June 13, 2017 - Market Update

Short recap

Asia up

Europe opening higher

EU not happy with lack of clarity on UK side

Working on moving trading and clearing of EUR denominated assets out of UK

Basics of financial reform in US unveiled

Equities

US techs heavy yesterday but got some bids at the end of session

Is a 4% correction enough?

Material stocks can be back in vogue on copper break…

Hong Kong listed stocks trade at 30% discount to US peers

While offering attractive yields

Risk is China data

GE to review its business activities as the new CEO comes in

Bit of financial world…UK financials keep moving staff out of UK despite softer Brexit talk

LSE expecting profit growth to be driven by indices and clearing

Allied Irish Banks to sell 25% stake to rise EUR 3.3 bln

US banks launching their own payment app to compete with peer-to-peer Venmo

Honeywell to spin off profitable aerospace

Slovakian ESET and US Dragos warn of a malware that can attack critical infrastructure

That was behind last year’s Ukraine power blackout link

Bonds

10-yr Trys yield at 2.21%

10-yr Bund yield at 0.25%

BoJ slowed down bond buying as the rising yields stabilized

As the US Trys yields have fallen

DXY

Nothing new from yesterday…

Should FOMC keeps hawkish wording, USD to benefit

If not, USD sell off to be small and short

Support at 96.44 (61.8% Fibo)

Resistance at 97.85 (50% Fibo), followed by 99.26 (38.2% Fibo)

EURUSD

Seems soft ahead of FOMC

Resistance at 1.1200, 1.1232 (10 DMA), 1.1284, then 1.1300

Support at 1.1180 (23.6% Fibo) and 1.1114 (38.2% Fibo)

USDJPY

US yields lending some support

Lots of offers above 110.00, more above 110.50

Large options with strike 110.00 expiring today

Crucial resistance at 110.50 (61.8% Fibo) and 110.54 (200 DMA)

Support at 109.60 (76.4% Fibo), then at 108.12

Gold

Double top

Resistance at 1275 (10 DMA), 1276 (23.6% Fibo)

Support at 1264 (38.2% Fibo), 1261 (50 DMA), 1255 (50.0% Fibo)

Eventually, 1245 (61.8% Fibo and 100 DMA) depending on how hawkish FOMC wording will be

Upcoming Data/Events

GE: Schaeuble speaking

ECB’s Weidmann speaking

ECB’s Lautenschlager 1000 GMT

Tue/Wed – FOMC meeting

Dovish hike priced in

Market can get surprised if Fed keeps talking hawkish

Forward guidance critical (Yellen holds a press conference)

Economic projections to be released

Thu/Fri – EcoFin meeting to discuss Greece

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

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 7, 2017 - Market Update

Short recap

Asia higher but risk off mood prevails while safe heavens in demand ahead of ECB, UK and Comey

Asia stocks up 2%, more than the rest of the region on consumers, value search and speculation about including China to ETFs

Europe opening mixed

Mnuchin on China – US to increase exports to address imbalance, splitting economic and strategic issues

US to watch FX to stay competitive, China used significant FX reserves

Trump pressing Congress over healthcare reform

Trump pleased by actions of Arab countries but US has the large air base in Qatar, so more relaxed talk will follow

US job openings skyrocketing, skilled workers in shortage

ECB bought a record amount of German bonds at negative yield last month (part of QE)

The step shows the shortage of positive yielding assets

Equities

Bayer exiting from Covestro

After Deutsche Borse-LSE deal went down, exchanges focusing on a low profile acquisitions/projects

Valeant to sell eye-surgery division to Carl Zeiss

Kaspersky taking on Microsoft

Wahed to offer robo-adviser services to Muslim investors

Banks warning on lower profits in Q2, blaming volatility

Bonds

10-yr Trys yield at 2.16%

10-yr Bund yield at 0.26%

China’s recent huge Trys buying likely aimed at keeping the yields low, thus supporting developed markets’ economies

What is in turn beneficial for China not only via internal deleveraging and possibility to attract foreign capital to its bonds

DXY

Support at 96.44 (38.2% Fibo) holding

EURUSD

Yesterday hitting 1.1283 before bids at 1.1284 mitigated the move

Question comes how long EUR can stay that high for?

