upcoming

ECB’s Praet (0900 GMT), Constancio (1200 GMT) speaking

Fed’s Bullard (1315 GMT), Willaims (1740 GMT) speaking

Iran presidential elections - impact on security and oil production

Raisi an orthodox cleric, promoting isolation

Rouhani globalist who negotiated the nuclear deal

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. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

  

Read More

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

Read More