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

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June 12, 2017 - Market Update

Short recap

Asia lower taking clues from Nasdaq and its heavy weights

Europe opening lower

FR parliamentary elections – Macron’s party winning a huge majority in Lower House

What will make the reform package likely to happen

Traditional parties dying , Le Pen heavily down

China opening to foreign investors more, to cut restrictions on FDI

While reports of falsified provincial economic data

Fitch, Moody’s, S&P – no changes in UK rating but keep negative outlook

GBP waiting for clues

All points to softer Brexit as May’s coalition partner doesn’t want to have a border controls and customs union with Ireland

UK employers not really prepared for possible immigration changes

Equities

Apple – new iPhone may be lagging the download speed against its rivals

Elliott Advisors increasing the share in Akzo Nobel to 5%, becoming the largest shareholder

SoftBank entering the field of robotics by buying the business from Alphabet

EU to investigate Qualcomm-NXP (USD 38 bln)

NASDAQ sold off, driven by Apple (iPhone upgrade issue) and NVIDIA (casino stock label)

Investors may be caught by surprise as the volatility in techs is extremely low

Bonds

10-yr Trys yield at 2.22%

10-yr Bund yield at 0.25%

DXY

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

Resistance at 1.1200, 1.1231 (10 DMA), 1.1284, then 1.1300

Support at 1.1180 (23.6% Fibo)

Lots of options expiring today within the range of 1.11-1.1200

So the trading should be contained here as we wait for FOMC

COT report – speculative longs in EUR increased by 1k to 74k, largest long positioning since 2007

USDJPY

Yields to lead the game ahead/after FOMC

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

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

Gold

Double top

Resistance at 1276 (23.6% Fibo)

Support at 1264 (38.2% Fibo), 1255 (50.0% Fibo)

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

COT report - saw long liquidation ahead of FOMC

Upcoming Data/Events

Tue – US Attorney General to testify before Congress over Comey and meeting with Russians

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 2, 2017 - Market Update

Short recap

Asia up on risk on, Nikkei 225 attacking 2015 highs

Europe opening in green

Risk on can continue but need good NFPs

The last nail to the US international supremacy (seen as the Fall of the Roman empire sort of) is Trump pulling out of Paris Climate Accord  link

Trade sanctions on US polluters may follow

On the other hand I like this one from FR president "Make Our Planet Great Again"

Oil on defensive on Trump pulling out of Paris accord and still rising US production

As US drillers likely to increase production/supply

Fed’s Powell – US economy healthy, on track to make 3 hikes this year in total

Equities

Trump pulling out of Paris accord could cost US jobs, innovation and production in green industries

And cause the lagging in development against the world

Linde-Praxair merging (USD 73 bln) and creating a global leader in the field

Audi facing emission scandal

Baidu to entering the field of self-driving cars with Bosch and Continental

Google to be fined by EU

Deere buying Wirtgen Group (USD 4.9 bln) t diversify business

Bonds

10-yr Trys yield at 2.22%% - in case of bad surprise in NFPs, the 2.16% critical

10-yr Bund yield at 0.30%

BoJ reached the same size balance sheet as Fed (USD 4.5 trln)

Thus tripled it since 2013

DXY

Strong ADP had no effect on USD or yields

As there is an erratic correlation between ADPs and NFPs

And US inflation is a question mark for many

EURUSD

Tight range around 55 HMA (1.1217) that is steadily moving higher

Resistance at 1.1267, 1.1300 and 1.1500

Support at 1.1200 and 1.1166 (23.6% Fibo)

USDJPY

Seems to be getting ahead of US yields

Bad surprise in NFPs having much bigger impact

Resistance at 111.80 (Ichimoku), 112.00 (38.2% Fibo) and descending trendline

Support at 111.24 (50.0% Fibo), 110.50 (61.8% Fibo) and 200 DMA at 110.30

Gold

Resistance at 1286 (76.4% Fibo) and descending trendline

Market not ready to break it as may see strong profit taking funds substantially increased exposure (COT May 23)

Support at 1255 (61.8% Fibo)

Oil – very interesting piece on the future of oil  link

Oil companies now tilting toward renewable energy, such as Norway’s Statoil ASA, are best placed to survive peak demand, said Deutsche Bank AG. Exxon Mobil Corp.—due to its size and “reluctance to change”—is the most vulnerable.

State-run giants of the type that dominate the Organization of Petroleum Exporting Countries are even more at risk and could one day be left with billions of barrels of unwanted crude.