Market keeps respecting 1.1300 despite lower US yields (bulls are definitely not happy about that)

Probably because of risk of ECB’s hawkish disappointment, very strong switch from EUR shorts to longs and huge China buying of US Trys, thus pushing the yields much lower (should be USD positive sign in longer term but correlation between USD and Trys purchases is weak)

Not expecting large moves today ahead of ECB tomorrow

But may see the cross heading lower on position squaring ahead of risk events

Resistance at 1.1284, then 1.1300

Support at 1.1227 (10 DMA), then 1.1180 (23.6% Fibo)

USDJPY

Quiet, waiting for tomorrow

May see some selling on spikes towards 110.00

Resistance at 109.60 (76.4% Fibo) with stops from 109.20, more below 109.00

Support at 108.12

Expiring options around 110.00 (USD 1.4 bln)

Gold

Gold reaching 2017 highs on low US yields, weak USD and risk off move ahead of events

Question is whether breaking the downtrend line is still a bullish confirmation

Resistance at 1300, then at 1307

Support at 1286 (76.4% Fibo)

Correlation with EURUSD is strong, so the 1300 level is also crucial for EURUSD while testing 1.1300

As gold may help EURUSD higher towards 1.1600 after clearly breaking 1300 line

If the 1300 is really strong enough to resist, we may have a look back at 1.1000 in EURUSD

But stay alert as risk events unfold

Upcoming Data/Events

G20 meeting

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 - Former FBI director James Comey to testify before Senate (1400 GMT)

Unlikely, he would accuse Trump of interfering the investigation but will make him to suffer

Trump likely under investigation but no stopping of Flynn case request from Trump

If Comey doesn’t reveal anything new, markets should take it as a risk on and USD to benefit

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

Not the UK elections count but Brexit talks

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 31, 2017 - Market Update

Short recap

Asia up on better steel industry performance that pushed China factory activity higher

Europe opening mixed

Trump's head of communication is leaving – who knows why?

Wouldn’t be better if Trump has left and all the other staff members stay? The problem is solved then…

USDCNH down as overnight funding rising

EU Commission proposing EMU gov debt securitization (thus packaging debt of different countries together)

After GE refused the idea of Eurobonds

Equities

Vivendi closer to controlling Telecom Italia on EU antitrust approval

Struggling IT banks Banca Popolare di Vicenza and Veneto Banca – one of the options is to close them if no state aid solution is agreed on

LSE buying bond data and index business from Citi (USD 685 mln)

Amazon above USD 1000 watermark to attract more buyers

As analyst expect another 10% push higher on average

Gilead Sciences and GlaxoSmithKline go tough in HIV drugs

Goldman Sachs bought USD 2.8 bln bonds of Petroleos de Venezuela bonds at discount

BlackRock CEO – US financial markets “probably fully priced in” and Q2 earnings could dissappoint

Few words on stocks…

Some argue that stock prices are too high but after considering the slow pace of interest rates rise, they are reasonable for the time being. Of course, staying vigilant is important but some sectors like mining or Japanese equities (trading at 20% discount to US peers) may be of interest. Earnings are solid, still favorable to be investing in stocks based on earnings performance, few unknowns on the horizon like North Korea, Trump, China growth or possible snap elections in Italy as we head to quiet summer period.

So what’s next? Well, the ECB’s possible wording adjustment in June and then Fed’s 3^rd rate hike and taper in H2.

HP to report the slide in earnings amid the push towards more focussed strategy and data center hardware business

Palo Alto Networks to report lower profit despite fast-growing cyber security industry. In case of the company, the competition bites.

Bonds

10-yr Trys yield at 2.22%%

10-yr Bund yield at 0.28%

Brainard dovish on soft inflation (thus pushing Trys yields lower) but expecting rate hike pretty soon

EURUSD

Month end flows likely visible

Closing below 1.1140/55 range the 1.1000 is in sight

As the next likely 1.0840

1.1000 – growing in importance

1.1128 (61.8% Fibo Nov/Jan)

Expiring options around 1.1150 level, towards 1.1200 and large at 1.1250

USDJPY

Resistance at 111.00

Next 50 DMA at 111.21 and 50% Fibo at 111.24

200 DMA at 110.20 – a pretty strong support right above 110.00 level

GBPUSD

Polls changing the game and potentially election outcome for May

As she may not be able to form the government alone what in turn would weaken UK’s negotiation position in Brexit talks

