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 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

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Apr 4, 2017 - Market Update

Short recap

Asia on a safe side

Europe opening higher

Risk off ongoing (Russia, FR elections (GE-FR spread widens to 67 bps) – USDJPY declined and we see preference for liquidity

EURUSD not picking up as peripheral spreads are widening due to ECB lowering bond purchases

Fed’s Dudley not comfortable with student debt that may have a negative effect on spending and ability to buy houses

S&P 500 support at 2142 (50 DMA) and 2350 level

Hyundai and Kia decreased the production in their China based factories on the back of rising competition from local automakers and tensions between both countries

Imagination Technologies down 70% yesterday as Apple decided to end the cooperation

Danone buying US based WhiteWave Foods that produces organic food

Mylan facing a new class action lawsuit

Canadian SNC-Lavalin interested in UK based WS Atkins (GBP 2.1 bln)

Linde considering to use all means to get the merger with Praxair through

Akzo Nobel still not satisfied with PPGproposal

10-yr Trys yield at 2.33%

10-yr Bunds yield at 0.28%

2-yr Bunds yield back to -0.80%

Gold higher as USD gets a bit weaker, drop in stocks and interest in bonds

Market positioning ahead of Trump-Xi meeting and after Russia bomb attack

Data

EU to make a formal statement on Brexit about what they want to achieve

ECB Draghi speaking

Daniel Tarullo (Tue at 2030 GMT)

EZ: Retail sales expecting to head slightly higher

US: Factory orders to rebound after small dip in March

Wed:

FOMC Minutes

Thu:

ECB Draghi, Weidmann and Praet speaking (especially Draghi’s remarks on inflation will be closely watched)

ECB Minutes

Trump to meet Chinese president

Trump to use trade to wage on North Korea

Fri:

US NFPs

Fed Speakers this week:

Fred Williams, James Bullard

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

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