May 8, 2017 - Market Update

Short recap

Asia higher

Europe opening in red

FR elections – Macron winning over Le Pen (66/34)

The margin of victory was important ahead of Legislative (Parliamentary) elections

Macro some pro-business policies at EU level as well, closer integration, common budget

What may go against Merkel’s vision

But what about cooperation of Macron/Schulz (two EU lovers) as Mitterand/Kohl were?

Fed’s Williams – balance sheet reduction should start in 2017

Considering balance sheet as monetary policy tool

Equities

Linde-Praxair deal getting more difficult

Frankfurt to welcome five largest US investment banks due to Brexit

Bonds

FR-GE spread at 42 bps, some stability

Seen some weakness in IT bonds

Back to old theme of viability of EU project

10-yr Trys yield at 2.37%

10-yr Bund yield at 0.42%

EURUSD

Higher to 1.1024 on Macron but gave up the gains to trade range bound again

Price action was not about Macron victory but the loss of Le Pen (relief)

Strong resistance at 1.1020 (descending trendline on daily chart)

Rising peripheral spreads can bring more doubts about long-term viability of EU project

US-GE yield spread showing EURUSD should be lower

Some buyers sitting at 1.0950, if broken can move to 1.0875

Risk-off capital flows into EU equities may have some impact

Levels: 1.0900, 1.0850, 1.0830 (200 DMA) – here likely to bottom

Gold (daily) – saw some short covering

June rate hike not priced in fully

Resistance at 1255, unlikely to be broken

Data

CA: Housing data would be of high interest on the back if real estate bubble issues in Canada

Fed’s Bullard speaking at 1235 GMT

Fed’s Mester speaking at 1245 GMT

Upcoming

Wed – ECB’s Draghi speaking

Fri – US CPI

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 21, 2017 – French elections – timeline and EURUSD levels

I guess all of us are getting ready for Sunday/Monday night, so let’s have a look at certain times:

1800 GMT – First exit polls

1900 GMT – First projections based on votes counted

2000 GMT – Various estimates for 2^nd round when substantial part of the votes is counted

2100 GMT – Should have more clarity and if not, would need to wait until midnight when most of the votes are counted

Some Exit polls should be available from midday but in Belgium Swiss media only.

EURUSD levels in case of 1^st round results:

Macron-Fillon (Le Pen eliminated) - EUR may enjoy gapping up close to 1.1000 level and then, it is a sell…

…or wait for a rally towards 1.1000 if Sunday opens lower and then sell

Macron-Le Pen – widely expected outcome with some traders seeing EURUSD staying within 1.07/0800 range but we after initial volatility still see a relief rally towards 1.1000 on the back of 2^nd round expectations and then, again selling the rallies. Crucial to any surprise (especially to negative one) will be by what margin Macron will win over Le Pen as the market may get nervous in case of a close-close win.

Le Pen-Melenchon – let’s get ready for swift moves and sell any kind of bounce to target parity, 0.96/9400 and may be 0.9000, followed by a big buy after summer holidays. This scenario is  very unlikely but…we already have Brexit and Trump here.

In case of Le Pen surprising and winning the 1^st round, by what margin she wins will be important. In case of a close win, market will manage but a decisive win 30%+ vote can make many traders very nervous ahead of May 7 vote. Still in case Le Pen becoming a president, the French have a chance to block some of her policies via Legislative (Parliamentary) elections taking place on Jun 11 and Jun 18, 2017.

Next elections to watch are in Germany on Sep 24, 2017.

Followed by Italian elections not later than May 23, 2018 as the current parliamentary term expires on Mar 15, 2018.

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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