Data

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

Market expecting strong jobs growth after stellar ADP

Earnings on moderate side but market focusing on

ECB’s Nowotny (1200 GMT)

Fed’s Harker (1645 GMT)

Fed’s Kaplan (1700 GMT)

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

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 – 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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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 24, 2017 - Market Update

Short recap

Europe higher

Markets need to digest the move and get ready for ECB and Trump policies (tax, Obamacare)

FR elections 2^nd round – Macron/Le Pen

Prediction Macron winning over Le Pen 60/40 (seems to be sufficient margin not to have a nasty surprise)

Will see whether French are also as serious about rejecting nationalism and far-right ideas as Dutch were

Would be a strong signal to the world in the light of Trump/Brexit like efforts

US tax reform details to be revealed this week

Obamacare on the table on Wed again

South Korea joining a military drill lead by US

Fitch downgraded Italy to BBB (one grade), outlook stable

European stocks to benefit, capital flow to come back

Positive on Value stocks and banks

British Telecom taking accounting scandal in Italy seriously

Credit Suisse looking at capital increase

Not only banks and financial companies relocating out of London

But also EU’s pharma regulatory office too

Valeant ready to launch psoriasis treatment, likely in 2^nd half of 2017

Canadian oil sands still facing tough times on low prices of oil

As the capital intensive extraction is not attractive

Earnings season

This week will be busy, so let’s warm up a bit with:

Teck Resources – should benefit from rising coal prices and expected rebound in demand for steel

T-Mobile US, Halliburton, Whirlpool, Kimberly-Clark reporting among others

Bonds

FR elections relief reflected in higher yields

But majority of the move already priced in

GE-FR spread below 50 but still not down to normal levels

As market sees risks of Macron gaining majority in Parliamentary elections to support his policies

US yields – what will be the reaction if Trump delivers?

Are EU yields going to move up as well?

10-yr Trys yield at 2.32%

10-yr Bund yield at 0.33% (jumped from 0.20% level)

EURUSD

Short term – relief

Long term – situation in Italy, rising spreads

FR – Parliamentary elections (majority for Macron – a big question)

Support - 1.0840/50 – strong area with (200 DMA at 1.0836)

Resistance - 1.0933 (61.8% Fibo) on daily chart

Some sell levels coming around 1.1000

EURUSD weekly

Would like to bring to your attention that EURUSD didn’t get through the resistance (High 1999 at 1.0915) decisively

USDJPY – support 109.86 (23.6% Fibo)

Resistance 110.94 (38.2% Fibo)

DXY – below 99.26 (61.8% Fibo)

But supported by declining trendline

200 DMA at 99.00

Commodities

Gold – staying neutral under longs liquidation

Support 1272 (descending trendline)

200 DMA at 1252

Data

Kashkari (Fed) speaking at 1530 GMT

Upcoming:

Apr 27 – ECB meeting – Draghi will be in the spotlight defending the QE continuation with taper may be around mid-2018

Will need to talk down the taper at an earlier stage

Would correspond to three year cycle as Fed had

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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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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Mar 21, 2017 - Market Update

Short recap

Asia printing highs

EU markets opening higher

Macron the winner of French presidential debate but Hillary Clinton was too

Weidmann (ECB) current policy is appropriate

Evans (Fed) will make decision about next hike in June

Will know more about financial and fiscal conditions and data

A small reaction to his speech only

UK to trigger Art 50 on Mar 29

FBI investigating links between Trump’s campaign and Russia

China to open further its economy to foreign capital (services, manufacturing, mining…etc.)

To support foreign securities listings and investments in science, technology and infrastructure

All of that seems like the opposite to Trump world

BNP Paribas ready to fill the gap in investment banking field in Europe

As it sees opportunities after its rivals scaled back activities there and in a hunt for an increase in revenue

Porsche family interested in Porsche shares owned by Piech family

Nike reporting today, struggling with increasing competition from Under Armour and Adidas

Eli Lilly having positive results from a combination of drugs treating breast cancer

Opel cleared in France in diesel emission investigation

S&P 500 still in uptrend

Support at 2365 then 2354

DAX still in uptrend channel

Support rising trendline, 11 930 and 11 480/500 levels

Oil not much upside potential

Likely to settle in lower range

Gold neutral

Levels: 1220-1238 then 1261 and Fibo levels

10-yr Trys yield at 2.48%

Saw additional strength in Trys as June hike priced lower at 40%

Risk of Trys yields to decline to lower range of 2.30%-2.50/60% band

Data

UK: Consumer Price Index expected to rise above 2%

UK: CBI Industrial Trends Survey ready for a slight decline

US: Current account expecting deficit to widen

JP: BoJ Minutes

Speakers (GMT)

BoE Carney (1035)

Fed: Dudley (1035), George (1600), Mester (2200), Rosenberg

Central banks’ future action:

Fed toward 3%

BoE not before late 2018

ECB and BoJ no action

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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