1.2775 is the next to watch, followed by 200/100 DMA at 1.2586/1.2573 levels

Data

EZ: Flash CPI

Core CPI should move back close to 0.8% level (market expectation 1.0%) vs 1.2% prior

CPI expected at 1.5% vs 1.9% prior

Former FBI director James Comey to testify before Senate (tentative)

Beige Book

ECB’s Coeure (0720 GMT), Lautenschlaeger (1230 GMT)

Fed’s Kaplan (1200 GMT), Williams (2330 GMT)

Thu

ECB’s Villeroy

Fed’s Powell

Fri

US NFPs 185k exp vs 211k prior

Unempl. rate 4.4% exp vs 4.4% prior

Average earnings +0.2% exp vs +0.3% prior

Fed’s Harker

EU-China Business summit (Juncker/Li)

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

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

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

June 13/14 – FOMC meeting – hike probability was at 89% after yesterday’s data. If data supportive, we may see one hike in June, then in Sept followed by balance sheet reduction announcement in Dec

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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Feb 27, 2017 - Market Update

Short recap

Asia started on a bad note but recouped the losses

EU markets opened higher

Trump not to cut social welfare programs: Social Security and Medicare

US Treasury Sec Mnuchin – fiscal stimulus impact this year muted (not helping USD and yields)

Busy week with plenty of Fed speakers to be watched for clues on Mar 15 rate hike (priced at 40%)

If there are no really strong comments, especially from Yellen on Friday, we should look at May or June meeting rate hike

Chinese Navy will benefit from rich funding as China to challenge US on the sea

Speculative longs in WTI from HFs reaching new high at 443 mln barrels

Russell 2000 lagging S&P 500 on fiscal stimulus delayed till end of summer or later

Note that small to medium caps will benefit more from fiscal stimulus, thus are much more sensitive to any news

LSE & Deutsche Borse merger unlikely getting approved by EU Commission

Nokia 3310 is back (by the way, I love my BlackBerry Bold…)

Stada is opening the books as a part of acquisition process

Bond yields hitting the lows on risk off and disappointment on Trump

10 yr US Trys yield at support level of the 2.31-2.55% range

GBP not feeling well on a risk of new Scottish referendum

EURUSD still in a range of going nowhere (1.0500-1.0680)

With 1.0500 super strong and battle ground within the range of 1.0500-1.0520 on the downside

Trump’s speech or US PCE inflation can shed some light on further direction

USDJPY – still very sensitive and may react strongly on Trump if we see lots of pro-inflationary talk that will spur the yields rise

Below 1125.50 we have next target 111.60 if Trump doesn’t deliver

Take a not of shrinking Ichimoku cloud on daily chart

Market may be pre-positioning for disappointment

May hit 110 or 115 (chance are widely open)

Vols pretty cheap either direction

Gold – 200 DMA at 1262 ahead of us

May see some profit taking ahead of Trump tomorrow

Fibo levels: 1250 (50%) and 1279 (61.8%)

Data

Mon:

EZ: Business Climate Indicator – to decline slightly

EZ: Consumer confidence – to decline more

US: Durable Goods Orders – to rise

US: Pending home sales – expecting 1% increase

Fed’s Kaplan (1600) – Q&A session

Tue:

2^nd estimate of US GDP expecting at 2.1% vs 1.9% last month

US: Consumer confidence – expecting no change

US: House prices – expecting 5.3%

Fed’s Williams, Bullard speaking

Trump at joint session of Congress (0200-0330 Wed)

Likely to express opinions and plans closer to Congress way of thinking than his ideas from presidential campaign

Wed:

US: Consumer spending – expecting 0.3% increase

US: Personal income – expecting 0.3% higher

ISM Manufacturing – expecting no change

Fed’s Kaplan, Brainard speaking

Beige Book

Thu:

Fed’s Mester speaking

Fri:

US: ISM Non-manufacturing activity index – expecting no change

US: NFPs only next week on Mar 10

Fed’s Yellen, Evans, Lacker, Powell, Fisher speaking

Super Wednesday Mar 15, 2017

Dutch elections

FOMC meeting

US debt ceiling deadline – if no agreement is reached as of Mar 16 the USD 20.1 trillion limit on federal debt is in place

What will stop Trump from his stimulus plans until the deal with Republicans is agreed

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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